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REVIEW THE METHYL BROMIDE CRITICAL USE EXEMPTION PROCESS

UNDER THE MONTREAL PROTOCOL

HEARING

BEFORE THE

SUBCOMMITTEE ON CONSERVATION, CREDIT,

RURAL DEVELOPMENT, AND RESEARCH

OF THE

COMMITTEE ON AGRICULTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

MARCH 10, 2005

Serial No. 109–3

(

Printed for the use of the Committee on Agriculture

agriculture.house.gov

COMMITTEE ON AGRICULTURE

BOB GOODLATTE, Virginia, Chairman

JOHN A. BOEHNER, Ohio,

Vice Chairman

RICHARD W. POMBO, California

TERRY EVERETT, Alabama

FRANK D. LUCAS, Oklahoma

JERRY MORAN, Kansas

WILLIAM L. JENKINS, Tennessee

GIL GUTKNECHT, Minnesota

ROBIN HAYES, North Carolina

TIMOTHY V. JOHNSON, Illinois

TOM OSBORNE, Nebraska

MIKE PENCE, Indiana

SAM GRAVES, Missouri

JO BONNER, Alabama

MIKE ROGERS, Alabama

STEVE KING, Iowa

MARILYN N. MUSGRAVE, Colorado

DEVIN NUNES, California

RANDY NEUGEBAUER, Texas

CHARLES W. BOUSTANY, JR., Louisiana

JOHN J.H. ‘‘JOE’’ SCHWARZ, Michigan

JOHN R. ‘‘RANDY’’ KUHL, JR., New York

VIRGINIA FOXX, North Carolina

K. MICHAEL CONAWAY, Texas

JEFF FORTENBERRY, Nebraska

COLLIN C. PETERSON, Minnesota,

Ranking Minority Member

TIM HOLDEN, Pennsylvania

MIKE MCINTYRE, North Carolina

BOB ETHERIDGE, North Carolina

JOE BACA, California

ED CASE, Hawaii

DENNIS A. CARDOZA, California

DAVID SCOTT, Georgia

JIM MARSHALL, Georgia

STEPHANIE HERSETH, South Dakota

G.K. BUTTERFIELD, North Carolina

HENRY CUELLAR, Texas

CHARLIE MELANCON, Louisiana

JIM COSTA, California

JOHN T. SALAZAR, Colorado

JOHN BARROW, Georgia

EARL POMEROY, North Dakota

LEONARD L. BOSWELL, Iowa

RICK LARSEN, Washington

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

PROFESSIONAL STAFF

WILLIAM E. O’CONNER, JR., Staff Director

KEVIN J. KRAMP, Chief Counsel

ROBERT L. LAREW, Minority Staff Director

SUBCOMMITTEE ON CONSERVATION, CREDIT, RURAL DEVELOPMENT, AND RESEARCH

FRANK D. LUCAS, Oklahoma, Chairman

JERRY MORAN, Kansas

TOM OSBORNE, Nebraska,

Vice Chairman

SAM GRAVES, Missouri

MIKE ROGERS, Alabama

STEVE KING, Iowa

CHARLES W. BOUSTANY, JR., Louisiana

JOHN J.H. ‘‘JOE’’ SCHWARZ, Michigan

JEFF FORTENBERRY, Nebraska

TIM HOLDEN, Pennsylvania,

Ranking Minority Member

HENRY CUELLAR, Texas

MIKE MCINTYRE, North Carolina

BOB ETHERIDGE, North Carolina

ED CASE, Hawaii

LINCOLN DAVIS, Tennessee

STEPHANIE HERSETH, South Dakota

G.K. BUTTERFIELD, North Carolina

RYAN E. WESTON, Subcommittee Staff Director

(II)

(III)

C O N T E N T S

Page

Holden, Hon. Tim, a Representative in Congress from the Commonwealth

of Pennsylvania, opening statement ................................................................... 3

Lucas, Hon. Frank, a Representative in Congress from the State of Oklahoma, opening statement .................................................................................... 1

Peterson, Hon. Collin C., a Representative in Congress from the State of

Minnesota, prepared statement .......................................................................... 4

WITNESSES

Bair, James A., vice president, North American Millers’ Association ................. 18

Prepared statement .......................................................................................... 40

Botts, Daniel A, director, environmental and pest management division, Florida Fruit and Vegetable Association ................................................................... 20

Prepared statement .......................................................................................... 45

Carey, William A., school of forestry and wildlife science, Auburn University .. 26

Prepared statement .......................................................................................... 87

Castellano, Michelle, vice president, Mellano and Company ............................... 23

Prepared statement .......................................................................................... 51

Freeman, Rebeckah, director, congressional and regulatory relations, American Farm Bureau Federation ............................................................................. 16

Prepared statement .......................................................................................... 85

McMurray, Claudia, Deputy Assistant Secretary, Bureau of Oceans and International Environment and Scientific Affairs, U.S. Department of State ........ 4

Prepared statement .......................................................................................... 36

Answer to submitted question ......................................................................... 40

Wasson, Rodger, California Strawberry Commission ........................................... 24

Prepared statement .......................................................................................... 42

SUBMITTED MATERIAL

Doniger, David, Natural Resources Defense Council ............................................ 74

Dow Agrosciences LLC ............................................................................................ 62

Stirpe, David, executive director, the Alliance for Responsible Policy ................ 72

(1)

REVIEW THE METHYL BROMIDE CRITICAL

USE EXEMPTION PROCESS UNDER THE

MONTREAL PROTOCOL

THURSDAY, MARCH 10, 2005

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON CONSERVATION, CREDIT,

RURAL DEVELOPMENT, AND RESEARCH,

COMMITTEE ON AGRICULTURE,

Washington, DC.

The subcommittee met, pursuant to call, at 10:15 a.m., in room

1300 of the Longworth House Office Building, Hon. Frank D. Lucas

(chairman of the subcommittee) presiding.

Members present: Representatives Moran, King, Schwarz, Goodlatte [ex officio], Holden, Cuellar, Etheridge, Butterfield, Costa, and

Peterson [ex officio].

Staff present: John Goldberg, Elizabeth Parker, Ryan Weston,

Claire Folbre, Tyler Wegmeyer, Callista Gingrich, clerk; Rob

Larew, and Anne Simmons.

OPENING STATEMENT OF HON. FRANK D. LUCAS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA

Mr. LUCAS. This hearing of the Subcommittee on Conservation,

Credit, Rural Development, and Research to review the methyl bromide critical use exemption process under the Montreal Protocol is

called to order.

Good morning to all of you, and I appreciate your patience. We

had a unexpected journal roll call vote to attend, and more Members will be joining us shortly.

I would like to welcome everyone to this hearing to review the

process under which critical use exemptions for methyl bromide

with the Montreal Protocol are granted. As a part of this review,

it is my hope that we will be able to differentiate how this process

was designed to function when it was originally agreed upon, versus what is has become.

We are all aware that the Montreal Protocol was originally conceived, was designed to phase out the production and consumption

of methyl bromide by developed nations. However, in recognition

that there might be some uses after phase out, which there are not

technical or economically feasible alternatives available. The parties agreed to a revision in 1997, enabling the exemptions for those

uses of methyl bromide that can be regarded as critical.

2

In establishing the critical use exemption process, the parties to

the convention agreed upon specific criteria that would be used to

determine what uses would qualify as critical. As stated in decision

IX/6 of the protocol, a use of methyl bromide should qualify as critical only if the nominating party determines that one, the specific

use is critical because the lack of availability of methyl bromide for

that use would result in a significant market disruption, and two,

there are no technical or economically feasible alternatives or substitutes available to the user that are acceptable from the standpoint of environment and health, and are suitable to the crops and

circumstances of the nomination. This decision is important because subsequent to this modification, the U.S. Congress enacted in

1998 to amend the Clean Air Act to conform, I should say, our domestic policy regarding methyl bromide to these new requirements

and procedures articulated in the protocol.

I include this brief history to underscore the fact that by linking

U.S. domestic regulation to the Montreal Protocol, the U.S. Congress has demonstrated the degree of trust that the international

process would be credible and fair. Based on the reports that we

have heard from recent meetings in Nairobi and Prague, it would

seem that the process has, thus far, been neither credible or perhaps, not fair. Unfortunately, our friends in Europe, for some reason one can only speculate on, seem to want to stack the deck

against us. Even more problematic, in a recent decision by the

State Department and the Environmental Protection Agency’s Office of Air and Radiation to deny American agriculture of its critical

needs and forward to the Secretariat of the Montreal Protocol a

critical use nomination for 2007 that falls well below our actual

needs. And this is extremely troubling to me. And for starters, I am

told during the review process conducted by the EPA Office of Pesticide Programs, where the necessary expertise resides, our constituents were led to believe that the 2007 nomination would be

similar to the ultimate nomination in 2006. The reported difference

between the expert review and the final decision needs to be discussed.

This brings me to my greater concern. That being that the critical use exemption nomination process is not a domestic regulatory

action, but instead, the responsibility of our Government to advocate the true critical needs of its citizens. This process was embraced by Congress to fulfill this objective, and anything less than

this from the Administration is completely unacceptable.

Now, I am disappointed that the head of the EPA’s Office of Air

and Radiation, Mr. Jeff Holmstead, who was responsible for EPA’s

part in this decision was unable to attend, and instead, sent Assistant Administrator Hazen from the Pesticide Program to defend the

decision. That is no slight to Ms. Hazen, who is an excellent witness. But it is sometimes difficult to speak for others’ decisions.

We all recognize the importance of methyl bromide. We also recognize that our continuing public investment in research to identify

safe, effective, and economical alternatives has not been overwhelmingly successful. The absence of these alternatives makes the

use of methyl bromide, as defined by the protocol, critical.

I recognize that this Nation has responsibility to live up to its

international obligations. That said, this Congress also has a reVerDate 11-SEP-98 13:51 Apr 27, 2005 Jkt 020658 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\DOCS\109-3 HAGRI PsN: HAGRI
3

sponsibility to ensure that compliance with Montreal Protocol does

not so disadvantage our farmers as to threaten the safety and security of our food, plant, and forest resources.

With this in mind, I look forward to our discussion here today,

and hope that our witnesses will be able to shed some new light

that provides us with an optimistic outlook for the resolution of

this issue. And finally, I would note that Dow AgroSciences and the

Natural Resources Defense Council have submitted testimony for

the record.

With that, I turn to the ranking member, the gentleman from

Pennsylvania, Mr. Holden, for any comments he might care to

offer.

OPENING STATEMENT OF HON. TIM HOLDEN, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

Mr. HOLDEN. Thank you, Mr. Chairman, for holding this hearing

this morning. I am hopeful it will help us shed some light on the

methyl bromide critical use exemption process under the Montreal

Protocol.

We know that methyl bromide use contributes to damage of the

ozone layer. The ozone layer protects both humans and ecosystems

from sunlight, and its depletion may lead to a rising incidence of

health problems. In recognition of the importance of protecting the

ozone layer, over 160 countries joined together and signed the Montreal Protocol. This treaty controls global production and trade of

ozone-depleting substances, such as methyl bromide. However, according to USDA’s economic research service, the complete phase

out of methyl bromide could cause substantial losses to U.S. producers and consumers of crops treated with methyl bromide, until

more effective alternatives are developed and made available. Estimates for a net annual loss are in the range of $400 to $450 million.

While there are some approved alternatives to methyl bromide in

use, and more are being researched, there are still some critical

uses for which there is no good substitute. In my district in Pennsylvania, these uses include fumigating soil in strawberry fields,

and keeping flour mills sanitary. For that reason, the Montreal

Protocol allows us to apply for critical use exemptions. But some

countries that object the critical use exemptions for methyl bromide

do not have large agriculture or food processing industries. Other

countries compete with the U.S. in the food and fiber arena. Accordingly, our agriculture producers are skeptical of impartial

treatment under the Montreal Protocol. U.S. critical use exemption

applications are ultimately determined by a handful of individuals

without accountability to U.S. citizens, without transparency, and

without an appeal process.

I hope this hearing will help clear up concerns about the amount

of U.S. requests submitted to the international approval panel, as

well as the amount of U.S. critical use exemptions approved by the

panel, and I look forward to hearing from our witnesses, Mr. Chairman.

Mr. LUCAS. And I thank the ranking member for his insights.

4

As Members come to this hearing, I would request that they submit their opening statements for the record so that the witnesses

may begin their testimony, and ensure that we have ample time for

questions.

[The prepared statement of Mr. Peterson follows:]

PREPARED STATEMENT OF HON. COLLIN C. PETERSON, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF MINNESOTA

Thank you Chairman Lucas and Ranking Member Holden for scheduling today’s

hearing. I appreciate the oversight you are doing on the operation of the critical use

exemption for methyl bromide that was negotiated under the Montreal Protocol

Treaty.

I look forward to the testimony provided by the witnesses today as well as the

written testimony that will be received by the subcommittee.

I am concerned, as are many of my colleagues, that our domestic industries which

must continue to rely on the use of methyl bromide have that ability. The critical

use exemption that was provided for in the Montreal Protocol shows a recognition

that there remain instances where methyl bromide is the only economically or technically feasible option for industries such as flour milling and commodities which

need to kill pests prior to planting.

I hope that agencies represented at the hearing today will continue to carry out

their sometimes dual roles of ensuring that our producers and domestic industries

have the tools they need to remain viable, while also being a fair and trustworthy

regulator.

Mr. LUCAS. I would like to turn to the first panel at the table.

Ms. Claudia McMurray, Assistant Secretary for the Environment, Bureau of Oceans and International Environmental and Scientific Affairs, Department of State, accompanied by Mr. Burleson

Smith, Director of Pest Management Policy, U.S. Department of

Agriculture, and Ms. Susan Hazen, Acting Assistant Administrator,

Office of Prevention Pesticide and Toxic Substances, the Environmental Protection Agency.

Ms. McMurray, whenever you are ready, please begin.

STATEMENT OF CLAUDIA MCMURRAY, DEPUTY ASSISTANT

SECRETARY, ENVIRONMENT, BUREAU OF OCEANS AND

INTERNATIONAL ENVIRONMENTAL AND SCIENTIFIC AFFAIRS, U.S. DEPARTMENT OF STATE

Ms. MCMURRAY. Thank you, Mr. Chairman, members of the subcommittee. Thank you for this opportunity to deliver this statement

on behalf of the Department of State, the Department of Agriculture, and the Environmental Protection Agency. I have a longer

statement that I would like to submit for the record, with your permission.

Mr. LUCAS. So noted and ordered.

Ms. MCMURRAY. Thank you.

Mr. Chairman, we realize that methyl bromide and its phase-out

under the Clean Air Act and the Montreal Protocol are issues of

great importance to the members of this subcommittee, as well as

your constituents. Those of us representing the United States at

meetings of the parties of the Montreal Protocol are always mindful

of this fact. As a consequence, our guiding principle is to balance

the legitimate needs of farmers with our desire to restore and protect the ozone layer.

We know a number of things about methyl bromide. First, it is

a widely used chemical that is highly effective in killing pests that

5

threaten agricultural crops in the United States, and indeed, all

over the world.

Second, partly because the U.S. is the world’s largest agricultural

producer, the United States has also been the world’s largest producer and consumer of this substance.

Third, methyl bromide has been in wide use in the United States

and around the world for decades, and users find that efficient use

of it works effectively.

Fourth, while there are alternatives available today for use in

many situations, there is no alternative that can operate as effectively as methyl bromide in all the crop situations in which methyl

bromide is currently used.

You will be hearing from those who use this chemical later in

this hearing. They will tell you that they have made, and are continuing to make, progress in reducing the use of methyl bromide

in fulfillment of our obligations under the Montreal Protocol by

using newly improved substitutes and implementing innovative

new technologies and practices.

The parties to the Montreal Protocol recognize that widespread

use and the lack of feasible alternatives to methyl bromide have

made its phase out more difficult than other chemicals controlled

in the past. Accordingly, the parties created exemptions for methyl

bromide, including the so-called critical use exemption, which you

referred to, Mr. Chairman, in your opening statement.

The so-called essential use exemption under the Montreal Protocol is a similar one that we have used for chlorofluorocarbons and

it has worked quite successfully. We obviously have more work to

do to smooth out the implementation of the critical use exemption.

The protocol’s criteria allow a party to seek an exemption from

the phase out if it determines that the absence of methyl bromide

would cause a significant market disruption. Other parties must

agree that the nominating party has demonstrated that there are

no technically and economically viable alternatives for the use in

the context of the application, and that the applicant party continues to make efforts to limit emissions and find alternatives for the

use.

Now that I have laid this general groundwork, I would like to

turn to the U.S.’s 2007 critical use exemption nomination, which as

you indicated, Mr. Chairman, amounts to 29 percent of our 1991

baseline level.

This nomination, like our previous nominations, was developed

through a rigorous technical process involving the careful efforts of

many technical experts. EPA’s Office of Pesticide Programs, with

collaboration from the Department of Agriculture, worked intensively with growers to understand fully the genuine critical needs

in various States and agricultural sectors. This collaboration allowed expert scientific and economic staff to develop technically

supported estimates for U.S. critical needs for methyl bromide in

2007, which were then shared with policymakers through an interagency process involving the State Department, the Department of

Agriculture, the Environmental Protection Agency, the U.S. Trade

Representative, and the Council on Environmental Quality.

Each year, the technical estimate has been lower than the previous year, because parts of some sectors switched to alternatives

6

and some sectors drop out altogether if they do not need the exemption. Over the years, we also obtain better information that allows us to more accurately estimate the true need for methyl bromide.

The value of this careful and collaborative process has been demonstrated in our consistent success thus far with the parties, who

have approved substantially all of each annual CUE request submitted by the U.S. so far. Specifically, parties to the protocol approved more than 90 percent of our request for 2005, amounting to

slightly over 37 percent of baseline consumption. With respect to

2006, the parties have approved the U.S. request to produce and

import a total of 27 percent of the 1991 baseline consumption of

methyl bromide, or about 6,900 metric tons. This represents about

73 percent of our request. In addition, the parties granted interim

approval for the balance of the 2006 request, which represents just

about 10 percent of the baseline amount. Final decisions on the

bulk of this increment will be made at an extraordinary meeting

of the parties to be held on July 1, 2005, in Montreal, with conjunction with the protocol’s annual working preparatory meeting.

We understand that some Members of Congress have expressed

frustration with the work of the methyl bromide technical options

committee, or MBTOC, in recommending critical use exemptions. It

has become clear to us, certainly over the last couple of years, that

the critical use exemption process, which involves literally hundreds of individual crops and users in 17 countries, represents an

unusually difficult challenge for this technical committee. With

strong support from the United States and other countries, the parties took steps last November in Prague to address this challenge

by adopting a decision provide clear guidance to the MBTOC in

their review of critical use nominations.

The U.S. welcomes these improvements and believes these new

guidelines will ensure that MBTOC reviews fully the relevant technical and economic criteria contained in the Montreal Protocol decisions, and transparently describes the basis for their judgments.

The revised guidelines also allow for more extensive and direct

communication between the MBTOC and the nominating party,

and will provide additional time after MBTOC makes a recommendation for a party to appeal the decision.

The United States also supports the so-called multi-year approach, which would provide benefits in terms of time savings for

the MBTOC and the Montreal Protocol parties in reviewing CUE

nominations, as well as for the parties that have to develop them.

Such an approach would provide greater predictability for the user

community. Again, in November 2004, despite serious international

skepticism, the parties agreed to continue considering a possible

structure for a multi-year critical use exemptions. We in the U.S.

remain hopeful that parties will be able to submit multiple year

critical use exemptions in the near future.

Mr. Chairman, I hope that my testimony convinces you and the

other members of the subcommittee that this administration has

taken and will continue to take action concerning methyl bromide

in a manner that not only protects public health, but also ensures

the critical needs of our farmers are met.

