Building The Future
10 December 2008 As CropLife America prepares to celebrate its 75th year in service to the US crop protection industry, agriculture in the country is having its own celebration of sorts. Worldwide demand for grain and governmental mandates on biofuel production has the American crop production machine operating at top speed.
CropLife America President Jay Vroom says that while he hasn’t seen what he considers a reliable total number on U.S. crop protection product sales in 2007, most companies enjoyed healthy increases over 2006. “We saw substantial expansion in the uses of some products for the first time,” says Vroom. “For example, fungicide treatments on corn expanded tremendously.”
And the outlook for this year looks to be at least as bright, despite some anticipated shifting of acreage away from corn. “At this point we can’t predict with certainty what the planted acres will be, but it appears corn will dip below last year’s record high of more than 90 million acres (36.5 million hectares),” Vroom says. High crop prices will lure farmers into wheat and soybeans, including double-crop soybeans where possible.
Whatever is ultimately put to soil, farmers in the US are dealing with higher input costs across the board that threaten to somewhat offset the gains in crop prices. “Growers will be making a lot of careful planning decisions – they must be smart with their overall management planning, and input decisions in particular.”
Post-Patent Growth
Undeniably, generic crop protection product use has grown substantially over the past decade, but in the US, most growers are still looking for performance and service, says Vroom. The service-based business models have generally continue to show the greatest sustainable success, says Vroom.
“Looking at the US crop protection market, it is more instructive to examine the layers of companies that are selling the products rather than simply at whether or not the product is post-patent,” says Vroom. “Some research-based companies are on the generic side, so there is really a proprietary generic business. There is a layer of purely proprietary generic companies. And there is a layer of generic products registered by companies that are principally distributors and formulators that now have their own private label products, in part sourced by offshore generic suppliers. Finally, some products are coming virtually to the farm gate from some offshore generic suppliers through phone brokers.”
It’s a mixed bag, but Vroom says that looking at market totals, there continues to be a lot of interest in proprietary, value-added and “created by” companies that are “committed to a branded approach to the market and adding value. Certainly, it’s a different sort of ‘proprietary’ now than 1970s and 1980s but the market is brand-focused and science-based, and that makes it a very exciting time for US crop protection,” Vroom explains.
On IP, Counterfeit Products
CropLife America is continuing its vigilance on the issues of counterfeit products and intellectual property (IP) protection in the US market. Although not a major problem in the country at this point, counterfeit product infiltration into other significant markets provides some important lessons and illuminates the benefits of global, coordinated efforts.
“CropLife International has a full-time staff position dedicated to the issue of managing counterfeit challenges to the ethical industry worldwide,” says Vroom. “It is a substantial problem in Latin America, Asia and parts of Europe. It’s an issue we monitor closely in the US, and we know there have been some incidents of counterfeit goods that require us to pay closer attention now.
“There is a certain amount of comfort in the US,” he continued, “knowing that there is a value to relationships among growers, dealers, distributors, and manufacturers” that provide an implicit assurance of product integrity.
In addition, CropLife America is working closely with the US Environmental Protection Agency to help it identify and understand the places problems could arise where products might not meet the specified design for purity and efficacy. “EPA has been attentive, and understands that if we are not vigilant that we will have similar problems in our pesticide marketplace,” says Vroom.
On IP, Vroom says that working to create more homogenous standards around the world continues to be a priority for CropLife America. “We have a well-established and well-understood IP system in the US,” he explains, “and we continue to encourage the US government to work bilaterally with other nations and via multi-lateral groups like WTO and WIPO to ensure greater regulatory harmonization, patent enforcement and data protection.”
The US data protection provision — 10 years exclusive use and five years compensable data – as allowed under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) — is well known as functional and fair for patent holders and predictable for generic competitors, says Vroom. “We have worked with the Bush administration to include this standard for IP in a wide range of bilateral trade agreements,” he notes.
IP protection is even more critical given the continued market reduction despite this most recent bump up in industry value. “There are fewer companies doing basic research in discovery, so it is critically important that IP and counterfeit goods protection is given high priority everywhere if companies are expected to continue basic research,” Vroom asserts. “IP protection is even more important, given the U.S. pesticide dollar volume between 1999 and 2006, notwithstanding market rebounds the last two years.”
Finally, CropLife America has always stood firm in the defense of sound science-based risk assessments as the foundation of the regulation of pesticides. “In the 1990s the US passed the most sweeping changes to pesticide law in the nation’s history with the Food Quality Protection Act,” Vroom recalls. “The regulatory implementation of the law at times was overly influenced by political pressure — but eventually a return to science-basis was restored via our advocacy efforts. Today we are engaged in much the same debate over pesticides regulation and the intersection of Endangered Species and Clean Water Laws.”
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