Far-REACHing Effects
11 December 2008 While the EU’s Registration, Evaluation, and Authorization of Chemicals (REACH) program has had its share of detractors from within the crop protection industry, there are reasons for us to embrace it. Granted, a number of sticking points exist, such as the cloudiness of the regulatory process, the short timelines for review once enacted (which could be early- to mid-2007), the murky stance on intellectual property rights that may result in mandatory data sharing, the costs being heaped upon chemical companies, and the threat posed to small companies that lack the resources to meet these costs.
But the spirit of the program and its core mission are steps forward for safe use, environmental friendliness, human health, and in some ways, the chemical industry — by forcing safer alternatives to be used in place of certain older chemistries, REACH may attain its goal of incentivizing innovation and cleaning questionable older chemistries off the market. While this can be seen as a threat to smaller businesses, there are gains to be had from an industry perspective, as older, commoditized chemicals give way to higher value products with better margins. Of course, there will be costs, and as I’ve often been reminded, the huge headache of becoming compliant with the new regulatory structure. This encompasses not just active ingredients, but any chemical product which is manufactured or imported to the EU at a volume of 1 metric ton or more.
However, this leads to the one potential of outcome of REACH that is troubling. The framers of REACH have stated — no doubt to garner consumer and Member State support — that the chemical industry will foot the bill for all the needed assessments. This ignores the real eventual outcome: that these costs likely will be felt further downstream.
It doesn’t take a great deal of imagination to see these costs being passed to the consumer. If a safer yet more expensive chemical ingredient starts appearing in commercial products, the added cost will certainly appear on the price tag of that product. Even if no alternative chemicals are ultimately used in a product or its manufacturing process, the money spent to prove the chemicals’ safety is most likely to be recouped at the consumer level.
For the majority of products, this doesn’t pose a problem. Consumers may pay a little more, but the benefits outweigh the expense.
But as our industry has learned from the skyrocketing cost of discovery and recent re-registration efforts in different countries, there can be unintended side-effects of a program like REACH.
Farmers of specialty crops and users of minor-use products could be the first losers once REACH is enacted. The reason is simple economics: if the cost of administration, compilation of data, registration, and ongoing maintenance of registration is higher than the profit derived from the product, manufacturers are better off withdrawing the product from the market than defending it. This means fewer products in the market and fewer options for small growers.
The second, broader threat posed by REACH is that it could slow product discovery even further than its current pace. If additional costs are going to find their way into a product’s development and deployment, and those products are going to be priced at reasonable levels, only the largest markets are likely to be targeted with the most potentially lucrative products. This could stop a lot of good products from reaching the grower.
If such a scenario plays out, REACH could ironically act as a deterrent of the very improvements it was designed to incentivize…
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