7

The agreements reached on methyl bromide at the recent meetings of the parties are strong evidence of the continued vitality of

the Montreal Protocol and the ability of parties to adapt to changing scientific and technical information. Although we still have

more work to do, I believe that we have fostered a greater understanding and appreciation of the technical basis for the U.S. critical

use exemption request.

The U.S. position at the 16th meeting of the parties demonstrated the strong continued support for the Montreal Protocol,

as well as our firm commitment to phase out methyl bromide, once

technically and economically feasible alternatives are available for

our agriculture sector.

I thank you for this opportunity to testify before this committee

on behalf of the Department of State, Department of Agriculture,

and the Environmental Protection Agency. My colleagues and I

would be pleased to answer any questions you may have.

Thank you, Mr. Chairman.

[The prepared statement of Ms. McMurray appears at the conclusion of the hearing.]

Mr. LUCAS. And thank you, Secretary.

In the recent meeting in Prague, 27 percent of our total critical

use exemption request of 37 percent was approved. The remaining

10 percent will be subject to further negotiation at the extraordinary meeting of the parties scheduled for July 2005. In advance

of this meeting, the United States has requested 29 percent of our

2007 nomination. Could you expand for me for a moment on the

role that the State Department had in coordinating this U.S. request in to the Montreal Protocol? How all that came about?

Ms. MCMURRAY. Yes, I would be happy to. As I tried to explain

in my testimony, we have a very time-intensive resource-intensive

process that goes into preparing the submission that we make to

the parties, to the Montreal Protocol now each year since the 2005

critical use exemption was submitted, and it literally doesn’t stop

from year to year.

I think I would like to ask Suzy Hazen, if you would permit, Mr.

Chairman, to describe the technical process in preparing our numbers. But before I do that, what I will say is that the numbers come

in from the growers, and they are analyzed in great detail. And you

will hear about that. And then there is another review that goes

on within the Government, first at EPA because they are the technical experts. And then it goes to a larger interagency group that

is led, not just by the State Department, but also by the Council

on Environmental Quality. And that is when we, as a policy matter, make a determination based on the technical information we

have, as to what submission we will make to the Montreal Protocol

parties.

Mr. LUCAS. One more question and then we will turn to Ms.

Hazen for her explanation.

How will the 2007 nomination impact your strategy to win the

additional 10 percent approval for this July meeting in Montreal?

Ms. MCMURRAY. Mr. Chairman, my view is that each year is

independent. Obviously, we are in a slightly odd situation this year

because we didn’t have all of our 2006 critical use exemption acted

on in November, which would be the normal course of business for

8

the parties. However, having said that, I think we can make a

strong case for the bulk of what is still left to be determined of the

2006 nomination. And my hope would certainly be that the parties

would look at that in isolation. We can make that technical case

and that no other numbers, other than those 2006 numbers, are

relevant.

I think you will see that the change from 2006 to 2007 that you

are focused on has to do with the integration of alternatives into

our strategy. In other words, EPA is starting to see the ability of

certain growers to make better use of the alternatives that have

now come onto the market.

So we are going to aggressively pursue the balance of our 2006

request and we think, aside from perhaps a percentage point which

we think new information has indicated may not be viable any

longer, that the bulk of that 10 percent we can make a very strong

case for.

Thank you.

Mr. LUCAS. Ms. Hazen.

Ms. HAZEN. Mr. Chairman, thank you for the opportunity to explain our process and hopefully provide some answers to the questions which this subcommittee has.

What I would like to do is walk through the process that is used

to come up with the U.S. proposal.

In 2006, users requested approximately 60 percent of the 1991

baseline, or approximately 50 million tons. In 2007, the users requested 15 million tons, or 59 percent of the baseline. These requests come into the Federal Government, they come into EPA. We

work with USDA and others, and they go through a very rigorous

technical review process that has been reviewed and approved

through an interagency collaboration.

The process itself has been refined over the years as we have developed better and more precise information sources. Specifically—

and this may help to answer some of the questions—included in

this technical review process, for each sector we consider things

like key pests, yield and quality loss when alternatives are used,

cost impacts of alternatives, and transition time. So if you think of

the data coming in the door to EPA and others, the first thing we

do is make initial adjustments to the amounts that are requested.

So for example, we go through to assure that there is no double

counting. You can, for example, have a large company come in and

ask on their own independently for a request, and then an association also requesting. And there is usually double counting there. So

we look at that. We look at growth. We look at use rate adjustments. And one of the larger areas where we are seeing—I won’t

call it double counting, but in quarantine and pre-shipments, there

is a separate pot, if you will, that can be drawn from that does not

have to come in through the critical use exemption. So the first

thing we do is look at those four things.

To put that in perspective, for the 2007 request, approximately

17 percent of the modifications or adjustments that were made initially were based on those four criteria. I am not trying to single

out any particular industry, but for the strawberry nursery group,

approximately 90 percent of the adjustment that was made, was

9

made because 90 percent of the requests qualified for QPS, or quarantine pre-shipment.

After these basic adjustments have been made, a number of additional factors are considered. We look at key pest distribution, substitutes, regulatory impacts, for example, is methyl bromide not allowed to be used somewhere, are there caps, those kinds of things,

unsuitable terrain, a whole series of other issues which we look at.

In going through the 2007 requests, this resulted in adjustments

to the modified requests after the initial adjustments of approximately 47 percent.

The process that we are using I think has resulted in better,

more accurate information. The user community is providing us

with much better information. We are working with that group,

with those groups to help them better refine the distinctions between the sources of methyl bromide, and we think that we have

come to a place where more refinements are probably necessary,

but we think we are getting to a good place.

So that is an explanation of how the process works to come up

with a final number, Mr. Chairman.

Mr. LUCAS. Thank you, Ms. Hazen.

My time is now expired and I now turn to the ranking member,

Mr. Holden, for his questions.

Mr. HOLDEN. Thank you, Mr. Chairman.

Ms. McMurray, you shared a concern that will be expressed by

the industry folks that the European Union is simply asking that

the U.S. requests be cut, even if the U.S. applications may be able

to justify the use at the levels requested?

Ms. MCMURRAY. Congressman, I think we have had a significant

challenge. This is, as I indicated before, a new process for everyone.

It is complicated. The situation is different in the United States

than it is in many European countries, as far as climate, soil, geography, you name it. We have had a challenge in communicating

that to a lot of the other parties, but the Europeans, I think, have

probably been the ones that we have had our most significant differences with. I do think, though, that now that we have made the

technical case 2 years in a row to the advisors to the parties, that

they are starting to see that this is not something that we are submitting lightly, that this is a credible application that is backed up

by numbers, that is backed up by circumstances, and that we are

seriously moving in the direction of integrating alternatives into

the process, but that that will take a little bit longer than everyone

would like.

I think your question goes to——

Mr. HOLDEN. Their motive, yes.

Ms. MCMURRAY. Well, your question seems to go to whether they

have some arbitrary number in their mind that they want us to get

to, and if I were to answer that directly, I would say yes. It is zero.

We all want to get to zero. But now that we have gone through this

process, I think we have convinced them that it has to take a little

bit longer than what they envision.

Mr. HOLDEN. Thank you.

Mr. Smith, in my opening statement I mentioned applications in

my district for methyl bromide for strawberry fields and in flour

mills for sanitary reasons. Has research showed any alternatives so

10

we can get to a lower number? Because what I am hearing from

our folks is that we are not there with an alternative to methyl

bromide in these two applications.

Mr. SMITH. Representative Holden, thank you for the question.

Yes, the U.S. Department of Agriculture has conducted research

on alternatives for a number of different crops that are covered

under the critical use exemption process. With respect to each individual case, such as strawberries that might exist in your district,

I can’t speak to those specifics. However, there are labeled alternatives for many uses. One of the issues, however, is that they

have to meet both a biological and a regulatory requirement, and

if that is not registered in a specific State, then that alternative

may not be available to growers.

With respect to the question on post-harvest, in flour mills, for

instance, there are products that have been registered recently that

cover many of the pests that are found. But if they do not cover

all of the pests that exist in a facility, then there may be questions

as to whether or not an alternative will be fully a replacement for

methyl bromide.

Mr. HOLDEN. Thank you. And I believe this question probably is

for you, Mr. Smith, as well, or maybe Ms. Hazen.

Did the Golf Course Superintendents Association of American

submit an application for 2007 under the critical use exemption

process? Or Secretary?

Ms. HAZEN. Perhaps Mr. Smith and I can share this question.

My understanding is that the Golf Course Superintendents did

not submit a critical use exemption request.

Mr. HOLDEN. They did not? That is contrary information.

Ms. HAZEN. They submitted one, but withdrew it. I am sorry.

Mr. HOLDEN. Were they asked to withdraw it?

Mr. SMITH. Allow me to answer that question, sir.

Mr. HOLDEN. Yes.

Mr. SMITH. They were not asked to withdraw it; however, I did

contact the Golf Course Superintendents Association, and during

my discussions with them, made it very clear that I was not providing legal advice, as I am not an attorney. However, there were concerns conveyed to them over whether or not their nomination met

some of the criteria of the critical use exemption process. And for

that reason and because of the timeliness associated with submitting the nomination, I explained that there would be options for

them to withdraw the nomination without prejudice. But that was

something that they should contact EPA for clarification of the specifics of the nomination and what criteria might exist with regard

to whether or not to submit—or maintain the nomination or not.

Mr. HOLDEN. Well, wouldn’t that be contrary to their interest to

withdraw it? I assume that Mexico and the Caribbean countries

would be allowed—because they are developing would be allowed

to use methyl bromide, and therefore, they would be at an advantage.

So they were not pressured to withdraw their application even

though they realized that developing countries would be able to use

methyl bromide and it might not in their best interest?

Mr. SMITH. One of the issues that was discussed, sir, was the fact

that unlike commodities that can be traded across borders, that the

11

use on golf courses would be considered to be different than those

uses, or it could be, at least.

Mr. HOLDEN. Sort of like a luxury, as opposed to other crops? My

question is if it is a luxury in the United States, isn’t it a luxury

in Mexico or in the Caribbean?

Ms. MCMURRAY. I think I will take a stab at this as well.

First of all, in reference to your question about withdrawing the

application that they made, I think what had been asked of them

was to look at the criteria that the protocol provides, and see if

there might be more that could be done to make a good case that

those criteria were met. Because a review of it by the technical experts indicated that there was weakness in that case, and EPA has

indicated that they would work with them. And in my statement,

I tried to describe the timing of the process of all these exemptions,

but we didn’t really talk about the fact that there are other opportunities. There is a supplemental process. There is time between

now and the meeting when adjustments can be made, so if, indeed,

they are able to come back and make a stronger case that they

have met the criteria, we would certainly take a look at that before

we would make additional submissions to the international body.

Mr. HOLDEN. Thank you.

Mr. LUCAS. Chair thanks the Ranking Member, and turns to the

gentleman from Michigan.

Mr. SCHWARZ. Thank you, Mr. Chairman.

A couple of questions, if I may.

In reading the background material supplied by Secretary

McMurray, there is mention of some other compounds that might

be alternatives to methyl bromide. They are all halogenated compounds. What is the difference between one halogenated compound

and another halogenated compound? If you using one

chlorofluorocarbon, why is it better to use another one? Why is the

chloride compound—I believe it was a chloride compound—better

than using methyl bromide? Actually, it was chloromethane I think

you mentioned in the paper.

Ms. MCMURRAY. Chloromethane. Congressman, if you would permit me, I wonder if I could as Ms. Hazen, whose office is responsible for approving these alternatives, to give you a more detailed

answer.

Ms. HAZEN. There are quite a few alternatives that have either

been registered or are actually currently under consideration for

registration. And as EPA looks at methyl bromide alternatives,

which are given the highest priority in our registration process, we

go through and determine the significance of the impacts across the

board, not only on human health, but also on the environment. And

those that have been registered and those which are currently

pending to be registered are looked at with an eye towards whether

or not they can be effective and used in amounts and volumes that

will not have an undue impact on the environment.

So we look at that. I can not answer your question specifically

in terms of the technical relative relationship between the two, but

I would be happy to take that question back for the record and get

you a more precise technical written answer.

Mr. SCHWARZ. To make it very simple, why is one halogen-containing compound, in this case a chlorinated compound, better than

12

a brominated compound? Or why would a fluorinated compound be

better than a brominated compound—take all the halogenated compounds?

Ms. HAZEN. We would be happy to take that back for the record

and get you a precise written answer.

Mr. SCHWARZ. OK, thank you.

Another question. How compliant are countries in the EU for the

Montreal Protocol?

Ms. MCMURRAY. I will take a stab at that one.

I think generally to compare numbers, we would have to look

critical use exemption requests versus what the U.S. submits. And

we have some difficulty in obtaining the information for individual

member States for the European Union, because they submit their

information as a whole. We are able to divine some specific information that deals with countries that are similar to ours, such as

Italy or Spain, as far as the same crops and the same climate.

As far as their compliance, I would say generally we have not received any evidence that they are out of compliance, but if there

is a specific question you have on some specific element of the protocol, we would be happy to try and answer that for the record for

you.

Mr. SCHWARZ. Yes, the point being are our horticulturists and

nursery owners and green operations getting hammered because of

the Montreal Protocol and because of the fact they are scrambling

to find an alternative to methyl bromide, whereas everybody else

is getting a pass?

Ms. MCMURRAY. I think I pointed out earlier that there are differences that are country specific, that are even regional differences

between the United States, and since you mentioned Europe, European countries. There are some countries that just don’t have the

same climate or pest pressures that we have here in the United

States, and so it is easier for them to get off of methyl bromide.

Mr. SCHWARZ. Or stay on.

Ms. MCMURRAY. Or stay on. But each country’s application is reviewed under the same technical criteria of economic and technical

feasibility. So we are giving just as hard an eye to their applications as they are to ours when they come into the international

arena.

Mr. SCHWARZ. Thank you, ma’am. Thank you, Mr. Chairman.

Mr. LUCAS. You are welcome. The gentleman from North Carolina, Mr. Etheridge.

Mr. ETHERIDGE. Thank you, Mr. Chairman, and let me thank

you for holding this hearing so we can shed more intense light on

this, I think, very important issue. And we say we all are concerned about protecting our environment, including the critical

ozone layer, the Earth’s atmosphere, because it is important to all

of us. And that is why the United States is a party to the Montreal

Protocol.

Nevertheless, the farmers of North Carolina have a very keen interest in the treatment of methyl bromide under the protocol, because they use it to treat soils for nursery crops and tobacco, the

two top crops in our State. And we produce a lot of sweet potatoes

in my district as well, and as you can appreciate, that is used

there, too.

13

So Ms. McMurray, let me ask this question. Your testimony, as

I read it, ignores a big complaint we have been hearing and will

hear from the next panel that will follow you, and that is transparency of the CUE’s process. You mentioned the adoption of Decision 16–4. Does the decision provide guidance to the MBTOC regarding improving transparency, or will industry observers continue to be kicked out of meetings and prevented from simply listening to how MBTOC’s recommendations are being made?

And on a related note, you said the decision will provide time for

MBTOC’s recommendation for a Protocol party to appeal. My question is, appeal to whom, and how will that work exactly?

Ms. MCMURRAY. You have asked several questions there. I will

try to——

Mr. ETHERIDGE. I did that so I could save my time. Thank you.

Ms. MCMURRAY. I will try to pull them apart one by one.

We worked very hard for several months to find a process that

all of the parties could agree to, but that was satisfactory from our

standpoint, as far as bringing more transparency and fairness to

the technical review process. Because indeed, everyone has pointed

out here this morning when we started, this was complicated, this

was new. The technical reviewers had more factors than they had

ever looked at before with other chemicals, and it was clear that

they were having a hard time with it, and that we weren’t getting

a satisfactory review.

So this decision that was taken back in November tried to get

at the concerns that you just articulated. The biggest thing for us,

I think, was when we get a decision back—or not a decision, but

a recommendation back from the technical committee, we need to

be able to look at it and understand why they came to the decision

they did. Certainly in 2005 and even in this past year, we have

looked at it and haven’t been able to discern what the basis for the

conclusions were, and we have had to spend a lot of time back and

forth trying to get to that answer, and most times when we do get

to the answer, we realize that they have misunderstood our data

or they have misunderstood our application or our economic approach or whatever.

So the biggest thing I think we have asked them to, and we will

see in this next round how well they do it, is to document precisely

what studies they are basing their findings on, what other conclusions they have made, and how they got to those.

I think also I mentioned the direct communication between the

parties and the technical reviewers. That is really, really important. It shouldn’t be a mystery novel or a giant black box. We

should be able to have direct conversations, and this decision calls

for that.

Also, something that was quite important to us in the United

States, which I mentioned earlier, which is we have a lot of very

specific circumstances in your State and in others that don’t exist

in other parts of the world. And they are reasons why we still need

to use methyl bromide. We need to have those specific circumstances looked at by the technical reviewers. We can’t just have

them adopt some kind of a one-size-fits-all approach that really disadvantages the United States.

14

And then finally, you asked about appeals. We haven’t tried this

process out yet, so I don’t know that I have a lot of specifics to offer

you at this point. But there is an opportunity for an appeal if a

MBTOC recommendation comes back that we are unhappy with.

We haven’t, as I say, had the opportunity to use this yet. It would

go back to the same technical reviewers, and obviously, we could

go to the parties if we still weren’t satisfied with the response we

got after that. But as far as my being able to tell you how well this

works, I can’t yet, because we haven’t—and hopefully we won’t

have to take advantage of it. But I can certainly report back to you

if we do use it in the near future.

Mr. ETHERIDGE. Mr. Chairman, I have some follow-ups, but I see

my time is up. I hope you will keep us apprised of that and follow

up. I think that is one of the critical pieces that we are talking

about today.

Thank you. I yield back.

Mr. MORAN [presiding.] I think this question is directed at Mr.

Smith, but I would be happy to have anyone respond.

Mr. Smith, to the extent that there is a stockpile of methyl bromide, does it maintain some semblance of price control over this

product? And as we begin to bleed off the supply, I assume it is

likely that prices will rise to the point where the product may not

be affordable to those who are purchasing it. Is there a plan, a

thought given to the consequences of this?

Mr. SMITH. Representative Moran, although USDA has not conducted a formal study with regard to pricing under the critical use

exemption system, we have considered, in our role to advisors to

EPA and to the Department of State, likely impacts on the market

for methyl bromide, and the effect on commodities grown or processed with the aid of methyl bromide.

On the supply side, there are actually three sources for methyl

bromide under the scheme that has been set up under the Environmental Protection Agency’s allocation rule. They include a domestic

manufacturer, imports, and then also sourcing material from existing material, and I believe what you used the term ‘‘stocks.’’

The ability for a user of methyl bromide to source their critical

use exemption from any of the three means that there will be a

level of competition, not dissimilar to that which has existed previously. And so in discussions with the economists at USDA, we do

not anticipate that the market supply and demand will be dramatically different in 2005 than previously. And therefore, should not

have significant impact on pricing.

Mr. MORAN. Which I believe answers my follow up question,

which does USDA have an estimate of the cost that the agreement

to use existing stocks for critical uses will impose on methyl bromide users? The answer that you have just given that USDA’s position would be that the cost would not be changed?

Mr. SMITH. Again, at this point, the market will fluctuate year

to year, and so for that reason it is difficult to establish what is

a result of just annual differences in the market and what might

be a direct effect of any type of regulatory scheme.

Mr. MORAN. Thank you very much.

The gentleman from Texas.

Mr. CUELLAR. Thank you, Mr. Chairman.

15

I guess to either of you, since the 1985 U.N. Vienna convention

on protection of the ozone layer, what are the three major studies

dealing with scientific findings on both sides of the argument? I

mean, if you would have to name them, what would you name?

