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Speaker tells CAPCA annual conference: Recall chance for ag regulatory change

The Oct. 7 ascension of the Terminator Arnold Schwarz-enegger to the governorship of the sixth largest economy in the world represents a golden opportunity to untangle California's regulatory morass and make the state's No. 1 industry, agriculture, more competitive in the world market, according to Elin Miller.

Miller, vice president for global pest management for Dow AgroSciences, told the annual California Association of Pest Control Advisers (CAPCA) conference in Reno, Nev., the heralding for change in the recall of Gov. Gray Davis should encourage policy makers to take a “fresh look” at California's onerous, complicated regulatory process that is sacrificing California agriculture's competitiveness.

She repeatedly called for unity within California highly diversified agriculture that has not always been on the same page. She said new unity would provide leadership in reshaping the state's regulatory infrastructure that “makes sense for California's competitiveness in the future.”

Miller is well-versed in California politics and regulatory bureaucracy. She is the former executive director of Western Agricultural Chemical Association (WACA) and former deputy director of the California Department of Pesticide Regulation.

‘Wake up call’

“Oct. 7 was a wake up call inside and outside of government in California. And the timing could not be more urgent in terms of the future,” she said.

It was a challenging future she painted for agriculture and her industry, agricultural pesticides.

Part of her responsibilities is the Asia Pacific market. And that is where China and its huge labor pool in a country of one billion people poses a huge threat to some of the same export markets California relies upon to buy its agricultural products.

Japan is one of the U.S. and California's largest markets and it continues to grow, but China exports into that country are increasing dramatically more than California, particularly in fresh fruits and vegetables.

Miller said the challenge facing the agchem industry is stagnant growth. It has seen its annual growth rate go down from 15 percent in the 1970s to a slower, but respectable 7 percent in the ‘80s to a minus .2 percent in the ‘90s. Over this decade, it will improve only marginally to basically flat or growing at a 1.3 percent annual rate with input traits of biotechnology.

Even with a flat growth rate, she said companies like Dow AgroSciences must continue research and development of new active ingredients to replace those now on the market.

California is a big market for agricultural chemicals; $269 million annually. That is not particularly significant in a total $28 billion, however, California ranks in the top 10 globally as a “country” after Canada and Argentina, said Miller.

Costs climb

Costs continue to rise for bringing new active ingredients to market; $187 million vs. $35 million to $50 million of just a few years ago. It still takes eight to 10 years from discovery to market. Generic competition is also cutting into the income of the basic manufacturers like Dow AgroSciences, said Miller.

Generics are good economically for the farmer, but there is no research and development behind generics. By 2010, Miller said 20 percent of the country's active ingredients will be off patent.

Compounding the no-growth future is increasing regulatory costs, not only on a state or federal levels, but on local levels.

“As a PCA, grower, retailer of manufacturer, it is pretty tough to keep up with who is on first and be assured you are in compliance” with all laws and regulations, she said.

If there is to be development of new products, companies must be assured of data protection. In the rapidly expanding countries of China and Japan, governments are moving aggressively to protect data to assure their agricultural industries get new technology.

“The state of California seems to be moving in the opposite direction and if this continues, it will be a huge deterrent for individual companies” to continue developing new products for a state where specialty crops need new technology.

Data protection

“Specialty labels for this state are not special — they are not the mainstay” of California's agricultural economy. Companies will not risk investments on those markets unless they can be assured that their data is protected by the state. Dow is involved in legal action now over data protection in California.

The challenges over the next decade will not get any easier for California or the agchem industry.

“Can California compete in the future? Yes, if we all pull on the same rope in the same direction.” Miller predicted. “It will not be easy and there are choices that are going to have to be made” for the sake of agricultural unity and political power.

She called unity in California agriculture “radical,” but Oct. 7 was a radical day for California and a “clear mandate for change” and a most opportune time for all of agriculture to focus on what is best for the entire industry.

e-mail: [email protected]

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