Ms. MCMURRAY. If I could ask you to clarify your question. Are

you focused on methyl bromide or are you——

Mr. CUELLAR. Oh, I am sorry. Yes, I apologize. Yes, on the MB,

yes.

Ms. MCMURRAY. I might have to take that one back for the

record. I am not sure I could cite specific studies. If you are referring to its potential to deplete the ozone layer, perhaps, there are

studies to that effect which we could certainly provide you for the

record.

Mr. CUELLAR. OK. Do you mind, and if you have anything on

both sides of the issue?

Ms. MCMURRAY. We would be happy to provide you.

Mr. CUELLAR. And I don’t want a laundry list, just what you all

might consider the top three studies on that.

Ms. MCMURRAY. OK. I would be happy to provide you that for

the record.

Mr. CUELLAR. Thank you, ma’am.

Mr. LUCAS [PRESIDING.]. Seeing no further questions, the Chair

would like to thank the members of this panel for their testimony

today. It has been extremely helpful for us to get a better understanding about the process and factors that influence the development of the 2007 critical use nomination.

In particular, I am relieved to hear that there was consideration

given to the question of how the 2007 nomination would impact the

ongoing negotiations for our 2006 nomination. That said, I am still

concerned with our experiences thus far with the methyl bromide

technical options committee. The fact that certain changes were

agreed upon in Prague, while useful but not necessary, put our

minds at ease that our friends in the international community will

abide by these changes and limit their review to the biological and

chemical sciences as opposed to the political sciences, so to speak.

While I am grateful that we have such a strong group of negotiators working on this issue, you should know that this subcommittee will continue to watch this issue very closely to ensure

that our constituents are well represented.

And with that, thank you, Madam Secretary, for your time and

your insights today.

Ms. MCMURRAY. Thank you, Mr. Chairman.

Mr. LUCAS. And we call upon our second panel to come to the

table when they are ready. We would like to invite our second

panel to the table. Ms. Rebeckah T. Freeman, director, government

relations, American Farm Bureau Federation, Washington, DC; Mr.

James A. Bair, vice president, North American Millers’ Association,

Washington, DC; Mr. Daniel Botts, director, environmental and

pest management division, Florida Fruit and Vegetable Association, and on behalf, of course, of the Crop Protection Coalition; and

Ms. Michelle Castellano, attorney and vice president of the Mellano

and Company, San Luis Rey, CA, on behalf of the Society of American Florists, the American Nursery and Landscape Association,

the Florida Nursery, Growers and Landscape Association, and the

16

California Cut Flower Commission. You have quite a group to represent. And Mr. Rodger Wasson, president of the California Strawberry Commission, Watsonville, California; and Mr. William Carey,

School of Forestry and Wildlife Sciences, Auburn University, Auburn, AL.

Ms. Freeman, when you are ready.

STATEMENT OF REBECKAH FREEMAN, DIRECTOR, CONGRESSIONAL AND REGULATORY RELATIONS, AMERICAN FARM

BUREAU FEDERATION

Ms. FREEMAN. Good morning, Chairman Lucas, Mr. Holden, and

members of this subcommittee.

My name is Rebeckah Freeman, and I am the director of congressional and regulatory relations for pesticides, crop protection, and

air quality issues for the American Farm Bureau. On behalf of our

membership, I want to thank you for your interest and the opportunity to address the subcommittee regarding our alarm and disappointment on the critical use exemption process under the Montreal Protocol.

I would like to submit my full written testimony for the record,

and I am going to try to abbreviate it a bit, and I will talk until

my 5 minutes is up or until my voice runs out.

Mr. LUCAS. Perfect. Seeing no objections, so ordered.

Thank you.

Ms. FREEMAN. Noncritical use of methyl bromide in the United

States was completely phased out in the beginning of this year in

compliance with the Montreal Protocol. Where economically and

technically feasible alternatives exist, agriculture users have met

their phase out schedule and have stopped using fumigant. But despite significant ongoing efforts to find alternatives, methyl bromide remains an indispensable pest control tool for important uses

in crop production, grain storage, food processing, and general pest

management.

I hope to make three points today.

First, the secure and continued adequate availability of methyl

bromide for domestic users through the CUE process is economically essential, scientifically defensible, and legally justified.

Second, that the Montreal Protocol CUE review process is broken, and the United States should work actively to repair the system.

And lastly, in light of international reluctance to honor the terms

of the protocol, Congress should work to assure that U.S. agricultural users have fair access to the methyl bromide they need.

For many Farm Bureau members, the use of methyl bromide as

a pre-plant treatment is essential, for example, in production of

strawberries, tomatoes, grapes, almonds, walnuts, peppers, eggplants, cut flowers, and numerous other products. To gain an economic perspective, a recent study found that a complete ban on

farm uses of methyl bromide for annual fruit and vegetable crops

alone in California and Florida would result in an estimated loss

of about $200 million a year annually, or about 20 to 30 percent

of their estimated revenues from the treated commodities in each

State.

17

Pre-plant treatment of methyl bromide controls soil-born pathogens and pests that reduce the vigor of newly planted crops. Methyl bromide improves yields because the need to hand-weed and cultivate soil is reduced, meaning more efficient irrigation is possible.

Better yields mean better margins, and better margins mean more

financial stability. Poor yields mean less stability, and less stability

puts some producers at the risk of not getting next year’s planting

loans. For those without feasible alternatives, methyl bromide continues to be the only consistently effective and economical treatment that can be applied within a flexible time frame without

harm to the food product, or in some circumstances, other natural

resources. With rare exception, it works every time, all the time.

However, the reality is is that feasible alternatives do not exist

and are not expected soon for a significant number of the agriculture users currently requesting CUEs. Despite claims to the contrary, there simply is no one-size-fits-all replacement, or combination of replacements that works as effectively, as consistently, and

as affordably as methyl bromide.

At previous oversight hearings, Congress has voiced their concerns over this issue, but unfortunately, those concerns have not

resonated within the international community, and the Montreal

Protocol grows steadily worse.

The terms of the protocol clearly intend for the CUE process to

provide use to any user’s critical documented need for methyl bromide. Our users have committed a lot of resources to get good information to EPA. EPA has sorted through that information, and

the State Department has argued very hard at the international

level to get American producers what they need. Unfortunately,

this tremendous combined effort has born little, if any, proverbial

fruit. U.S. producer must have approved CUEs to prepare for each

planting season, and our delegation has effectively been forced to

continue to accept objectionable terms with very little hope of

meaningful recourse or remedy.

Farm Bureau strongly believes that the CUE approval process

should be based on the real sometimes fluctuating need, and not

subject to re-negotiation based on political needs. The international

community has graphically demonstrated that the international

process is not objective, not transparent, and not science-based. We

are no longer playing by the rules we signed up for. Participants

like Farm Bureau have not been allowed to observe technical debates among the parties regarding our own domestic needs, and

were it not for the cooperation and diligence of the U.S. delegation

to keep us informed, we would pretty much find out what our producers got after the fact. We have seen and experienced enough of

the protocol process to be convinced that it is currently broken and

it can not be relied upon to fairly evaluate the legitimate methyl

bromide needs of the American producer.

The protocol is no longer about ozone protection. Rather, the

rules have been changed to suit the political agendas, gain economic advantage, and these new rules have nothing to do with environmental protection, and everything to do with putting American producers and consumers at risk.

The United States Government signed the protocol in good faith.

Congress ratified its terms into law. Our country has drastically reVerDate 11-SEP-98 13:51 Apr 27, 2005 Jkt 020658 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 F:\DOCS\109-3 HAGRI PsN: HAGRI
18

duced the use of ozone-depleting substances, and domestic users of

methyl bromide have unequivocally justified their critical use needs

to international users. We are holding up our end of the bargain.

We have every right to expect the parties to do the same.

And we have some suggestions about where Congress may want

to go relating to this issue, and I am going to let those be included

in my written testimony.

Thank you, and I am happy to answer any questions.

[The prepared statement of Ms. Freeman appears at the conclusion of the hearing.]

Mr. LUCAS. Thank you.

Mr. Bair.

STATEMENT OF JAMES A. BAIR, VICE PRESIDENT, NORTH

AMERICAN MILLERS’ ASSOCIATION

Mr. BAIR. Thank you, Chairman Lucas, Mr. Holden, and members of the subcommittee.

I am Jim Bair. I am vice president of the North American Millers’ Association. We represent 48 companies that operate 170

wheat, corn, and oat mills in 38 States. In fact, there is a mill in

every State represented on the subcommittee and in just about

every one of your districts. Those companies produce about 160 million pounds of product every day, which is a little more than 95

percent of the total industry capacity.

I will be brief. I realize that this topic is one that is new for

many of you, and you have heard a lot already, and you have got

a lot of written testimony, and after a while it can make your head

hurt. Allow me to put it into context what all this controversy is

about. I just want to cite from a couple of locations on the second

to last page of my written testimony, and those are direct quotes

from the EPA web site.

And the first one is this. To your point, Mr. Holden, about the

success of the treaties so far, the first point is—and again, I am

quoting directly from the EPA web site.

Anthropogenic or man-made, methyl bromide has contributed a total of about 4

percent to ozone depletion over the last 20 years, and of this, 21⁄2 percent can be

contributed to agricultural fumigation activities.

So 21⁄2 percent of 4 percent. And the next point which I think is

really key, it says—and you have heard about the MBTOC already

the MBTOC recommendations to approve 35 percent of the U.S. critical use nomination represents 0.4 percent of the ozone-depleting substances—of all the ozone-depleting substances from all the countries that were parties to the treaty when it was

first negotiated.

Or to turn that statement around, if you took the U.S.’s critical

use nomination representing all of the interests here and many

more, that quantity represents 0.4 percent of all the ozone-depleting substances from all the countries when this treaty was first

signed. That is a number that is, in absolute terms, is inconsequential and as a comparison, relative to the benefits of food and agriculture is a number that is so small as to approach zero, particularly when you consider the tremendous benefits that it brings to

food and agriculture.

I also wanted to comment quickly about the CUE process. I think

that the parties to the protocol have an unhealthy obsession with

19

secrecy and undemocratic decision making. Mr. Etheridge asked

about that earlier. If this subcommittee behaved like a Montreal

Protocol body, everybody at this table and everybody sitting behind

us would have to leave the room when the substantive discussions

started taking place. I and everybody at this table, have personally

been kicked out of these Montral Protocol meetings. And these

were meetings that were held in huge auditoriums and we sat in

the back row. And it wasn’t our intention to even say anything, we

just wanted to sit there and observe and hear what the negotiations were, hear the points. And when we were noticed sitting in

the back of the room, we were told that we had to leave. That

doesn’t represent any sort of good policy making as we know it here

in the United States, certainly.

Ultimately, the fate of our critical use exemption applications are

determined by a handful of people behind closed doors, and those

people are unaccountable to U.S. taxpayers. And what is worse, in

my view, is that the U.S. funds about 25 percent of the Montreal

Protocol activities. Over the last 3 years, that total amount was

$573 million, so our share of that would be $190 million or so.

Mr. Schwarz asked about other countries and how they have

been able to get rid of methyl bromide. I spoke at an industry conference once that had hundreds of people from around the world,

and I was describing the efforts in Washington to save methyl bromide for critical uses in agriculture and food production. And there

was a delegate there from Norway, and he stood up in the front

row and started berating me that the United States was not as

committed to saving the environment, and on and on and on, and

frankly, got quite personal to the point where I finally said banning

methyl bromide in an agricultural powerhouse like Norway must

have required a huge commitment and I congratulated him on that.

I want to talk about what I consider to be arbitrary cuts in our

CUE. In multiple hearings in front of the Committee on Agriculture, as well as other congressional committees, you have heard

about this. Let me just say that well in advance of the Montreal

Protocol, my industry had voluntarily reduced its usage. The EPA

label allows for this compound to be used in our facilities at up to

6 pounds per 1,000 cubic feet. Unlike some of the other that you

will hear from, we don’t treat soil. We are just treating the insides

of grain mills. And we do so because keeping food produced in a

sanitary setting is something that the Government demands and

consumers reasonably expect. We have cut our methyl usage down.

We are not using it at the EPA approved label rate of 6 pounds;

we use it about 11⁄4 pound.

Further, when we have submitted our CUE applications, each

year we have voluntarily cut that number further down, and then

it goes to EPA and they cut that number again, and then it goes

to the United Nations Montreal Protocol, and they cut that number. And after a while, people are starting to say ‘‘Well, gee, as sort

of an opening poker play, why don’t we ask for more than what we

need so that when all the cuts are made, we will have an amount

that is nearer or more close to what we really need.’’ We haven’t

done that. We have tried to play the game according to the rules

as we understand them, and we have tried to be good guys, and

do the responsible thing. But you get penalized for doing the right

20

thing because you put in a legitimate number as best as you can

calculate it, and that number just gets cut further and further at

every step in the process.

I wanted to make one more quick comment, and then I will close,

Mr. Chairman. I did want to say that in reference to some of the

earlier conversation about alternatives. This compound is different,

or our use of the compound is different than, for example, CFCs as

I think one of the members of the subcommittee referenced. In refrigeration and uses of chlorofluorinated compounds, that is an engineering problem. And smart engineers can figure out how these

substances work inside a refrigeration compressor. And the physics

of that doesn’t change from year to year. Our use of this compound

is a biological problem. Insects change from year to year. Weather

changes all the time. My colleagues who do use it as a soil fumigant, they have different soil types. So it is an apples to oranges

comparison to say that just because the problem associated with

chlorofluorinated compounds was solved that we can do the same

thing for methyl bromide. That is not true. Also I would object to

the notion that the critical use exemptions are merely a glide path

which was intended to get us to zero beyond the phase out date.

There is nothing in the treaty that talks about it. The treaty that

Congress ratified, says ‘‘At the end of the phase out period, there

will be critical use exemptions available for those industries which

can demonstrate a need.’’ It doesn’t say they will be available to

them only for a certain amount of time and in declining amounts,

at the end of which period of time they will also be at zero. That

is not the treaty that we signed on to.

Thank you very much.

[The prepared statement of Mr. Bair appears at the conclusion

of the hearing.]

Mr. LUCAS. Thank you, Mr. Bair.

Before we proceed to the next witness, that sound you heard outside probably was Angus, the Agriculture Committee’s official dog.

I would say he probably ran across one of the judges from the most

recent Cotton WTO case.

We now turn to Mr. Botts.

STATEMENT OF DANIEL A. BOTTS, DIRECTOR, ENVIRONMENTAL AND PEST MANAGEMENT DIVISION, FLORIDA

FRUIT AND VEGETABLE ASSOCIATION, MAITLAND, FL, ON

BEHALF OF THE CROP PROTECTION COALITION

Mr. BOTTS. Thank you, Mr. Chairman, and members of the committee.

My name is Daniel Botts. I am the environmental and pest management director, Florida Fruit and Vegetable Association, speaking both for that association today, and on behalf of the Crop Protection Coalition, which is a coalition that was created of industries

that depended on methyl bromide in crop production storage and

marketing of products back in 1993.

As Florida Fruit and Vegetable Association, though, I would like

to focus my comments today specifically on the topic of CUE petitions and the international review of those petitions. Florida Fruit

and Vegetable Association has been actively engaged in research

programs to look for alternatives since 1991, when the initial petiVerDate 11-SEP-98 13:51 Apr 27, 2005 Jkt 020658 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 F:\DOCS\109-3 HAGRI PsN: HAGRI
21

tion for listing methyl bromide as an ozone-depleting substance

was put forward to the Federal Government. That was prior to any

Montreal Protocol action, or prior to even the rule that was established under the Clean Air Act in 1993. We did this for one important reason. When this petition was filed, it pointed out to us that

we could not be dependent on a crop production tool as a foundation of our production practices that is a single compound. We had

to have alternatives.

I would like to report this morning that we have alternatives

coming out of the woodwork and are able to produce crops in plastic molds culture in Florida at the same level of production efficiency, at this point, that we do in methyl bromide. Unfortunately,

that is not the case. Because of that situation and because of the

process that was put into place at the international level, called the

critical use exemption process, under a set of criteria that was established by the parties to the Montreal Protocol and the process

for which input was developed through a public process, similar to

rule making in this country, we have attempted to comply to every

step of the way with the criteria and concerns in the critical use

exemption process.

The initial petition that we submitted in 2002 for four commodities, it was actually three petitions because we did tomatoes as a

single petition, strawberries as a single petition, and then included

in non-solinatious crops peppers and eggplants in a single petition.

Comprised over 5,000 pages, not only of the narrative associated

with our description of why we needed the critical use exemption

for those commodities, but also the supporting research documentation associated with that effort to try to find alternatives.

That was followed in 2003 by a subsequent petition that was consolidated, which represented over 3,000 pages of which a little over

500 pages are in the docket associated with the CUN process. And

then the latest round, an additional 1,800 pages were submitted to

meet the criteria as we understood it from the international level.

One of the most frustrating parts of this process is the fact that

those criteria change. And most of the time, those changes take

place after our petitions have been filed. In fact, the process that

Secretary McMurray alluded to in looking forward is fine. But we

are subject right now to a process that has been in place that was

developed and put forward historically. And quite frankly, we don’t

think it works, primarily because of the lack of transparency that

occurs and the time pressure associated with the international review of what is submitted and goes forward from the U.S. petition.

We encourage this committee to stay engaged in this process to

ensure at some point that there is transparency in this international regulatory process. It is extremely frustrating to have a

product that is so critically important to us trivialized at the international level, based on the personal experiences of members of

MBTOC on the circumstances of use in their country and the products that they claim we have as alternatives. We have products, alternatives that work in some areas of Florida better than others,

and it is totally different than what the use patterns are in other

countries. We are also at the point that we are using a process of

production that has already minimized our use of methyl bromide

to the point that we are at marginal efficacy for the primary pests

22

that have been identified as the controlling factors for CUEs, which

a nut grass, purple and yellow, and the production practices we

have.

In light of the question relative to the 2007 petition, and this is

where a little history is important. The initial petition that we submitted was based on having a particular herbicide available in a

cocktail of pesticides to allow us to achieve your equivalent efficacy

to methyl bromide. After our initial petition was filed in 2002, that

pesticide no longer was available because the registration was no

longer available in the U.S. We have struggled to find alternatives

to that herbicide to move forward; yet the numbers that we seem

to be bound to, because of reductions, are based on some of the initial work that was done that included this particular herbicide. So

we have some serious questions relative to our ability to meet the

levels of reduction that the U.S. Government put forward in their

2007 petition, because looking at the research available in Florida,

we are essentially no better off from an alternative standpoint than

we were in 2002, which justified a much larger request.

With that, I will be happy to answer any questions as the committee meeting goes forward.

[The prepared statement of Mr. Botts appears at the conclusion

of the hearing.]

Mr. LUCAS. Thank you. The Chair would now like to turn to the

gentleman from California, Mr. Costa, for an introduction of our

next panelist before she makes her opening comments.

Mr. COSTA. Thank you very much, Mr. Chairman. Those of us

who serve on this committee from California are very pleased this

morning to have Michelle Castellano testify as a witness. She

comes from a part of our State that has a great deal of familiarity

with the subject matter that we are dealing with here today.

As an attorney and vice president of the San Luis Rey company,

Mellano and Company, San Luis Rey, she has experienced many efforts for us to continue to use methyl bromide in California under

different changes of State law, and understands its applicability

and importance to the American florist industry. Many people

aren’t aware of it, we have an active nursery and fresh-cut flower

industry in California, throughout the central coast in particular.

And it has had to deal with a lot of difficult challenges and a global

world market. The use of methyl bromide is an important tool that

the fresh-cut flower industry utilizes in terms of its ability to stay

in business, along with maintaining the nurseries that are a viable

part of that effort.

And we are very pleased to have Michelle Castellano here testifying, and we want to welcome you here on behalf of the committee,

and those who serve on this committee from California.

Thank you very much.

Mr. LUCAS. You may proceed when you are ready, Ms.

Castellano.

23

STATEMENT OF MICHELLE CASTELLANO, VICE PRESIDENT,

MELLANO AND COMPANY, SAN LUIS REY, CA, ON BEHALF OF

THE SOCIETY OF AMERICAN FLORISTS, THE AMERICAN

NURSERY AND LANDSCAPE ASSOCIATION, THE FLORIDA

NURSERY, GROWERS AND LANDSCAPE ASSOCIATION, AND

THE CALIFORNIA CUT FLOWER ASSOCIATION

Ms. CASTELLANO. Thank you, sir. Thank you, members of the

committee. I am grateful for the opportunity to provide joint testimony on behalf of the cut flower industry, and the nursery and

landscape industry.

The topic of continued availability of methyl bromide is of huge

importance to our industry. Our industry represents 15 percent of

the dollar value of U.S. crop agriculture.

I have submitted a written statement and would briefly like to

comment.

The bottom line is we are in compliance with the Montreal Protocol, and we would be very happy to live within the parameters of

the Montreal Protocol terms. However, the protocol that seems to

be in place now is not the protocol that this government signed up

for in the late 1980’s. And my question and my concern today is,

is this government going to protect us under the terms of the treaty that it originally agreed to?

I spent my Thanksgiving holiday, as did most people on this

panel, at the international meeting of the parties. And that is why

we are here today, to tell you firsthand that though we are in compliance with the protocol, the international Critical Use Exemption

process that is taking place is not in compliance, and the ones that

are suffering are our industries. We are cut flower growers in San

Diego, and personally, if we don’t have access to methyl bromide,

we can not produce a competitive crop. What eventually is going

to happen is that our industry will go south of the border to Mexico

or another lesser developed country where, as indicated earlier,

they don’t have the same restrictions. And with that industry is

going to go the jobs that are associated with it.

At the international meetings, many of these lesser developed

countries, as well as the EU and environmental groups, are putting

pressure on the voting parties, as well as MBTOC, to arbitrarily

cut the U.S.’s requests with no scientific justification. There is an

implication that there should be a phase-down, as indicated earlier,

of our Critical Use Exemption. And again, this is completely out of

the protocol.

Critical Use Exemptions, by the terms of the protocol, are supposed to be based on scientific research, all of which our applications are accompanied by. However, this arbitrary reduction seems

to be taking place in spite of our scientific justifications. Despite

our compliance, MBTOC took the United States’ applications and,

as discussed earlier, made a 27 percent cut across the board. That

is an average cut. Everyone’s commodities here were different, and

in cut flowers, we actually got none whatsoever. So we are looking

at 2006 right now with no CUE allocation.

At the international meetings, Claudia McMurray and her staff

spent 41⁄2 of the 5 days, I would say, inside rooms negotiating with

the EU on these numbers. Claudia is doing a great job of standing

firm for us; however, she should not have to negotiate that number

24

and come to a consensus with these lesser developed countries and

the EU. We followed Montreal Protocol terms. We filed an application. We have the research that justifies our amounts. We have justified our need, and we are in compliance with the Montreal Protocol. And we look forward to our Government making sure that our

agricultural industry is protected under the terms it originally

signed up for.

I thank you, and I am happy to answer any specific questions.

[The prepared statement of Ms. Castellano appears at the conclusion of the hearing.]

Mr. LUCAS. Thank you.

Mr. Wasson.

STATEMENT OF RODGER WASSON, CALIFORNIA STRAWBERRY

COMMISSION, WATSONVILLE, CA

Mr. WASSON. Yes, good morning. My name is Rodger Wasson. I

am the president of the California Strawberry Commission. The

Commission appreciates this opportunity to provide comments on

the critical use exemption process for methyl bromide to this subcommittee.

Mr. Chairman, in consideration of time, I will summarize some

of the high points, and I have written testimony that has been provided.

Until viable alternatives can be found, California’s strawberry

growers will continue to need access to methyl bromide. We have

a long history of funding the alternatives research. We are going

to continue to do so. Some of the hurdles the growers face are economic, and some of them are technical. Regardless, there are hurdles that are preventing a more rapid transition to alternative

products.

Even with these challenges, we have already transitioned to having over 35 percent of our acreage, which is producing about 88

percent of the commercial production of strawberries in the United

States, converted to alternatives. So we have got over 35 percent

converted to alternatives.

Our situation is, though, that while the alternatives work well in

some circumstances, they don’t in others. They will work in some

parts of the country, and in some parts of our State, and some

other areas they don’t work as well. But we are continuing to press

ahead. We are continuing to see much expansion in interest by all

of our growers in trying the various alternatives. And we expect to

continue that way.

So our need for methyl bromide we believe can be fulfilled in the

short-term through the critical use exemption process, if it is allowed to function as it was designed.

I think that it is important when we work in providing information to our Environmental Protection Agency, and we work very,

very hard with them providing the answers. And we have got very

complicated situations; the international body needs to recognize

where this is coming from. You can’t just have an international

group or technical operating committee working globally, look back

at the practices that we have here in the United States, and really

be experts themselves, when they meet three or four times a year

for a couple of days, and know all the circumstances, all the situaVerDate 11-SEP-98 13:51 Apr 27, 2005 Jkt 020658 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 F:\DOCS\109-3 HAGRI PsN: HAGRI
25

tions everywhere in the world, down to the township level. It is a

very complicated situation. And in the State of California, we additionally have rules and regulations that restrict our ability to transition as rapidly as we would like in some cases. We have township

caps. We have buffer zones. We have rules in the State of California so that even though a grower may want to be able to go into

an alternative, in some cases, there is a cap that will not allow

them to use that. And that keeps changing. And when you try to

explain that through the EPA and on to the international body, it

is something that understandably is very, very confusing. They

can’t relate to it. And in some cases, they will say ‘‘well, we understand you could still be able to use this alternative here.’’ But what

they don’t understand in those cases is that growers of other commodities also can purchase the methyl bromide or can purchase the

alternatives. And we have had townships in the State of California

where growers were ready to move over to an alternative, and they

could not do it. We are working through that. We are working with

the producers of the alternatives. We are working through the Department of Pesticide Regulation. But this is an example of why

when our country decides that we need a critical use exemption

they have to take a strong stand. They have to stand strong. They

have to go to the international community and explain, ‘‘we know

what we are talking about.’’ This is our circumstance, and we are

going to work with the United States growers.

And they also have to go to that body, though, without assuming

that there will be an automatic step-down. There isn’t a policy in

the United States, nor is there a policy in the Montreal Protocol,

that has an arbitrary step-down of 20 percent a year, or something

like that. We need to look at the crops, look at the commodities,

see what is actually needed, and then take that request forward.

Now, I will say one thing. And that is in the State of California,

there are some good ideas to look at. I mentioned that we have regulations that are unique to California that we have to balance with

the international rules. But the other thing that we have done in

the State of California, we have shifted our own methyl bromide

rules and regulations to focus on what should be emissions. And so

it is not so much just the tonnage that is used in key areas, it is

what of the use of this product gets into the atmosphere. So we feel

that there is an opportunity in this discussion to put more emphasis back into looking at emissions. For example, we are looking at

technologies that would allow us to use less methyl bromide, perhaps emulsified with water, drip apply it, put it under tarps that

are not allowing any to escape to the atmosphere. Basically have

a huge reduction in any kind of emissions into the atmosphere.

This should be part of the debate.

The other thing is that there continue to be products available

that are still out there, such as halon. It is acknowledged as a

much more serious concern to the environment and to the ozone

layer. Why couldn’t we explore swaps that would allow for the

amount of methyl bromide that we continue to need; that instead

that we destroy halon in exchange? That is something that should

be on the table, as well.

Every other major international treaty that you are looking at

now is having swaps, looking at s having emissions, or having inVerDate 11-SEP-98 13:51 Apr 27, 2005 Jkt 020658 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 F:\DOCS\109-3 HAGRI PsN: HAGRI
26

centives for the industries to make some of these transistions. They

could be made a part of the Montreal Protocol, even though it

wasn’t anticipated when we started the Montreal Protocol. There is

some fertile ground, I believe, for us to pay attention here.

And then just finally, I want to comment on a question that was

raised about our competition to other countries. And I think that

that is very significant. We know that in the last few years, China,

in particular, has decided that they are going to focus on specialty

crops. The congressman from California know, there is a long list

of our commodities that have been very much affected and have

been targeted by China. They have 10 more years to phase out

methyl bromide. It is just another example of where there is a competitive edge. They have taken a lot of our freezer market away

from us in Japan, and beginning this season, we are seeing a huge

increase from China of frozen strawberries coming into the United

States. And again, it is an example of where they have an additional 10 years to be able to use the product. That is very concerning to us.

I appreciate the opportunity to make these comments, and I

would be happy to answer questions.

Thank you very much.

[The prepared statement of Mr. Wasson appears at the conclusion of the hearing.]

Mr. LUCAS. Thank you.

Mr. Carey.

STATEMENT OF WILLIAM A. CAREY, SCHOOL OF FORESTRY

AND WILDLIFE SCIENCE, AUBURN UNIVERSITY, AUBURN, AL

Mr. CAREY. I want to thank everyone for the opportunity to address the committee. Its efforts are vitally important to all the

CUE applicants, I believe.

I can demonstrate the importance of this issue to our forest nursery industry by briefly describing the Southern Nursery Management Cooperative that I work for, our resources and the efforts we

have taken out of those resources.

The co-op has 11 members, which are southern States. Six forest

nursery industry members, and two private forest companies that

pay us an annual dues of a little over $8,000 a piece. And from

this, we have produced the research effort that I have attached to

my testimony.

Over 30 studies on methyl bromide alternatives since 1993, that

is a lot of work. Over the last decade, most of that effort has been

trying to determine how we will produce seedlings without methyl

bromide.

Our efforts began in 1993, focused on the apparently doable job

of finding a suitable replacement for methyl bromide among the

registered and available chemical substitutes, such as dazomet,

metham sodium, and chloropicrin used in various combinations.

Surprisingly, the alternatives we tested produced some damaging

side effects that we have not been able to control, and it is not the

fact that the efficacy is not there. We can produce seedlings, but

the liability is too great to implement a lot of these alternatives in

many situations.

27

We have been involved in the CUE process since 2002, in the

first round of meetings held by the EPA to discuss the application

process. Working with instructions from these meetings, we filed

our first CUE in September 2002. In October, I was asked by the

EPA to help evaluate CUEs for other commodity groups. I think

they got a pretty good understanding of the realities enforced nurseries by working with me and I working with them.

We worked through the allocation process for several things, and

I was impressed that the economists, particularly with the EPA,

were doing everything they could to put the biological information

that I provided them in the form that MBTOC wanted to review,

and that they then took this form forward and at least to my thinking, we were pretty roundly rejected.

I attended the next round of instructions on how to fill out the

CUE the next year, and they admitted that we hadn’t gotten everything we asked for, but they figured they knew how MBTOC would

receive the next proposal, and that things would go a lot better.

But the reason that didn’t happen is I think why we are here

today.

An economic assessment of methyl bromide by NAPIAP in 1993

estimated that the value to forestry nurseries was the greatest of

any significant user, at about $109 per pound of methyl bromide

used. I have made similar estimates by projecting the present values for seedlings of different grades from actual data in treated and

non-treated plots, based on size distributions. Although the figures

in the 2004 nominations seemed to us to be minimal, I came to believe that we were past misunderstandings with MBTOC, and that

the figures would pass essentially as taken forward. It didn’t happen.

I have spent about 50 percent of my research effort on evaluating

fumigants over the last 10 years. And in the last 3 years, with

other members of the nursery co-op, I have probably spent about

10 percent of my time in filling out CUEs and in providing other

data requirements. Given the amount of time that I have put in

and occasional times when I thought I understood what was going

on, it is amazing to me that I have very little idea of what I may

have accomplished, if anything.

When methyl bromide was added to the Montreal Protocol, it was

to be a scientific assessment of its role in ozone depletion. Data

gathering went on for a couple of years, and then a number just

seems to have been assigned. It seems that the methyl bromide allotted at the end of the CUE process is also going to be independent of data. But rather, will be arrived at from a number that is

already known and working backwards. It would help us a lot if

the CUE process worked as intended and if it can’t work as intended, it would help a lot if we just knew what that number was

so we wouldn’t spend so much effort in producing data and in producing CUEs.

It may, as the saying goes, take an act of Congress. I think it

would be really great if this committee had a scheduled meeting to

receive our representation to the next CUE allocation on its return

from its next meeting.

And that is all I have for the committee. Thank you very much.

28

[The prepared statement of Mr. Carey appears at the conclusion

of the hearing.]

Mr. LUCAS. Thank you, sir. Independent of data, that is not quite

defined as a scientific method to do anything. Independent of data.

The one common theme that comes clearly from this panel is it appears that process that we have been involved in for now 20-some

years by treaty could best be described as a system by which the

real decisions are made in secret meetings. I think you kind of

hinted at that. By which the rules are never endingly changing as

the process proceeds through, and it appears we pay for a lion’s

share of the process of doing this wonderful technique. Most fascinating.

For those of you who have participated or been near the hearing

process, could you answer me a couple of questions?

One, how have the U.S. delegations been received? What kind

have treatment have they received from the rest of the groups at

these meetings, No. 1.

And No. 2, let us expand for just a little bit more on the point

made by Mr. Wasson about the additional 10 years that ‘‘developing countries’’ have to use these resources.

And in no particular order, first question about received, the second question about the impact that this developing countries language has on your industries.

Ms. FREEMAN. I am happy to speak, specifically to the first one,

and I think that it should be worth noting that everyone at this

table has a pretty healthy relationship, both with the folks at EPA

and USDA and the State Department. We have a lot of respect for

those people who put a lot of effort and time into a very small part

of a very big treaty that means a lot to people. And because of their

professionalism and because they have to live to fight another day,

I think there are certainly things that they can’t publicly say to

this committee that, quite frankly, I feel very comfortable saying

on their behal. Or at least, my observations.

Their treatment at these meetings, though I am sure publicly respectful—and the treatment of the delegation in general and the

treatment of the United States in general on most issues that I

have observed in this process has been at the very least—I guess

the only thing I can think of it is insulting. We bring good information, we bring our best efforts, our best experts. They get up early

and they stay up late, and they do whatever hoops they are asked

to go through. And they maintain a level of optimism that most of

us find hard to maintain. And hope to have good news, and they

come back at the end of the day usually and have to bear us bad

news, sometimes worse than even we expected the worst case scenario to be.

And as far as the United States user groups, non-governmental

groups that go to attend and try to observe as much as possible,

and the people that we represent, our preception within the general community of the folks that usually operate in the terms of the

protocol. It is sort of its own little body that does its own thing on

a regular basis.

To say that we are not well-received and to say that there is contempt for our presence there, and probably some of that is brought

upon our delegation would probably be an understatement.

29

Mr. LUCAS. And the effect of the 10-year language on developing

countries when it comes to competition? And I believe that you said

that you didn’t have any allocation in your industry this last time?

Ms. CASTELLANO. Our allocation for 2006 was in the 10 percent

that is going to be reevaluated now at the summer meetings. So

when you discuss that cut, the entire cut flower industry’s allocation was in that amount. And I will refer back to that.

The developing countries, I mean, I referred to it a little bit in

my opening statement. In California, and especially in Southern

California, we are very concerned with watching our crops disappear south of the border, and with the competition from China,

as Mr. Wasson indicated earlier. If we have a need for methyl bromide to create our crop and we don’t get our allocation, we can’t

create that crop. And of course, it is going to go 45 minutes over

the border for me to where labor is cheaper, where they have no

restrictions, and that is going to take place.

To refer to another question that I believe Representative Holden

asked earlier, are other countries getting the allocations where we

are not? As I stated, our application was rated as unable to assess,

and we don’t really know what that means, since MBTOC hasn’t

really come back and told us how they have made their determination. We do know that other countries with cut flower applications,

such as Italy and Israel, who do not have as sophisticated research

going on as we do, did get an allocation. So again, we don’t know

how that played out, but we do know that our application and our

research is much more sophisticated. We got no allocation. Other

countries did, indeed, get an allocation.

So that answers your question, at least from my industry’s point

of view.

Thank you.

Mr. WASSON. Mr. Chairman, I mentioned that in China, in particular, these aren’t necessarily just small farmers that are expanding their agriculture. In many cases, they are in partnerships with

multi-nationals and they are able to go to a country that has more

favorable rules and regulations and operate competitively. And we

don’t think about them having a direct impact, but when they can

send quick frozen fruits and vegetables into the United States at

substantially lower prices because they don’t go by the same rules

we do, and when they get all these other advantages, it is of particular concern.

In particular, let me go back to before we got into this treaty.

Their production, their acreage that they had in strawberry production, was about half what we have in the State of California. Now,

they have over 10 times the acreage that we have. They have been

growing in the face of it, and they have been showing, from what

we understand, no indication of getting aggressively into these

other sorts of alternatives. Although they are using some, they also

are very, very committed to long-term use of methyl bromide. So

they have a very damaging impact to us, and not just to our product, but others as well.

Mr. LUCAS. Thank you.

Mr. Holden.

Mr. HOLDEN. Thank you, Mr. Chairman.

30

Mr. Bair, in follow up to the question I asked Mr. Smith in the

last committee about alternatives to methyl bromide, the Brown

family, who operate a flour mill in Fleetwood, PA, tell my staff that

they know of no alternative. And I believe you mentioned that in

your testimony.

Is there an alternative that is viable, affordable that meets Federal requirements?

Mr. BAIR. Thank you, Mr. Holden. Congress has appropriated about $150 million for USDA to conduct alternatives research over the last 6 or 7 years. There has

been very little that has come of that. I am not aware of any new

pesticides that have been registered. There is sulfuryl fluoride,

which already existed for termite uses and so forth. And it is not

my objective to badmouth any alternatives because as prudent

managers, we should be planning for a day when methyl bromide

is not going to be available any longer. And we are doing that.

We don’t want to say any bad things about alternatives. We don’t

want to see potential alternatives go away, but the short answer

to your question is that today there are no alternatives. I would

comment on the written testimony that you received from Dow

AgroSciences where they claimed that they could replace 40 percent of the fumigations in the industry this year. And that is simply, I think, not true. They did 8 percent of the fumigations last

year, according to their math. Forty fumigations in our industry results in about 8 percent of the fumigations. How they would get to

40 or 50 percent, I really don’t know. On a day like today when

it is cold, you simply couldn’t use sulfuryl fluoride to fumigate the

F.M. Brown’s Mill in Fleetwood, Pennsylvania.

High heat, other kinds of treatments we are experimenting with,

but they either aren’t technically feasible or they are not economically feasible. Our industry is one that has, over the last couple of

years, permanently closed 10 percent of our industry capacity. And

that is a huge economic adjustment. That has been a huge rationalization of our industry, and the pressure on margins is intense, and

the costs of most of the alternatives is about four times what a

methyl bromide fumigation is.

To fumigate that mill, for example, would probably cost between

$5,000 and $10,000 for methyl bromide fumigation. For the alternatives, it is going to be closer to $40,000. And that is if the weather were warm enough that would allow you to even use it.

Thank you.

Mr. HOLDEN. Mr. Wasson, in your written testimony, you mentioned that the parties to the protocol should shift their focus from

reducing the use of methyl bromide to managing the emissions.

What tools and incentives would growers need to better manage

emissions?

Mr. WASSON. Well, a couple of things. I mean, I think that in

that process, we are talking about technologies that would also

allow them to use less material. I mean, there actually could be an

economic advantage if we were able to manage the emissions and

use application systems that kept those under control.

We are working right now with growers that are learning how

to manage the air emissions in their areas, and we are working

with county commissioners to keep track of ambient air levels to

31

be sure that they are beneath safe levels and very safely into safe

levels. And so I think that if we could start moving in that direction, if we could start having even more experimentation, if we

thought that we could use different types of mulch, different kinds

of application systems, that would, then, allow us to use a certain

amount of methyl bromide for some time into the future, almost

sort of a prescription sort of use when you ran into problems with

the alternatives.

But the growers are very interested in seeing this go to these

kind of approaches.

Mr. HOLDEN. Thank you.

Mr. LUCAS. The Chair turns to the gentleman from Michigan.

Mr. SCHWARZ. Mr. Chairman, it is kind of difficult to parachute

back into these meetings when you are talking about some of these

chemical applications. And so getting in in the middle of conversation is a little difficult. However, you were talking about one of the

things that I would like to emphasize to my folks back home, and

emphasize to the individuals who want you to find an alternative

yesterday.

And that is this. This is methyl bromide. This is a really simple

compound, and it is in an era when the simple, effective compounds

are the exception and not the rule. And I understood as I just

walked back in the room here that methyl bromide, as compared

to the alternatives that are out there, and the alternatives that are

being—is voiced too strong a word? Probably not. Voiced upon you.

Methyl bromide is significantly less expensive, and the alternatives

and using the alternatives really threatened the business viability

of some of you and your operations, and some of those crops. Is

that correct? And anybody can pick that up. So if I go out and say,

look, it is ridiculous to so strictly keep methyl bromide off the market. And one of the advantages it has is its price. It is a huge advantage and it allows certain horticulture operations, agricultural

operations to stay in business. Is that a fair statement?

Mr. BOTTS. Congressman, I would like to take stab at answering

that, because we had tracked some of the prices associated with

methyl bromide since 1993, when it was first listed as an ozonedepleting substance. And just to give general numbers, because I

don’t have the specific tables in front of me. It went from 84 cents

a pound at that point to where it was almost $3 a pound last year.

Are we at the margin of where you reach economic efficiency

with methyl bromide? In certain marginal applications, there is

places methyl bromide is probably right at the end of its economic

viability if it was put under the same type of scrutiny for economic

viability that is being looked at at the international community.

Having said that, the alternatives that we are looking at out there,

when you combine technically feasible and economically feasible,

there is research generated out there by USDA and others that you

could probably make the alternatives that they have identified

work as technically feasible replacements to methyl bromide alternatives. Every single one of those represents significant changes to

production practices, either adding additional drip tape so that you

get even distribution under our circumstances in Florida, changing

the bed widths, changing your whole production scenario and

planting process so the pure price of the individual products is not

32

truly what is driving the issue. But you are at a point now where

we are looking at a situation where there would be decisions at the

grower level under current circumstances about whether to go forward at all, even with the alternatives on methyl bromide, if the

price of methyl bromide got much more than what it is right now.

I would like to answer one question or bring up a point——

Mr. SCHWARZ. Let me ask another quick one before you answer,

if I may. What is the breakdown product of methyl bromide, just

methane gas and some sort of inorganic bromine compound, inorganic bromide of some kind?

Mr. BOTTS. I am not sure.

Mr. SCHWARZ. Is there anyone there that can answer that question?

Mr. CAREY. It is methyl bromide.

Ms. FREEMAN. Yes.

Mr. SCHWARZ. Pardon?

Mr. CAREY. It doesn’t break down.

Mr. SCHWARZ. It does not break down at all?

Mr. CAREY. When it leaves the soil, it leaves the soil as methyl

bromide. It leaves the soil the same way it goes in.

Mr. SCHWARZ. OK. So it doesn’t break down into methane and

another brominated compound? And it goes into the groundwater

as methyl bromide?

Mr. CAREY. Well, I don’t think it goes into the groundwater at

all.

Mr. WASSON. I think you raised an important issue, because all

of these compounds have issues.

Mr. SCHWARZ. Well, that is where I was going next. In looking

at what some of these other compounds are, it would seem to me

that some of the detritus they leave behind is an awful lot more

dangerous than methyl bromide. And some of these, I believe,

would leave some of the dioxin compounds behind in their manufacture.

Mr. WASSON. Well, I think that is where the disconnect is, that

you have an international treaty that is saying, we are just focused

on methyl bromide, so just switch to anything other than methyl

bromide.

But you get down to the county and the township levels where

we work, and there are people that would say, we would prefer,

even from a safety standpoint, that you continue to use methyl bromide. We have county commissioners that if they were going to

rank the compounds that can be used to fumigate the soils, some

of them would say that methyl bromide is the safest, we feel, the

easiest to work with.

Some of the compounds that are alternatives were banned in

California, and they now can be used at certain limited levels. They

were banned because of concerns with groundwater, and that they

were identified as a carcinogen if improperly handled. And yet, if

you tried to bring that up at the international level, they say well,

that is not our problem. We are dealing with methyl bromide. We

are dealing with the ozone layer. But if you go to a neighborhood

that has got a farming operation, right next to a farming operation,

they say I don’t care about the international group. Maybe I want

33

to understand these compounds that you are going to be using alternatively.

And there are issues. They are good products, but all of them

have to be respected. All of them have other offsetting issues, and

the Congressman is exactly right, I think, for bringing up that discrepancy.

Mr. SCHWARZ. Thank you, sir. Well said, far better than I could

have.

Mr. BAIR. Mr. Chairman, since my use is different than his, I

would like to dovetail on that. But Mr. Schwarz, I would say that

in your district, you have a very fine company, the Jiffy Mix Company.

Mr. SCHWARZ. Michigan, you bet. Also the home of——

Mr. BAIR. And they manufacture a lot of mix products. Well, for

example, in our case, the alternative that is being touted and about

which you have received written testimony, is not approved for use

on things like sugar, shortening, salt, any kind of spices. So while

it might be able to be used in just the flour mill, it would not be

able to be used in Chelsea Milling, for example, because they have

got all these other ingredients, and the label for this product

doesn’t allow its use on any of those other food substances, enrichment or any kind of ingredients. It also is not approved in California, which is the second largest milling State in the country, and

it also has very few international tolerances, so for anybody that

wanted to export products, any residues of this alternative would

render that food illegal.

Mr. SCHWARZ. Thank you, sir.

Mr. LUCAS. The gentleman’s time is expired. We turn to the gentleman from California.

Mr. COSTA. Thank you very much, Mr. Chairman.

In listening to the testimony from the various witnesses, I sense

the level of frustration, and I want you to know it is obviously

shared by members of the committee here. Mr. Wasson and Ms.

Castellano knows of my involvement for some 15 years in California, in which from a standpoint of health and safety in terms of

risk assessment and risk management, we have in some cases actually exceeded Federal standards and made it more difficult there

for producers to use various applications.

I guess what I would like to ask, hearing the testimony and the

frustration involved in the various CUE process that has taken

place recently. What do you believe that this committee could do

to try to have a positive impact in what has been a very difficult

process in which we see that process being arbitrary, in my view,

and capricious in terms of how the negotiations have impacted our

ability to compete and use the application of methyl bromide? What

do you think this committee can do in terms of its influence towards the EPA or the State Department, notwithstanding the comments that you have made that these people are trying to do the

best that they can. And I believe that. But the fact is, is that short

of walking away from this treaty, where do we let the international

community understand that we believe we are getting gamed in

this process, for lack of a better term?

Who would like to comment on that?

Mr. BAIR. Congressman Costa, I will take a shot at it.

34

There is legislation before the Congress. It was in the last session and we believe that there will be legislation introduced very

soon, if it hasn’t been already, that would essentially approve the

U.S. critical use nomination without having to go through the

international review. Despite some of the negatives things that we

have said about how we have taken cuts from EPA, they are our

ally in this. We depend on them to take these nominations forward

and defend us. And they spend hundreds of hours and many thousands of dollars and dedicate a lot of staff resources into analyzing

and reviewing all of our applications. But then it goes to this international body and people who aren’t accountable to U.S. taxpayers

make decisions that affect billions of dollars of commerce in the

United States. And our view is that that is forfeiting our sovereignty to people who aren’t accountable to us.

So we would like to see the U.S. nominations——

Mr. COSTA. You have cleared these decisions in an arbitrary

way?

Mr. BAIR. We believe so. In my own example of our application,

even though it gets cut every time, in all my years of working on

this, I have never once received a phone call, a letter, an e-mail,

a request to come visit a grain mill in the United States, to give

us an opportunity to defend our application. Nobody has ever said,

we question this number. Tell us how you arrived at it. We’d be

happy to do that. We happen to have a lot of confidence in the application. We would love for them to come and tour a U.S. grain

mill and see the unique circumstances that we have. That has

never once had that kind of a request.

Mr. COSTA. Ms. Castellano, in contacts of the international market where the fresh cut flower industry participates, can you determine if your competitors are getting their methyl bromide requests

in?

Ms. CASTELLANO. In looking at countries such as Italy, France,

Israel, Spain, those were other applications that came in with cut

flower requests, and they did indeed get an allocation for 2006, the

same year that we were considered ‘‘unable to assess’’.

So I guess the short answer to your question is yes, they did get

an allocation whereas we got none.

Mr. COSTA. Mr. Wasson.

Mr. WASSON. To your question of what can Congress do, I think

that we have had a good team. We have had a good relation with

the State Department, the EPA, the USDA. I think that Congress

needs to reinforce that they can take strong stances. That they

don’t have to cave in to some sort of arbitrary pressures coming

from the international community that has an expectation of almost like what has been said on the floor of like 20 percent a year.

What does that have to do with what the reality is and the commodities that we are producing here in the United States? And I

think to the extent that you have reinforced that, they can take a

strong stand, and they can leave without agreement. And that has

happened before, and it happened at the meeting in Nairobi. That

we couldn’t reach agreement, and our people walked away. They

should be applauded for that, and they may have to do it again.

Mr. COSTA. Thank you.

Mr. LUCAS. The gentleman from Kansas.

35

Mr. MORAN. Mr. Chairman, thank you.

I think since I have arrived in Congress this has been a topic of

conversation, discussion, and hearings. The status of where we are

today, as compared to where we were now 9, 10 years ago, and

then second, Ms. Freeman’s commentary about we are treated at

negotiations, what makes the United States unique? Why is this so

important of an issue to us and our industries? Is it because of the

magnitude of what we produce, the variety of products, the alternatives? Why is the United States singled out that this is such a

critical issue for us?

Ms. FREEMAN. In very general terms, the United States does put

in the largest nomination among all the other countries. It is probably also worth noting for a host of reasons for why methyl bromide is so important to the people who don’t have alternatives.

Even those countries that may be competing with us not using

methyl bromide typically are developing nations that, for example,

they don’t have the labor laws that put restrictions on hand weeding, and they can afford to pay as many people as it takes to go

out and hand weed. And so some of the competitive advantages, or

just the competitiveness that methyl bromide brings to the table

with countries that still have access to it, and with those that

don’t, it is one of the key factors for why methyl bromide is important to our competitiveness.

It is also worth noting that there are countries out there who are

somewhat similarly situated to ourselves, developed nations, unfortunately, some of those folks happen to be in the EU, and they also

have been sincerely cut. Unfortunately, their counterparts in the

EU have not been supportive of helping them get what they need.

So their voices have somewhat been muffled. So it seems like it is

just the United States standing there, sort of crying or whining,

and it makes it very easy, I guess, for those who may see an advantage, economic or political, to maybe come after us for maybe this

reason or reasons not related to the Montreal Protocol at all.

Mr. MORAN. Excuse me for interrupting my own question, but is

our concern with the process, or do we have complaints with our

own Government officials and the role that they are playing in advocating on behalf of your interests?

Ms. FREEMAN. I think my observation would be that it certainly

is most generally with the process. That in earnest, it certainly

hasn’t been every meeting we have ever had here in D.C. about

this has always gone out and everybody has agreed. But it has

been a respectful disagreement, and we have worked through it.

The actual breakdown in the process most definitely has occurred

at the international level.

Mr. BOTTS. I would like to build on that just a little bit, having

been to several of the open-ended working group meetings and

meetings of the parties. It appears when these issues come up—

and part of it is because the U.S. nomination is the largest nomination of all the countries that are submitted in total pounds of methyl bromide. But the way the meetings are structured in such a

manner of building consensus, and the term consensus used in an

international level is different than consensus that I have ever

been exposed to in this country.

36

But the way the process has been pushed, especially on the critical use nominations, is it goes all the way down to the last minute

possible that a decision can be made. And essentially, everybody is

pushed into a corner and then politically, it is if they come out with

a no decision, you are trying to somehow disrupt the Montreal Protocol.

So our Government, in the negotiations, has been as strong as

they possibly can be, and have been extremely supportive of this

process. There are other governments and other consortiums of

countries out there that seem to be more willing to play the system

and push it to the brink, and yet, they never get credit for doing

that. It is always the U.S. that is portrayed as being the obstruction in this process. We have come to these meetings with the criteria and information that meets their definition of what is needed

to be done, and then somehow we are painted as being the bad guy

in this whole process throughout the negotiations.

And a point to somebody’s question relative to the developing nations’ issues there, the last several meetings, most of the discussions surrounding methyl bromide in the public forum have been

related to ensure how the developing nations can maintain their

use of methyl bromide even past the 10-year exemption, because of

the very same reasons that we are looking for critical use exemptions here. They would like to see the U.S. exemptions reduced, because it gives them access to the U.S. market with production of

a tool, and that is primarily in the Latin American countries and

the Caribbean countries that have been pushing the hardest to

maintain their ability to use methyl bromide, and they want the

U.S. market handed to them on a platter by our inability to remain

competitive if we lose methyl bromide.

Mr. MORAN. Mr. Chairman, thank you.

Mr. LUCAS. Thank you. And thank you, panel, for your insights

that you provided, and that last particular answer, which probably

fits the traditional political axiom that nothing ever happens by accident in the process.

Without objection, the record of today’s hearing will remain open

for 10 days to receive additional materials and supplemental written responses from witnesses to any question posed by a member

of the panel.

This hearing of the Subcommittee on Conservation, Credit, Rural

Development, and Research is adjourned.

[Whereupon, at 12:20 p.m., the subcommittee was adjourned.]

[Material submitted for inclusion in the record follows:]

STATEMENT OF CLAUDIA MCMURRAY

Mr. Chairman, members of the subcommittee, thank you for the opportunity to

deliver this methyl bromide statement on behalf of three Federal agencies—the Department of State, the Department of Agriculture, and the Environmental Protection Agency. We realize that methyl bromide, and its phase out under the Clean

Air Act and Montreal Protocol are issues of great importance to many of you and

your constituents. While the focus of your hearing is on methyl bromide, I would

like to begin by providing a brief overview of our ongoing efforts to protect the ozone

layer under the Clean Air Act (CAA) and the Montreal Protocol.

Since the Montreal Protocol’s inception in 1987, the United States has exerted

strong global leadership in making the transition away from ozone-depleting substances and toward the development of new technologies that are safe for the ozone

layer. The United States continues not only to meet all of its obligations under the

37

Montreal Protocol, but, in fact, has already phased out the consumption of nearly

97 percent of all ozone-depleting substances controlled by the Montreal Protocol. Because of the U.S. Government’s commitment and our innovative domestic industries,

the world is well on its way to seeing the recovery of the stratospheric ozone layer.

A major goal of both the Montreal Protocol and the Clean Air Act is to protect

public health from harmful UV radiation. We are clearly moving in the right direction. In fact, the legislative evaluation required by the Clean Air Act’s section 812

estimated that full implementation of the Montreal Protocol will save 6.3 million

U.S. lives from skin cancer between 1990 and 2165. And, we are working with

groups like the American Academy of Dermatology and the National Council for

Skin Cancer Prevention in education programs like SunWise Schools to further reduce risks of skin cancer, especially for kids. The Cancer Research and Prevention

Foundation’s Congressional Families Action for Cancer Awareness recognized the

importance of EPA’s sun safety programs in 2003. Because skin cancer, a preventable disease, kills one American every hour, it is the government’s obligation to both

provide the public with information to mitigate the impacts of sun exposure and

control the chemicals that damage the stratospheric ozone layer.

Our great successes do not mean that our task is done. In fact, the 2002 Scientific

Assessment of Ozone Depletion, a comprehensive overview of the state of the ozone

layer involving the work of hundreds of atmospheric scientists, life scientists, and

researchers worldwide, with significant U.S. participation, found that the ozone

layer is susceptible to damage because stratospheric concentrations of ozone-depleting chlorine is at or near its peak, while bromine, although still increasing, may

peak over the next several years. In addition, seasonal damage to the ozone layer

resulting in the ‘‘ozone hole’’ in the Antarctic continues; in the 2003 season the hole

reached its second largest extent, covering an area roughly the size of North America. Ultimate recovery of the ozone layer—and the consolidation of all the gains

made so far—depends on our will, and that of the global community of Parties to

the Montreal Protocol, to finish the job.

Staying the course matters to public health and to the ozone layer, but it also

matters to the many businesses who took the risk of investing heavily in alternatives that do not damage the ozone layer. This substantial financial commitment

by companies has generated an estimated $10 billion dollar business in trade with

ozone-safe American products and technologies that could be at risk if the United

States were to take action inconsistent with its commitments under the Montreal

Protocol. For all of these reasons, this Administration remains committed to finishing the job of restoring and protecting the ozone layer, which was started by President Ronald Reagan.

That brings us to the topic of today’s hearing, methyl bromide. We know a number of things about this chemical. First, it is a widely used biocide that is highly

effective in killing pests that are of concern to agricultural interests in the United

States and many other countries. Second, the United States has been the world’s

largest producer and consumer of this substance. Third, methyl bromide has been

in wide use in the United States for decades, and users find it efficacious and are

using it efficiently. Fourth, while there are alternatives available today for many

uses in many situations, there is no alternative that can operate as effectively as

methyl bromide in all the crop situations where methyl bromide is used.

A brief history is necessary to understand methyl bromide’s current regulatory

status under the Clean Air Act. The 1990 Clean Air Act required EPA to phase out

the production and import of any newly identified substance with a significant potential to damage the ozone layer within seven years of listing the substance, without exceptions or exemptions. In 1991, the EPA received a petition to list methyl

bromide and promulgated a rule which established a U.S. phase out date of 2001.

In an effort to address both the environmental concern and an agricultural concern

that a unilateral U.S. phase out in 2001 would put the United States at a disadvantage relative to other developed nations that are agricultural competitors of the

U.S., successive U.S. delegations to the Montreal Protocol pushed the global community to adopt the U.S. phase out date of 2001. In 1997, the United States succeeded

in moving developed countries from their initial agreement to simply freeze production and import at historic levels to a phase out of methyl bromide in 2005, with

exemptions and interim reductions in 1999, 2001, and 2003. Given that progress,

and the desirability of ensuring harmonized requirements, Congress moved to

amend the CAA in 1998 to conform the U.S. phase out schedule with that faced by

other developed country Parties to the Montreal Protocol, resulting in the phase out

schedule we have today. This schedule called for a freeze in methyl bromide production and consumption for developed countries in 1995, a 25 percent reduction by

1999, a 50 percent reduction by 2001, a 70 percent reduction by 2003, and a full

phase out by 2005, subject to certain exemptions.

38

Users have made and are continuing to make progress in reducing the use of

methyl bromide, in fulfillment of our obligations under the Montreal Protocol, by

using newly approved substitutes and implementing innovative new technologies

and practices. Under the U.S. Department of Agriculture’s (USDA) Methyl Bromide

Alternatives Program (Methyl Bromide Alternatives at http://www.nps.ars.usda.gov),

agricultural and forestry leaders from private industry, academia, state, and Federal agencies have come together to develop viable alternatives to methyl bromide.

This research program has taken into account input from Federal agencies as well

as extensive private sector research and trial demonstrations of alternatives to assess the problem, formulate priorities, and implement state-of-the-art research.

From 1993 through 2004, the USDA Agricultural Research Service has spent ap- proximately $172 million in an aggressive research program to find alternatives to

methyl bromide. Through the Cooperative State Research, Education, and Extension

Service, USDA has provided an additional $19.7 million since 1993 to state universities for methyl bromide replacement research and education. These federally supported research activities are in addition to extensive private sector efforts.

Nearly 80 percent of pre-plant methyl bromide soil fumigation use is in a limited

number of crops. Much of the Federal Government’s pre-plant effort has focused on

strawberries, tomatoes, ornamentals, peppers, and nursery crops, (forest, ornamental, strawberry, pepper, tree, and vine), with special emphasis on tomatoes in Florida and strawberries in California as model crops. Methyl bromide users have contributed field plots, plant material, and equipment for research trials on potential

alternatives.

At the same time, innovative U.S. technologies and practices allow our growers

to make the methyl bromide we do use go as far as possible toward controlling key

pests. The reductions in U.S. consumption over the past few years have been successfully accomplished in part because manufacturers and users have found that it

is possible to dilute methyl bromide with other pest-control compounds, like

chloropicrin, use barrier films, and lower rates of methyl bromide and still obtain

effective pest control.

Another important area of emphasis is our responsibility to help identify, register,

and implement safe and effective alternatives. Understanding the importance of this

in the phase out of methyl bromide, EPA has since 1997 made the registration of

alternatives to methyl bromide its highest registration priority. Even under the new

‘‘fee-for-service’’ system, EPA is committed to giving methyl bromide alternatives

priority. As one incentive for the pesticide industry to develop alternatives to methyl

bromide, EPA has worked to reduce the burden of data generation to the extent feasible while still ensuring that the Agency’s registration decisions meet Federal safety standards. Where appropriate from a scientific standpoint, EPA has refined the

data requirements for a given pesticide application, thus facilitating the research

and development process for methyl bromide alternatives. Furthermore, EPA scientists routinely meet with prospective methyl bromide alternative applicants, counseling them through the pre-registration process to increase the probability that the

data are collected and submitted correctly for the first time, thus minimizing delays.

Our efforts have paid off in some areas. Since 1997, EPA has registered a number

of chemical/use combinations as part of its commitment to expedite the review of

methyl bromide alternatives. While there is no silver bullet among them, they are

nonetheless an important part of our overall methyl bromide strategy. They include:

• 2000: Phosphine to control insects in stored commodities;

• 2001: Indian Meal Moth Granulosis Virus to control Indian meal moth in stored

grains

• 2001: Terrazole to control pathogens in tobacco float beds

• 2001: Telone applied through drip irrigation—all crops

• 2002: Halosulfuron-methyl to control weeds in melons and tomatoes

• 2003: Trifloxysulfuron sodium as an herbicide for tomato transplants in Florida

and Georgia

• 2004: Fosthiazate as a pre-plant nematocide for tomatoes

• 2004: Sulfuryl fluoride as a post-harvest fumigant for stored commodities

In addition, EPA is currently reviewing several applications for registration as

methyl bromide alternatives, including iodomethane as a pre-plant soil fumigant for

various crops, and dazomet as a pre-plant soil fumigant for strawberries and tomatoes. While these activities are promising, environmental and health issues with alternatives must be carefully considered to ensure we are not just trading one environmental problem for another. As required by Federal pesticide laws, including the

Food Quality Protection Act, EPA is currently conducting tolerance reassessment

and reregistration of methyl bromide to ensure that its registered uses meet today’s

health and safety standards. To facilitate this review, EPA expects to release the

39

preliminary risk assessment for methyl bromide and other soil fumigants this May

for public review and comment. Because soil fumigants are used in similar ways and

present potential risks from similar paths of exposure, it makes sense to review the

fumigants together rather than on separate time schedules. This process will assure

a balanced, comprehensive and transparent evaluation of the risks and benefits of

all fumigation options.

While we continue our domestic programs to facilitate the phase out of methyl

bromide, the Parties to the Montreal Protocol recognized that widespread use and

the difficulty of finding feasible alternatives to methyl bromide made its phase out

more difficult than other chemicals controlled in the past under the Montreal Protocol. Accordingly, the Parties to the Montreal Protocol created three types of exemptions for methyl bromide.

First, the Parties recognized that methyl bromide is vitally needed in trade to ensure that shipments do not contain harmful and invasive pests that could be transported with commodities and introduced into new areas. Thus, they provided an exemption for quarantine and preshipment uses. As a consequence, while countries

have committed to find alternatives and to limit the emissions and use of methyl

bromide to those applications where its use is necessary, the production and import

for these uses can continue during and after the phase out. On January 2, 2003,

EPA published the Final Rule fully activating this exemption.

The second methyl bromide exemption, covering emergency situations, is an exemption from the phase out for the production or import of 20 metric tons of methyl

bromide per event. This exemption can be activated by a Party to address what it

considers to be an emergency. The real possibility of emergency needs that cannot

be anticipated, like anthrax contamination, makes it especially vital for countries

to have the flexibility to make methyl bromide rapidly available for such needs.

Third, the Parties created the critical use exemption (CUE), which is in some

ways similar to the other safety valve available under the Montreal Protocol for

CFCs, the essential use exemption. The Protocol’s criteria allow any developed country that is a Party to the Protocol to seek an exemption from the phase out if it

determines that the absence of methyl bromide would cause a significant market

disruption. The Parties must agree that the nominating Party has demonstrated

that there are no technically and economically feasible alternatives for the use in

the context of the application and that the Party continues to make efforts to find

alternatives for the use and to limit emissions. I want to focus on this exemption

today.

The United States was one of 17 countries that have submitted nominations for

critical use exemption. Some national requests were very small, covering only one

use, and some were large, covering 10 or more uses. The amount of methyl bromide

nominated by the United States for these uses was 9,920,965 kilograms for 2005,

9,722,546 kilograms for 2006, and 7,398,900 kilograms for 2007—this translates into

39 percent, 37 percent, and 29 percent respectively of our 1991 baseline level for

methyl bromide uses.

Each of these annual nominations was developed through a rigorous technical

process involving the careful efforts of many technical experts. For the most recent

2007 nomination, for example, EPA’s Office of Pesticide Programs, with collaboration from the USDA, worked intensively with growers to fully understand genuine

critical needs in various states and agricultural sectors. This allowed EPA’s and

USDA’s expert scientific and economic staff to develop technically supported estimates for U.S. critical needs for methyl bromide in 2007 which were then shared

with policymakers through an interagency process involving the State Department,

USDA, EPA, and the Council on Environmental Quality. Each year the technical

estimate has been lower than the previous year because parts of some sectors switch

to alternatives, some sectors drop out altogether if they do not need the exemption,

and because we obtain better information that allows us to more accurately estimate

the true need for methyl bromide.

The value of this careful and collaborative consensus-building process has been

demonstrated in our consistent success thus far with the Parties, who have approved the vast majority of each annual CUE request submitted by the U.S. so far.

Specifically, Parties to the Protocol approved more than 90 percent of our request

for 2005, amounting to slightly over 37 percent of baseline consumption. With respect to 2006, the Parties have approved the U.S. request to produce and import

a total of 27 percent of the 1991 baseline consumption of methyl bromide, or about

6,900 metric tons for 2006. In addition, the Parties granted interim approval for the

balance of the U.S. request for 2006, which represents almost 10 percent of the

baseline amount. Final decisions on this increment will be made at an Extraordinary Meeting of the Parties to be held July 1, 2005 in conjunction with the ProtoVerDate 11-SEP-98 13:51 Apr 27, 2005 Jkt 020658 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 F:\DOCS\109-3 HAGRI PsN: HAGRI
40

col’s annual preparatory meeting. Similar decisions were made for the 15 other

countries requesting CUEs for 2006.

It was clear at the meeting that the CUE process, involving literally hundreds of

individual crops and users in seventeen countries, presents an unusually difficult

challenge for the Methyl Bromide Technical Options Committee (MBTOC). With

strong support from the United States, the Parties took steps in 2004 to address

this challenge by adopting Decision XVI/4 to provide clear guidance to the MBTOC

in their review of CUE nominations. The United States welcomes these improvements and believes these new guidelines will ensure that MBTOC reviews fully consider the relevant technical and economic criteria contained in Montreal Protocol decisions and transparently describe the basis for their judgments. The revised guidelines also allow for more extensive and direct communication between the MBTOC

and the nominating Party, and will provide additional time after MBTOC makes a

recommendation for a Party to appeal the decision.

We also support the so-called multi-year approach which would provide benefits

in terms of time savings for the MBTOC and the Montreal Protocol Parties reviewing CUE nominations, as well as for the Parties that have to develop them. A multiyear approach would allow MBTOC to approve CUEs for several years at one time,

thus providing greater predictability for the user community. In November 2004, the

Parties agreed to elements related to multiple-year CUEs, and we are pleased that

this issue will continue to be discussed at future Meetings of the Parties.

Mr. Chairman, I hope my testimony demonstrates that the Administration takes

action on methyl bromide in a manner that protects public health, while still ensuring the critical needs of our farmers are met. The agreements reached on methyl

bromide at the recent Meetings of the Parties demonstrate the continued vitality of

the Montreal Protocol and the ability of the Parties to adapt to changing scientific

and technical information. Although we still have more work to do, we believe we

have fostered a greater understanding and appreciation of the technical and economic basis for the U.S. CUE request. The U.S. position at the Prague Meeting of

the Parties demonstrated the strong continued support for the Montreal Protocol as

well as our firm commitment to phase out methyl bromide once technically and economically feasible alternatives are available for our agriculture sector.

I thank you for this opportunity to testify before this Committee on behalf of the

Department of State, the Department of Agriculture and the Environmental Protection Agency. My colleagues and I would be pleased to answer any questions you may

have.

ANSWER TO SUBMITTED QUESTION

Secretary McMurray, you seem to be a little more positive than some of

the industry folks that a multi-year approach to the CUE process will happen. You indicated that the parties ‘‘agreed to elements related to multipleyear CUEs’’ at the Prague meeting. What is the status of moving to a multiyear approach?

At the Sixteenth Meeting of the Parties to the Montreal Protocol agreement was

reached on elements of a broad framework for deciding whether or not to approve

a critical use exemption for a duration of more than 1 year. Under that agreement,

any multi-year approach would take into account a number of factors, including

methyl bromide use patterns and the likelihood or improbability of alternatives

being developed. We expect to address these elements further at the Seventeenth

Meeting of the Parties to the Montreal Protocol to be held in Dakar, Senegal in December. We hope to make progress in achieving greater support for a multi-year exemption, but this task will be difficult given that a number of countries have expressed opposition to the concept.

STATEMENT OF JAMES A. BAIR

Thank you Mr. Chairman and members of the Subcommittee. I am Jim Bair, vice

president of the North American Millers’ Association. NAMA is the trade association

representing 48 companies that operate 170 wheat, oat and corn mills in 38 states.

Their collective production capacity exceeds 160 million pounds of product each day,

more than 95 percent of the total industry production.

I am also vice chairman of the Crop Protection Coalition.

41

BACKGROUND

In congressional hearings and briefings over the years, grain milling executives

have discussed with you how methyl bromide is used to meet government regulations, and consumers’ expectations, for clean and wholesome food.

They have testified that methyl bromide is easily the most technically and economically effective tool available to protect grain processing facilities and the food

produced in them against insect pests.

The CUE process. Mr. Chairman, the parties to the Montreal Protocol process possess an unhealthy passion for secrecy and undemocratic decision-making. That is irrational, unfair to U.S. farmers and food processors and does not resemble good policy-making as we know it here in the U.S. It begins with the selection of the meeting locations where the Montreal Protocol negotiations will occur.

For instance, the annual meeting of the parties in 2003 was held in Nairobi,

Kenya according to the U.S. State Department one of the most dangerous cities in

the world. A city so dangerous that the U.S. embassy evacuated its staff due to terrorist activities.

The 2004 meeting was scheduled for Thanksgiving week and the critical day of

negotiations was set for Thanksgiving Day. Mr. Chairman and members of the subcommittee, I do not think the U.S. government should agree to meetings that force

its citizens to choose between personal safety considerations and representing their

business interests; nor should they have to pick between spending the most American of holidays with family or representing their business interests.

Even when the meetings are held in a foreign location a U.S. citizen can reasonably attend, the substantive negotiations are held behind closed doors. I personally

have attempted to sit in on such sessions, not to participate but merely observe.

When I and other U.S. food and agriculture representatives are noticed, we are

kicked out of the room.

As if that were not enough, the U.S. is the largest financial supporters of the

Montreal Protocol activities. To pick just the three recent years (2003–05), the socalled Multilateral Fund of the Protocol is funded at $573 million. It is an outrage

that U.S. taxpayers provided about 25 percent of that money to fund activities that

threaten our economic well-being.

American agriculture is justifiably skeptical about fair treatment from the United

Nations. The CUE approval process is agenda-driven and highly politicized. Ultimately, the fate of the U.S. CUE applications that are recommended to the parties

of the Montreal Protocol are determined by a handful of individuals unaccountable

to U.S. taxpayers, behind closed doors.

Some of the U.S.’ critics in the Montreal Protocol negotiations are from countries

that have no significant agriculture or food processing industries and therefore have

never used much methyl bromide. So it’s easy for them to say it ought to be banned.

Others are from countries that are agricultural competitors of the U.S., and they

are unlikely to willingly surrender the competitive advantage that has been handed

to them.

Arbitrary cuts in our CUE. In multiple hearings of this and other Congressional

committees, we have described how, even in advance of the Montreal Protocol

phase-out, the industry dramatically cut its usage of methyl bromide to one-fourth

of the amount allowed by the EPA-approved label.

Further, the NAMA Critical Use Exemption (CUE) request has voluntarily reduced the requested amount each year.

Yet, we still meet with an antagonistic and, we believe, pervasive anti-United

States attitude in the meetings and decisions of the Montreal Protocol.

The Protocol parties cut the NAMA allocation by 10 percent in 2005, and recommended another 10 percent for 2006. I cannot say what the basis for those cuts

is, since I have never once been contacted by Protocol technical staff. Never once

have I been asked to justify a request nor given the opportunity to defend one. Not

one phone call, letter or email. Not one request to visit a U.S. grain mill to see first

hand the factors that make methyl bromide necessary.

The arbitrary cuts by the U.S. EPA and the further cuts by the Parties to the

Protocol penalize this industry for honest participation in the process. Some might

wonder, if arbitrary cuts are going to be made, why not ‘‘pad’’ our CUE request so

that we end up getting an amount closer to what we truly need. We have not done

that.

Changing rules in the middle of the gameIt is our view that rule changes implemented since Congress ratified the treaty have drastically changed the intent and

operation of the treaty.

42

Congress ratified the Montreal Protocol treaty with an understanding about the

details of the agreement. Yet, year after year, Montreal Protocol committees have

acted to change the rules, significantly altering the original intent of the treaty.

The focus of today’s hearing ‘‘Critical Use Exemptions’’ is an excellent case in

point. When the United States Congress ratified the Montreal Protocol Treaty, it

was with the understanding that there would be a stepped down phase-out. The

treaty architects foresaw that at the end of that phase-out period there would be

industries for which technically and economically feasible alternatives would not be

available. As we now know, they were prescient.

Those authors included language in the treaty that stated that for those industries, a critical use exemption (CUE) would be available.

Despite what some Protocol parties and activists now claim, the treaty did not say

the CUE’s were to merely provide an additional glide path beyond the phase-out

with the ultimate resolution being a complete elimination. That is not what the U.S.

negotiators agreed to nor what the U.S. Congress ratified.

If agriculture and food processing uses of methyl bromide are very harmful to the

environment, then it should be banned globally on the same date, and the sooner

the better. But banning methyl bromide in the U.S. while allowing our competitors

to continue using it merely shifts jobs and economic activity to those competitors

with no real gain to the environment. That is a false choice and the U.S. should

not be pressured to make that choice.

Declare victory over ozone-depleting substancesMr. Chairman and members of the

subcommittee, food and agricultural uses of methyl bromide are of little environmental significance since, according to the EPA website:

• Anthropogenic (man-made) methyl bromide has contributed a total of about 4

percent to ozone depletion over the past 20 years. Of this, about 2.5 percent can be

attributed to agricultural fumigation activities. • The MBTOC (United Nations Methyl Bromide Technical Options Committee)

recommendation to approve 35 percent of the U.S. 1991 baseline for a critical use

exemption represents about 0.4 percent of the ozone depleting potential from ALL

ozone depleting substances in ALL countries when the Montreal Protocol was first

negotiated in 1987. (emphasis added) • Further, the 35 percent figure represents only 1.5 percent of ozone depleting potential caused by all ozone depleting substances in 1989 in the United States

In short, the world is close to zero in its emissions of man-made methyl bromide;

so close that any additional incremental gains will be extraordinarily difficult to

achieve. The difficulty in achieving them will be vastly offset by the benefits to agriculture and food production. It is time to declare victory and stop this irrational pursuit of an unwarranted total elimination.

That concludes my testimony, Mr. Chairman. I would be happy to answer any

questions you or other committee members may have.

STATEMENT OF RODGER WASSON

The California Strawberry Commission was established under California law and

represents approximately 600 growers, shippers and processors of strawberries in

California. California produces 88 percent of the Nation’s strawberry fruit (approximately 1.6 billion pounds) with a farm-gate value of $1.2 billion.

The Commission recognizes that most of its members will need access to methyl

bromide until suitable alternatives are found. Much of the California strawberry industry is dependent on the use of a pre-plant soil fumigant to produce its crop. To

address this need, we have been a leader in research funding for the development

of alternative fumigants and have invested over $8 million of member funds in alternative research since 1992. As a result of this research, 35 percent of our industry’s acreage was treated with alternative fumigants in 2004 and growers continue

to make this transition. However, there are serious regulatory, technical and economic challenges that prevent a larger number of California’s strawberry growers

from using currently available alternatives. It is for these growers that we continue

to fund research into alternatives and pursue the continued long-term availability

of methyl bromide.

Current regulations in California force most growers to broadcast apply methyl

bromide, a method in which the entire field is treated instead of solely the planting

bed. However, for growers who have transitioned to alternative fumigants, a majority apply them by drip fumigation, a process where only the bed is treated. This

practice significantly reduces the cost of the treatment and helps to offset the increased weeding costs and reduced yields associated with using alternatives. HowVerDate 11-SEP-98 13:51 Apr 27, 2005 Jkt 020658 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 F:\DOCS\109-3 HAGRI PsN: HAGRI
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ever, for many California strawberry growers, there are numerous challenges restricting their transition to alternative fumigants. These challenges include: (1)

township caps that restrict the use of Telone (a component in a preferred alternative), (2) field topography and (3) a significant increase in production costs in the

northern production region when using drip fumigation.

(1) Telone township caps. The availability of 1,3-D in California is handled by a

Telone management plan. This is an agreement between California Department of

Pesticide Regulation (Cal DPR) and Dow Agro-Sciences where the annual use of 1,3-

D is limited to 90,250 lbs (1X) per year, per township (a township contains 36

square miles). There is a cap for Telone because 1,3-D is on California’s Proposition

65 list of chemicals that may cause cancer. To protect public health, Cal DPR is

managing the use of 1,3-D to ensure that cumulative lifetime exposure of the chemical remains below a certain level. This level is typically expressed as an average

daily dose spread over a 70-year (lifetime) exposure period. 1,3-D’s use in California

was banned for several years, and then restricted to 90,250 lbs per township per

year. Since 2002, Cal DPR has allowed an increased allocation up to 180,500 lbs.

(2X) and on a case by case basis up to 2.8X. Use above the 1X annual township cap

draws upon a ′′bank′′ of 1,3-D allocation that was available but not used in previous

years (the bank accumulation started in 1995).

In 2004, The 2X cap was reached in four townships where strawberry fruit growers have transitioned to alternative fumigants. In one of these townships, growers

were forced to use other fumigants on more than 500 acres despite having 2.8X the

cap of Telone available. In 2005, between 50 and 80 percent of the strawberry acreage in two California townships will not be able to use their total amount of allocated Telone due to the township cap. As more growers transition to alternative fumigants, the township cap regulations will increasingly prevent growers in most of

the production areas from fumigating with Telone. According to a study by Dr. Tom

Trout, USDA-ARS, Fresno, California, strawberry production will face the largest

impact from the Telone township cap, estimating that between 25–50 percent of the

State’s acreage will be affected by the cap.

(2) Field topography. Approximately 15 percent of California’s strawberry fields

are located on hillsides with slopes severe enough to make effective application of

fumigants by drip irrigation difficult or impossible. In their transition to alternatives, hillside growers will need to broadcast apply alternative fumigants like

Telone/chloropicrin or straight chloropicrin. This option is somewhat attractive because it fits into the current production practice of broadcast applying methyl bromide. However, neither alternative option provides sufficient savings on fumigation

costs to offset increased weeding costs and reduced productivity. Costs are not the

only hindrance growers face when their crews hand-weed in California. Because

hand-weeding is such a contentious issue in the state, growers must be prepared

to prove, upon state government request, their need to hand-weed.

Furthermore, County Agricultural Commissioners do not currently allow growers

to broadcast fumigate with straight chloropicrin in Monterey and Santa Cruz Counties (two counties that contain 38 percent of the State’s acreage) due to concerns

that this would result in increased public complaints (most fumigation complaints

are associated with chloropicrin). For broadcast applications of Telone, a main concern is the Telone township cap. However, broadcast applications use 30- 40 percent

more fumigant than when applied by drip.

3) Increased production costs in the northern production region. For the northern

strawberry production region, applying fumigants by drip results in significant increases in the cost of growing strawberry fruit. With drip applied fumigants, the entire field and irrigation system must be set up before the field can be fumigated.

This process requires an additional three to four weeks compared to the setup process for broadcast fumigation. This additional time causes problems for a majority

of the producers in the northern district. The strawberry production season is adjacent to the planting season of many vegetable crops, so strawberry production fields

are typically rotated with these crops (i.e. half the ranch is planted in strawberries

and the other half is rotated out with vegetables each year). A typical production

cycle for a field is strawberry (September 2004–November 2005) followed by two

vegetable crops (November 2005–September 2006), then back to strawberry (September 2006–November 2007). The need for an additional 3–4 weeks to prepare a

field for drip fumigation forces strawberry growers to take back the land from the

rotation vegetable growers 3–4 weeks earlier. Normally, two vegetable crops can be

produced between the strawberry rotations. However, by shortening the season 3–

4 weeks early, only one vegetable crop can be produced instead of two. Land sublease rates to vegetable growers are approximately $1,000 for one crop and $1,800

for two (the land typically leases for $2,200 for a full year). Therefore, strawberry

44

growers who switch to drip applied alternative fumigants lose $800 in rent due to

the loss of one of the two vegetable crops.

A second issue with the transition to drip applied fumigants in the north is the

need to setup the entire irrigation system before fumigation. Currently, growers

move most of their irrigation headers and other main line pipes over from the previous season’s crop to the new crop after the end of the season (in November/December/January). However, with drip applied fumigants growers must have two sets of

equipment, at an increased cost of approximately $500/acre.

The strawberry grower’s need for methyl bromide can be fulfilled, in the short

term, through the Critical Use Exemption (CUE) process if it is allowed to function

as it was designed. The United States Environmental Protection Agency (EPA) has

done an excellent job of understanding our industry’s continuing need for methyl

bromide and the difficulties faced in the transition to alternatives. Throughout the

Montreal Protocol process, the EPA submitted Critical Use Nominations (CUN’s) to

provide the industry with sufficient methyl bromide in the future so that strawberry

growers can meet their critical needs. The EPA has also created reasonable regulations for the allocation of this critical use methyl bromide in 2005.There are aspects

of the CUE process that need to be changed to allow continued availability of methyl

bromide while our industry develops more suitable alternatives.

First, The EPA understands how difficult it is to shift basic research to applied

principles, and that we need time to mitigate these hurdles. EPA dedicates considerable resources to evaluating industry recommendations prior to issuing its nomination to the Methyl Bromide Technical Options Committee (MBTOC). EPA’s nomination should prevail over MBTOC’s without further reduction by MBTOC.

Second, we ask the U.S. delegation and the Parties of the Montreal Protocol (Parties) to shift their focus from reducing the use of methyl bromide and other ozone

depleting substances to managing the emissions of these substances and allowing

for multi-year CUE’s. By changing the focus of the CUE process from reducing the

amount of methyl bromide used to managing emissions released, the strawberry industry could retain limited access to methyl bromide in the future. The EPA has

recognized that this would be possible with the development of new technologies and

innovative production practices that minimize emissions. Unfortunately, the current

CUE process does not reward an industry for innovations that reduce emissions.

Any process that growers might use to reduce the amount of methyl bromide needed

to fumigate a field leads to a direct reduction in the amount that will be approved

by MBTOC and the Parties in future CUE’s. Additionally, unless the process is

changed to focus on emission reduction, funding research into methods that may reduce emissions will be difficult. Emission management is the key to protecting the

ozone layer. Continued access to and use of methyl bromide in the future is not incompatible with reduced emissions.

Halon 1211, a product that has had its production phased out by the Montreal

Protocol, provides an example for emissions management. There are significant

stockpiles of Halon 1211 that are gradually being emitted into the atmosphere because there are no incentives in place to destroy the product. By allowing methyl

bromide users to buy and destroy stocks of Halon 1211 in exchange for the continued use of methyl bromide, overall emissions of ozone-depleting compounds could be

reduced. Such a swap would provide the members of our industry the opportunity

to continue using methyl bromide while reducing damage to the ozone layer. To

move the focus to emissions, the U.S. delegation should ask the Parties to develop

a plan for the use of a Halon swap to facilitate the continued use of methyl bromide

in the future.

Third, the need to annually submit applications to the EPA and attend multiple

Montreal Protocol meetings to explain and defend the industry’s CUN presents yet

another economic and technical burden for the California strawberry industry. We

are asked to submit an application for critical use two years in the future, long before we know what our CUE approved amount is in the subsequent year. A multiyear critical use process would enable growers to better plan their transition to alternatives rather than being forced to wait for annual updates on the availability

of methyl bromide. The phase-out process is hindered by uncertainty. It encourages

growers to continue using as much methyl bromide as allowed since availability for

future fumigation seasons is not certain. It is a matter of use it or lose it. We ask

that the U.S. delegation support a multi-year CUE process that will enable the California strawberry industry’s growers to efficiently plan their future use of fumigants.

Fourth, the U.S. delegation needs to continue to create a more open CUN review

process where organizations like the Commission can directly address questions

about their CUN with MBTOC during the review process. While the Commission

has been able to meet with representatives of MBTOC on several occasions to disVerDate 11-SEP-98 13:51 Apr 27, 2005 Jkt 020658 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 F:\DOCS\109-3 HAGRI PsN: HAGRI
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cuss our CUN, these meetings were infrequent and always followed MBTOC’s preliminary determination on the CUN. Additional meetings with MBTOC and TEAP

should be arranged during MBTOC’s review of the CUN’s to allow updated information to be shared with the Committee and allow the Commission to answer questions about our CUN before MBTOC makes any recommendations.

It has only been through active participation in the CUE process, including attendance at overseas meetings, that the strawberry industry has found any success

in achieving a positive outcome as it relates to the continued use of methyl bromide.

Four fundamental changes in the CUE process, including requiring that EPA’s nomination be accepted by MBTOC as received, shifting from methyl bromide usage to

emissions management, taking a multi-year approach to the CUN process, and creating a more transparent CUN review process, would allow more rapid introduction

of alternatives, reduce industry uncertainty, and remove the instance of further

cumbersome burdens such as those experienced by the California strawberry industry in recent years.

STATEMENT OF DANIEL A. BOTTS

Chairman Lucas, Ranking Minority Member Holden, and Members of the Committee:

I am pleased to appear on behalf of the Crop Protection Coalition (CPC) and Florida Fruit & Vegetable Association (FFVA) to discuss the issues surrounding the

Critical Use Exemption process for the important crop production tool methyl bromide. The membership of the Crop Protection Coalition comprises food and agricultural industries, including nurseries and horticultural industries, which rely on

methyl bromide to produce, store, handle or ship foods or other agricultural products. Florida Fruit & Vegetable Association is a voluntary trade association that

represents fresh fruit and vegetable producers in the state of Florida. Both of these

organizations have assumed a direct role in tracking the complex and often difficult

to comprehend regulatory developments associated with methyl bromide and the

critical use exemption process. As several of my co-panel members are also members

of the Crop Protection Coalition, I will focus my testimony on the experience of Florida Fruit & Vegetable Association in developing the critical use petitions for tomatoes, strawberries, eggplants, and peppers in Florida, and their subsequent review,

both at the national level and through the international process employed by the

Parties to the Montreal Protocol on Substances that Deplete the Ozone Layer.

The critical use exemption process is only one of the many facets of the complex

interactions surrounding methyl bromide that have resulted from changing science,

international review and decisions regarding an international treaty, and the interplay between two Federal laws, the U.S. Clean Air Act and the Federal Insecticide,

Fungicide and Rodenticide Act. As an observer representing directly impacted parties, I have watched with interest as the negotiations took place to establish the

critical use exemption process specifically for methyl bromide through an amendment to the Montreal Protocol, and development of the regulatory framework necessary for the U.S. Government to be able to respond to identified and scientifically

justified needs in the international arena.

The international criteria, as described in Decision IX/6 by the Parties to the Montreal Protocol to implement the exemption process, while not prescriptive clearly defined the decision to be based on specific conditions. That decision requires a decision that: ‘‘no technically and economically feasible alternatives that are acceptable

from the standpoint of environment and health and are suitable to the crops and

circumstances of the nomination’’ prior to allowing a critical use exemption.

In order to collect the information necessary to meet these criteria the Environmental Protection Agency’s Office of Air and Radiation developed, through a public

process, the information to be collected and submitted to document the quantity of

methyl bromide and sites of use that would qualify for critical use exemption. FFVA

participated in the public process and while not totally satisfied with the final format and information requested, we felt that the information as required by the subsequent Federal Register Notices on Application for Critical Use Exemptions of

Methyl Bromide (67 FR 31798, 68 FR 24737, 69 FR 25570), if judged fairly, would

provide adequate information for both the national and international review.

To fully appreciate the efforts required and difficulty in determining the appropriate information to be supplied, each year’s subsequent effort needs to be described:

46

2002 CRITICAL USE EXEMPTION APPLICATION CYCLE

The Federal Register Notice announcing the initial data collection effort was published in May of 2002 with a 120-day data collection and petition preparation period. The application was to cover the phase out of methyl bromide scheduled to

begin on January 1, 2005. The forms associated with the application process allowed

for a multiple year request (specifically asking for 2005, 2006 and 2007 acreages and

quantities). The alternatives addressed were to come from the ‘‘official’’ list of potential alternatives described at the international level and further refined to reflect

those products with registration in the United States. FFVA served as the petitioning agent for producers of tomatoes, strawberries, peppers and eggplant grown on

plastic mulch that are marketed by handlers in the state of Florida. The information

collection included the review of sponsored research specifically done to address the

unique soil types and cropping patterns associated with these crops in Florida.

These three petitions (eggplant and peppers were combined into a single petition)

are archived in EPA’s docket associated with this exemption process (OAR–2003–

0017). FFVA staff required over 800 man-hours with an additional effort from the

research community and growers of approximately 3,000 hrs to compile the information submitted in support of these three petitions. This initial effort was complicated

by the lack of clear guidance from the international community as to the format and

information to be included in the national Critical Use Nomination.

Florida Fruit and Vegetable Association had served as the coordination point in

Florida for much of the research initiated in the early 1990’s with the listing of

methyl bromide as a regulated substance under the Montreal Protocol. Pre-plant fumigation is the foundation of the crop production utilizing plastic mulch culture.

This practice was introduced in Florida in the early 1960’s and within three years

had been adopted by the majority of producers of vegetables on the sandy flatwoods

soils of Florida. The introduction of methyl bromide as a pre-plant treatment shortly

after the initial introduction of plastic mulch increased yields by a factor of three.

While other nematicides and soil fumigants have been registered during the ensuing

years the pre-plant treatment of choice has remained methyl bromide. The broad

spectrum of control of multiple pests and the development of application techniques

that allowed for in-bed fumigation contribute to the continued reliance on methyl

bromide as the best choice for pre-plant soil fumigation under Florida conditions.

The cooperative research program in Florida identified a next best alternative to

methyl bromide that depends on multiple applications of a mixture of pesticides to

deal with the spectrum of pests controlled by the single application of methyl bromide. During this period cultural practices and other means to reduce the use rate

of methyl bromide were examined. These efforts suffered a set back after the first

CUE petition had been filed as a result of the cancellation of the primary herbicide

we had identified to be used to help suppress Purple and Yellow Nutsedge, the primary problematic weed species.

The more elusive information required in the petition process concerned the economic impacts of adoption of the alternatives at the individual farm level as required to determine the ‘‘economic feasibility’’ of adoption of near equivalent technically feasible alternatives. This was further complicated in Florida by the

seasonality of production and the typical accounting periods utilized by growers in

the state. Records are maintained for production seasons split across calendar years

into a fall/winter/spring continuous cropping season. To provide the information as

required on the OMB approved application forms a significant effort to reformat historical information into the required periodicity for completion was required. The

practice of utilizing the same plastic mulch across multiple crops during a single

production season also complicated the economic information data collection. This

particular production practice is most common during the long growing seasons encountered in Florida. Most of the information collected at the national level on the

impact of the regulatory phase out of methyl bromide prior to the CUE process was

focused on the impact across the regional production industry and not on the individual farm enterprise unit.

After careful review of the above issues the resulting petitions submitted by FFVA

requested critical use exemptions for the total production acreage of all four crops

included in the petitions we submitted. The use rate requested was much lower that

the maximum use rate allowed on the current labels for methyl bromide in the subject crops. The rate requested represented the minimum rate necessary under current cultural practices to achieve nutsedge control. The submission from FFVA to

document the information requested was over 5,000 pages across the three petitions

submitted. This information was submitted in September of 2002. This initiated the

internal U.S. review for compilation of a National Critical Use Nomination to be

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gramme, the administrative oversight body for the Montreal Protocol, by the end of

January 2003. The UNEP review was to occur with a recommendation to the Parties

for Approval at the 15th Meeting of the Parties to the Montreal Protocol in November of 2003.

While there were numerous contacts between the review teams for the individual

petitions at the national level, the final decisions and sector allocations submitted

for international review were not discussed formally prior to submission. The internal review and decision process for the amounts to be requested resulted in significant reductions in the specific quantities identified for the four Florida crops (30%

reduction for tomatoes, 40% reduction for Strawberries, and 50% reductions for eggplant and peppers). FFVA requested and received a briefing by the Office of Pesticides Programs in cooperation with the State Department and the U.S. Department of Agriculture in March of 2003 to discuss our concerns and to offer our assistance in preparing any supplemental information that may be required as the international review took place. The U.S. CUN had consolidated the multiple individual

petitions into sectors and further reduced the amount of information submitted to

the international community for review. The U.S. Nomination had further consolidated the request into a single lump sum request for CUE approval at the international level.

While we did not totally agree with the treatment of the crops and quantities we

had requested FFVA was generally supportive of the efforts of the Agencies as the

nomination moved through the international review process. We were satisfied that

the difference between the petitioned amount and the requested CUE quantities

could be mitigated by the availability of methyl bromide manufactured prior to the

January 1, 2005 phase out date. We were also comfortable that the U.S. Nomination

fulfilled all of the requirements imposed by the Montreal Protocol and should move

through the international review process as the standard by which other national

nominations would be judged.

The international review process was extremely frustrating for those of us who

had submitted petitions to the U.S. government. The international Technical Committees established by the UNEP Ozone Secretariat charged with review of National

Critical Use Nominations, the Methyl Bromide Technical Options Committee

(MBTOC) and the Technology and Economic Assessment Panel (TEAP), began their

review in early April 2003 with the goal of providing recommendations to the Parties at the Open Ended Working Group of the Parties (OEWG) in July 2003. This

process ran into complications almost immediately with most of the sectors identified in the U.S. Nomination being classified as unable to assess. This was attributed

to the need for additional information to document the circumstances of the nominations for the specific crops and sites for which CUEs were nominated. This was even

further complicated by the operating rules of the review committees and the lack

of transparency in the international review process. The first chance many of the

petitioners had to discuss their petitions with the leadership and representatives of

MBTOC was through informal consultations in the hallways at the OEWG. This tremendous confusion and lack of consensus at the OEWG led to another meeting of

MBTOC in September 2003 with a recommendation mandated for consideration at

the 15th Meeting of the Parties in Nairobi, Kenya. The revised recommendations

were circulated in October 2003 with many of the sectors still in a state of indecision. Much of the discussions at the 15th Meeting of the Parties centered on the

Critical Use Nominations and in particular the perception by the European Community and many of the Article 5 nations that the U.S. Nomination was exceedingly

large and needed to be reduced. The U.S. delegation at that meeting did an excellent job in support of the national request and as a result the First Extraordinary

Meeting of the Parties was set for Montreal in March of 2004. MBTOC was directed

to meet in January 2004 to resolve the outstanding issues and to come forward with

specific recommendations for those categories that they had been unable to assess

in previous reviews. The MBTOC supplemental report was issued on 14 February,

2004. The U.S. received recommendations for approval on all but a small portion

of the initial amounts requested. While the decision was favorable the amounts of

methyl bromide approved for production and consumption were limited and the remaining CUE approved methyl bromide in the United States were to be drawn from

existing supplies. The Parties also adopted several decisions that impact future cycles of Critical Use Nominations. The Critical Use Nomination Handbook was revised with recommended forms for National Submissions and debate continued over

the appropriate way to evaluate the economic feasibility of alternatives and the information necessary to document ‘‘the circumstances of the crop and site of use’’ as

required in Decision IX/6.

48

2003 CRITICAL USE EXEMPTION APPLICATION CYCLE

The Federal Register Notice announcing the second round of applications for

CUEs was published on May 8, 2003 with a 90-day period for data collection and

submission. This application notice was based on the previous interpretation of the

requirements under the international criteria. The 2002 international review period

was in progress and the subsequent decisions of the parties governing CUN criteria

and information needs had not been taken. The 2003 round of applications requested any supplemental information for 2005 CUEs and quantities requested for

the 2006 and 2007 control periods. In Florida, FFVA consolidated its petition into

a single submission covering the crops included in the three petitions submitted in

2002. While much of the petition was devoted to addressing the reductions taken

by the U.S. from a regulatory perspective, the ‘‘best available alternative’’ identified

for economic analysis purposes was changed to reflect the loss of the registration

of Pebulate, the herbicide of choice. Additionally, in an effort to more accurately reflect the enterprise budgets for methyl bromide and proposed alternatives, a series

of direct meeting with individual growers were held to update the enterprise budget

information previously submitted. The petition and supporting information specific

to the nomination are archive in the EPAs Docket (OAR–2003–0017). The information archive represents a portion of the petition submitted by FFVA with 431 of over

1800 pages included. The research reports that accompanied the petition were not

docketed.

In an attempt to address concerns that had been raised during the international

review, a session on the CUE process was held as part of the International Research

Conference on Methyl Bromide Alternatives and Emissions Reduction in San Diego,

November 2003.The U.S. review of petitions was completed in January with submission of the 2003 CUN to UNEP in February 2004. The second round of CUN’s had

to be delivered to UNEP prior to completion of the review and decisions on the initial 2005 petitions.

In regard to the specific crops included in the CUN based on FFVA’s CUE petitions, FFVA was concerned that even though information was provided to document

the need for additional methyl bromide based on the review criteria used in the

2002 round, the U.S. Nomination included a reduced amount for the crops than was

included in the previous petition. FFVA was consulted in the period prior to submission of the 2003 Nomination and addressed the specific issues raised in the review.

However, the quantities proposed were not increased.

This problem was further exacerbated as a result of the lack of direct input into

the international review process. MBTOC was engaged in the additional review of

the 2002 recommendations when the U.S. Nomination was being finalized and was

able to meet with and tour the California production area. We requested the same

courtesy from UNEP and MBTOC for the crops included in the Nomination on the

east coast but this direct meeting has still not been held.

The initial review of MBTOC as published in its preliminary report to the Parties

in June 2004 raised additional issues associated with their review of the U.S. Nomination and potential reductions in CUE quantities based on criteria that had not

been discussed or decisions taken by the Parties. Most troubling in this respect was

a total disregard for the regulatory processes in individual countries and the assumption that newly registered products or changes to existing registrations translated into expedited and immediate adoption at the field level. Several of the specific

quantities of requested methyl bromide were proposed for reduction by MBTOC because technically feasible alternatives could be adopted. This was done based on individual members of MBTOC experiences in their countries that in many cases operate under different market forces and levels of input costs.

Additionally as part of the controversy that arose over the 2002 round of CUN’s

the operating parameters of MBTOC and the criteria associated with that review

are in the process of being revised. While the reconstituted MBTOC will not be in

place until the 2005 or 2006 review period, the Parties were directed to take the

decisions of the Extraordinary Meeting of the Parties into consideration with the

2003 round of CUN’s. The initial reviews as published in the TEAP report to the

Parties for consideration at the 15th meeting of the Parties included significant cuts

to the U.S. Nominations as a result of these criteria. The 15th meeting of the Parties considered the CUN recommendation and approved approximately 2 percent of

additional CUEs for the U.S. in 2005, but did not include additional consumption

or production for the 2005 control period. Action on the 2006 control period included

approval of consumption and production at 29 percent of the 1991 baseline with another Extraordinary Meeting of the Parties scheduled for July 1, 2005 to consider

approval of additional quantities. The U.S. government submitted detailed comments on January 31, 2005 support of the disputed quantities.

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2004 CRITICAL USE EXEMPTION APPLICATION CYCLE

The Federal Register Notice announcing the 2004 application process for methyl

bromide CUE’s was published on May 7, 2004 (69 FR 25570) with a 90-day data

collection and preparation period. Again FFVA submitted a petition covering the

four crops included with its original CUE request. FFVA’s 2004 petition reflected

changes in acreage for peppers and tomatoes in the 2007 CUE request. Labeling

changes related to worker protective equipment for applicators and early reentry for

workers on 1,3-dichloropropene allowed us to return to the in-bed application of this

product in the complex of alternatives required to achieve the ‘‘best available’’ alternative to methyl bromide. And even though several post emergent herbicide have

been registered for use on purple and yellow nutsedge, application and plant back

restrictions limit the utility of these products as a replacement for the pre-emergent

applied pebulate. The changes in identified alternatives and shifts in primary pests

in strawberry required significant additional information for this round of applications. FFVA’s core application is found in the EPA Docket associated with this exemption process (OAR–2003–0017). The Docket contains the application and supporting document, bibliography of research and supporting economic information

(1,018 pages). Copies of the supporting research documentation was not included in

the Docket (800 pages).

Concerns of FFVA for this round of nominations remain the same as with the previous submission in 2003. Additional information to document the continued need

and current status of efficacy trials of alternatives was included. In the opinion of

the research and grower community, while we continue to improve the performance

of the best available alternatives, we are not significantly advanced from where we

were in 2002 and 2003.

FFVA is seriously concerned over the U.S. Critical Use Nomination as forwarded

to UNEP on January 31, 2005. The sectors that include the four crops for which

we submitted petitions are proposed for significant reductions in CUE quantities in

2007. We are facing reductions from the quantities requested by Florida of over 50

percent in some cases. In conversations with the U.S. reviewers as they finalized

their analysis prior to submission of the petition to UNEP, reductions of this magnitude were not discussed.

As a result of the reductions proposed by the U.S. Nomination we are anticipating

significant, and, in our opinion, non-justified reductions at the international level for

the crops we represent.

OVERALL PROCESS ISSUES

Florida Fruit & Vegetable Association continues to have serious concerns over the

process involved with the Critical Use Exemption process. While the international

review continues to be the most frustrating, there are concerns over the domestic

process as well.In the scope and magnitude of issues facing the United States and

other in the international community methyl bromide does not reach the level of

BSE or Soybean Rust, but as the cornerstone of production for our membership it

is critically important. We will continue to be engaged in the process at all levels

to ensure the needs and concerns of our membership are addressed.

At the international level, we would encourage continued high priority of this

issue within the context of the Montreal Protocol. The U.S. State Department is to

be commended for the position taken to ensure that criteria adopted by the Parties

be consistently applied and scientifically reviewed. The international process needs

to be opened up both during review, recommendation and decision formulation

stages of the complex process. As outside observers and only having access to the

published documents at the international level there appears to be a lack of consistency in the review process, with the U.S. being held to a much higher standard of

data and justification of need as decisions are rendered. The composition and operating procedures of the Technical Review Committees of UNEP need to be fully open

and transparent. The Ozone Secretariat should be held accountable to the standards

the regulated community is subjected to in this country as the regulatory process

is carried out. This would minimize the appearance of political considerations in the

decision process.

At the domestic level, the overall process is somewhat limited by the time constraints and the decision points dictated by the international process. It is our opinion that the process of review that leads to the U.S. nomination needs to be more

open and transparent with actions taken by the government to reduce requested

quantities fully documented and discussed with the petitioners prior to finalization

for submission to the international level.

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FFVA appreciates the attention given to this issue by this committee as evidenced

by the hearing today. We stand ready to work with you to see that the information

and support needed to continue to address this issue are available.

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STATEMENT OF REBECKAH FREEMAN

Good morning Chairman Lucas, Mr. Holden and members of the subcommittee.

My name is Rebeckah Freeman. I am director of congressional and regulatory relations for pesticides, crop protection and air quality issues for American Farm Bureau Federation, the Nation’s largest general farm organization. On behalf of our

membership, I want to thank you for your interest in this precedent-setting challenge and for the opportunity to address the subcommittee regarding our alarm and

disappointment over the critical use exemption (CUE) process under the Montreal

Protocol.

Non-critical use of methyl bromide in the United States was completely phasedout at the beginning of this year, in compliance with the Montreal Protocol as incorporated in the Federal Clean Air Act. Where economically and technically feasible

alternatives exist, agricultural users have met the phase-out schedule and stopped

using this fumigant. However, despite significant ongoing efforts to find alternatives, methyl bromide remains an indispensable pest control tool for important

uses in crop production, grain storage, food processing and general pest management. For many agricultural users, methyl bromide is essential to their economic

survival; for consumers, it assures a safe and reliable food supply. It is precisely

these situations for which a CUE was designed and it should be available for appropriate agricultural uses.

I am here to make three points:

Securing continued, adequate availability of methyl bromide for domestic users

through the critical use exemption process is economically essential, scientifically

defensible and legally justified; The Montreal Protocol CUE review process is broken

and the United States should work actively to repair the system; and In light of

international reluctance to honor the terms of the protocol, Congress should work

to assure that U.S. agricultural users have fair access to the methyl bromide needed

to provide consumers a quality and affordable domestic product.

Importance

Methyl bromide has two main agricultural uses: fumigation of soil prior to planting called pre-plant treatment, and fumigation of harvested commodities and

foods—called post-harvest treatment.

The use of methyl bromide as a pre-plant treatment is essential to the production

of strawberries, tomatoes, grapes, almonds, walnuts, peppers, eggplant and cut flowers. To gain an economic perspective, a recent collaborative study by USDA and the

University of Florida found that a complete ban on farm uses of methyl bromide for

annual fruit and vegetable crops in California and Florida would result in estimated

losses of about $200 million annually in gross shipping point revenues, which represented about 20 to 30 percent of estimated revenues from treated commodities in

each state.

Pre-plant treatment with methyl bromide controls soil-borne fungal pathogens

and various pests that reduce vigor of newly planted crops, and right now there is

no feasible alternative to this chemical. Methyl bromide is linked directly to improved yields because the need to hand weed and cultivate soil is reduced, resulting

in more efficient irrigation. Better yields mean better margins. Better margins mean

more financial stability. Poor yields mean less stability, in some circumstances putting a producer at risk of not getting next year’s planting loan.

Methyl bromide is used for post-harvest treatment used to meet sanitary standards set by the Food and Drug Administration and importing countries for grains,

dry beans, raisins, prunes, figs, dates, almonds and walnuts. These products are

typically treated before and during storage and prior to being packed or shipped.

Storage structures, containers and processing facilities are also fumigated to ensure

food safety.

For those without feasible alternatives, methyl bromide continues to be the only

consistently effective and economical treatment that can be applied within a flexible

timeframe without harm to the food product, or, in some circumstances, other natural resources. With rare exception, it works every time, all the time.

Since U.S. ratification of the Montreal Protocol, agriculture has devoted enormous

time, effort and hundreds of millions of dollars to finding technically and economically feasible alternatives for methyl bromide. The good news is the U.S. has drastically decreased its non-essential use of methyl bromide because some alternative

treatments and combinations have become available for some users. However the reality is that feasible alternatives do not exist and are not expected soon for the agricultural users currently requesting CUE consideration. Despite claims to the contrary, there simply is no one-size-fits-all replacement or combination of replacements that work as effectively, consistently or affordably as methyl bromide.

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In the end, American consumers will suffer greatly from agriculture’s loss of

methyl bromide. The phase-out means the United States will increasingly depend

on imported food sources that are potentially less regulated, less reliable and less

safe.

BROKEN PROCESS

At previous oversight hearings on this issue, Members of Congress have voiced

concerns about the international treatment of and fairness towards the U.S. CUE

nomination. Unfortunately, Congress’ concerns have not resonated within the international community and the Montreal Protocol process of granting CUEs grows

steadily worse. For both 2005 and 2006, the justified U.S. CUE nomination was significantly cut by the international reviewers with little explanation or opportunity

for meaningful reconsideration. We are not optimistic that the review of the 2007

nomination will fare much better. First-hand observers of the process believe that

some of the more influential parties to the Protocol—most significantly the European Union—are asserting a ‘‘take it or leave it’’ stance position when reviewing and

adjusting the U.S. nomination. We hope that members of this committee will join

with us insisting on improvements to the international process.

The terms of the protocol intend for the CUE process to provide relief to any

user’s critical, documented need for methyl bromide. Domestic agricultural users

commit huge amounts of time, expertise and financial resources in preparing their

annual individual CUE requests for the U.S. government. With the help of USDA,

EPA invests considerable time and resources into submitting a thorough, consolidated CUE nomination package to the international reviewers. The State Department has gone to great lengths to advocate for American agriculture and defend the

U.S. CUE request against relentless second-guessing from the parties. Unfortunately, most observers agree that the tremendous combined efforts of U.S. users and

the Federal Government have borne little, if any, fruit.

The 2005 and 2006 ‘‘internationally approved’’ U.S. CUE allowances were cut significantly from their original nominations. For 2005, the parties even made up a

new requirement specifically for the American market that capped U.S. domestic

production at 30 percent in addition to demanding a reduced CUE limit. Nowhere

in the protocol is there any mention of direct limitations solely on production. Unfortunately, because U.S. agriculture must have an approved CUE percentage to prepare for each future year’s planting season, our delegation is effectively forced to

continue to accept objectionable terms with little hope of meaningful recourse or

remedy.

The U.S. government clearly lays out the necessary information to prove that the

requirements for granting a CUE under the Montreal Protocol are met. The protocol

specifies a country’s CUE be based on technical and economic feasibility of alternatives: no where does the protocol ‘‘limit’’ or cap the amount of methyl bromide

that can be justified to meet CUE needs. Despite this, the Parties consistently argue

that a CUE should not be more than 30 percent of baseline the last phase-down

goal before phase out for non-critical uses. Farm Bureau strongly believes that unless there is a legitimate scientific concern, CUE approval should be based on real,

sometimes fluctuating need and not subject to renegotiation to suit political ends.

Many individuals and groups have questioned the legitimacy and objectivity of the

CUE process.— The actions of the international community—most recently at the

Meeting of the Parties to the Protocol in Prague last November—graphically demonstrate that the international process is not objective, transparent or science-based.

Non-governmental participants, like Farm Bureau and other user groups, are not

allowed to observe or listen to technical debates among the Parties regarding our

domestic needs and circumstances. Were it not for the cooperation and willingness

of the U.S. delegation to keep us updated, the very people who rely on this process

for their livelihood would not know their fate until the Parties decide to publicize

the final agreements at a wrap-up plenary session held in the waning hours of the

last day of the Meeting.

As stated in our policy, Farm Bureau supports the use of a fair, science-based

process for critical use exemptions. The process should contain a reliable, consistent

set of standards equitable to all parties involved. Like other Crop Protection Coalition groups, we are greatly concerned that the actions of some in the international

and activist communities translate to other countries deciding the fate of American

agriculture. We have seen and experienced enough of the Montreal Protocol process

to be convinced that the CUE process—as it currently exists—cannot be relied on

to fairly evaluate American agriculture’s legitimate methyl bromide needs. The actions of the international community clearly illustrate that the Protocol is no longer

about ozone protection. Rather, rules are being changed to suit the political agendas

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and economic advantages of other countrie agendas that have nothing to do with

environmental treaties and everything to do with putting American producers and

consumers at risk.

The U.S. Government signed the protocol in good faith. Congress ratified its terms

into law, our country has drastically reduced the use of ozone depleting substances,

and domestic users of methyl bromide have unequivocally justified their critical use

needs to the international reviewers. We are holding up our end of the bargain. We

have every right to expect the Parties to do the same.

Farm Bureau and other allied groups in the Crop Protection Coalition believe that

immediate improvements must be made to the Montreal Protocol’s CUE process,

specifically:

(1) The CUE process must be science-based, fair to all participants and consistent

with the terms in the protocol. Farm Bureau strongly believes that unless there is

a legitimate scientific question, CUE approval should be based on real, sometimes

fluctuating need, and not subject to renegotiation or limitation to suit political ends.

(2) Given the current budget crisis, Congress should carefully evaluate the efficiency and effectiveness of U.S. monies appropriated for the multilateral fund sent

to the Ozone Secretariate within the United Nations Environment Programme.

(3) The U.S. should continue to urge the international process to allow for multiyear CUE requests. U.S. negotiators have proposed this concept to the parties, but

so far it has been rejected with little debate on the merits. We support a multi-year

CUE because it would streamline the application process and relieve yearly burdens

on the applicants and agencies. Most importantly, a multi-year CUE would allow

for better planning among users: better planning leads to more flexibility and more

flexibility could lead to further reductions in the need for methyl bromide.

On behalf of Farm Bureau members nationwide, thank you for the opportunity

to address the subcommittee today regarding this complex, issue. I will be pleased

to answer any questions the subcommittee might have.

STATEMENT OF WILLIAM A. CAREY

I thank everyone for the opportunity to address this committee. I wish this hearing the very best because its efforts are vitally important to all CUE applicants. Perhaps the best way I can demonstrate the importance of this issue to our forest nursery industry is to briefly describe the Southern Forest Nursery Management Cooperative, indicate the limit of our research funds, and allow you to compare our resources to our efforts to find an alternative to MBr as indicated in the list of Research Reports to our membership. The Nursery Coop has a membership of 11

States, six forest industries and two private forest companies that pay an annual

membership dues of approximately $8,000 per entity. Its members produce about 80

percent of the seedlings for reforestation in the US and they direct our research effort. Over the last decade most of that effort has been trying to determine how we

will produce seedlings without MBr. The list of Research Reports, starting in 1993

indicate we carried out about 30 nursery studies, or three studies per year, and this

has been most of my research efforts through this period.

When our research efforts began in 1993, like those of most other groups, we focused on the apparently doable job of finding a suitable replacement for MBr by concentrating on already registered and available chemical substitutes such as

dazomet, metham sodium and chloropicrin in various combinations. We also evaluated several less promising, non-chemical alternatives. Surprisingly, the alternatives we tested produced damaging side effects with far greater impact on their

widespread implementation than the reduced seedling yield observed in trials. Despite our research efforts, we have been unable to make much progress against

these side effects and since a peak in our optimism around 2000, our concern with

finding an alternative before 2005 has increased.

We have been involved with the CUE process since June 2002 when I attended

the first round of meetings held by the EPA at an Orlando session to discuss the

application process. Working with instructions from that meeting we filed our first

CUE in September 2002. In October, I was asked by the EPA to help evaluate

CUE’s for other commodity groups and working through that process I came to appreciate that economists at the EPA had a good understanding of the economic realities for forest nurseries and were doing their best to send forward CUE’s for all

commodity groups with all the requirements to MEBTOC. In June of 2003, we attended the second round of meetings to provide information on CUE applications in

Orlando, and although there was a lot of uncertainty about how the allocation process was going to work, it seemed that the CUE application process was firming up.

Representatives from the EPA and USDA seemed to have a better understanding

of what they would need to meet the demands of MEBTOC. The Nursery Coop filed

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a CUE in 2003 and I believe that our representatives from the US were surprised

by how severely they were rejected. The response from MEBTOC seemed to indicate

we were incapable of producing scientifically valid data. A recurrent comment was

that more effort be made to containerize the entire US forest nursery industry.

However, since bareroot seedlings sell for about $0.04 each and container seedlings

sell for about $0.14 the increased price at the nursery gate for containerizing an annual crop of 1.2 billion seedlings is $120,000,000, and this figure does not address

seedling quality issues. An economic assessment by the National Agriculture Pesticide Impact Assessment Program (NAPIAP) in 1993 estimated MBr returned more

per pound ($109/lb) in forest nurseries than for other significant crop uses. I have

made similar estimates from real data by projecting present values for expected

plantation growth for different seedling size distributions in fumigated and not fumigated plots.

Last year members of the forest nursery industry discussed the proposed Final

Rule and the CUE nominations for 2005 in conference calls and subsequently responded to the EPA with comments and questions. Although the figures in the 2004

nomination seemed to us to be minimal I came to believe that our representatives

at the EPA really believed that the past years ‘‘misunderstandings’’ with MEBTOC

had been worked out and these figures would pass essentially as taken forward. I

believe that our meeting here today is to assess why that did not happened in

Prague in 2004.

I have probably spent 50 percent of my research effort on evaluating fumigants

over the last 10 years and in the last three, with others at the Nursery Coop, put

in another 10 percent of my effort and time on producing CUE’s and filling other

information requirements. Given the amount of time devoted to the CUE process it

is amazing how little we know about what we have accomplished for our industry.

When MBr was added to the Montreal Protocol, there was to be a scientific assessment of its role in ozone depletion. Data gathering went on for a couple of years

and then a number just seems to have been assigned to its depletion potential. It

appears to many that the MBr allotted at the end of the CUE process were also

independent of data and the allotments were arrived at by working backward from

a known number. It would help MBr users if the CUE process worked as intended.

If it cannot it would help if we were told what the allocation number is so we could

save our effort on the process. It may, as the saying goes, take an act of Congress.

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