USA CUN13 SOIL Peppers Open Field Page 1 of 16

NOMINATING PARTY : The United States of America FILE NAME: USA CUN1 3 SOIL PEPPERS Open Field BRIEF DESCRIPTIVE TI TLE OF NOMINATION : Methy l Bromide Critical Use Nomination for Preplant Soil Use for Peppers Grown in Open Fields (Submitted in 20 1 1 for 201 3 Use Season) CROP NAME (OPEN FIEL D OR PROTECTED): Peppers Open Field QUANTITY OF METHYL B ROMIDE REQUESTED: T ABLE 1: Q UANTITY OF M ETHYL B ROMIDE R EQUESTED IN E ACH Y EAR OF N OMINATION

Year N OMINATION A MOUNT (K ILOGRAMS ) 2013 5,673 kg
NOMINATING PARTY CON TACT DETAILS: Contact Person: John Thompson Title: Division Director Address: Office of Environmental Policy U.S. Department of State 2201 C Street, N.W. Room 2658 Washington, D.C. 20520 U.S.A. Telephone: (202) 6 47

- 9799 Fax: (202) 647

- 5947 E

- ma il: thompsonje2@state.gov Following the requirements of Decision IX/6 paragraph (a)(1) The United States of America has determined that the specific use detailed in this Critical Use Nomination is critical because th e lack of availability of methyl bromide for this use would result in a significant market disruption

. . ■ Yes  No

Signature Nam e Date Title: (Details on this page are requested under Decision Ex. I/4(7), for posting on the Ozone Secretariat website under Decision Ex. I/4(8).) This form is to be used by holders of single

- year exemptions to reapply for a subsequent year’s exemption (for example, a Party holding a single

- year exemption for 2005 and/or 2006 seeking further exemptions for 2007). It does not replace the format for requesting a critical

- use exemption for the first time. In assessing nominations submitted in this format, TEAP and MBTOC will also refer to the original nomination on w hich the Party’s first

-

year exemption was approved, as well as any supplementary information provided by the Party in relation to that original nomination. As this earlier information is retained by MBTOC, a Party need not re - submit that earlier informati on.USA CUN13 SOIL Peppers Open Field Page 2 of 16

CONTACT OR EXPERT(S) FOR FURTHER TECHNICAL DETAILS: Contact/Expert Person: Jack Housenger Title: Director Address: Biological and Economic Analysis Division Office of Pesticide Programs U.S. Environmental Protection Agency 1200 Pennsylvan ia Avenue, N.W. Mailcode 7503P Washington, D.C. 20460 U.S.A. Telephone: (703) 308

- 8200 Fax: (703) 308

- 7042 E

- ma il: Housenger.Jack@epa.gov

LIST OF DOCUMENTS SENT TO THE OZONE SECRETARIAT IN OFFICIAL N OM INATION PACKAGE: 1. PAPER DOCUMENTS: Title of paper documents and appendices No. of pages Date sent to Ozone Secretariat USA CUN1 3 SOIL PEPPERS Open Field 15

2. ELECTRONIC COPIES OF ALL PAPER DOCUMENTS: *Title of each electronic fil e (for naming convention see notes above) No. of kilobytes Date sent to Ozone

Secretariat USA CUN1 3 SOIL PEPPERS OPEN FIELD

* Identical to paper documentsUSA CUN13 SOIL Peppers Open Field Page 3 of 16



### METHYL BROMIDE CRITICAL USE RENOMINATION FOR PREPLANT SOIL USE ( OPEN FIELD OR PRO TECTED ENVIRONMENT) PE PPERS 1. SUMMARY OF THE NEED FOR METHYL BROMIDE AS A CRITICAL USE: This renomination covers only peppers grown in the southeastern US, Georgia, Florida,. These crops generall y are grown in open fields on plastic tarps, often followed by various other crops. Harvest is destined for the fresh market

. Only areas that cannot use alternative fumigants or non

- fumigant options have been included in the calculation of nominated amounts and area to be treated. The applicants’ requests have al so been adjusted downward to account for the lower methy l bromide dose rates (see BUNNIE in Appendix A) for the southern regions of US pepper production, since increased use of high barrier films in conjunction with lower rates has been reported there. T he USG has reviewed all factors affecting transition rates in this sector. Based on this assessment the transition rate has been greatl y increased for most portions of this sector. For the area covered in this nomination, the USG believes that the narrati ve discussion included in this document is technicall y valid. The USG has nominated amounts of meth yl bromide based onl y on those sub

- sectors that cannot transition away from methy l bromide at the accelerated rate. In developing this renomination the USG examined several recent studies to determine whether yi eld losses and market window losses associated with the best available fumigant alternative could be altered from previous nominations. Unfortunately none of the studies located by the USG met the crit eria that earlier cited studies did. These criteria include: the use of fumigant alternatives registered for the crop nominated, the presence of both a meth yl bromide standard and an untreated control as treatments as well as the monitoring of yi elds under each treatment. Several such studies included a meth yl bromide treatment or an untreated control but not both, or included both but did not monitor y ield, or included unregistered alternatives. However, research conducted at the University of Georgia that examined use of a three way combination of alternative fumigants (1,3 D followed b y chloropicrin followed b y metam
- sodium) did meet these criteria, Therefore, nominations for the southern US areas were adjusted to reflect the apparent technical feasibili ty of this three way

combination of alternative fumigants under VIF or metallized films, as a replacement for spring

- time applications of meth yl bromide+chloropicrin, after accounting for areas in the south that face prohibition of 1,3

- D due to the presen ce of karst topographical features. The recent renewal of the federal registration of iodomethane, along with its registration at the state level in all the pepper producing regions covered b y this nomination, will be factored into calculations of the tot al amount of methy l bromide being requested for peppers. This calculation takes into account the issue that time will be needed for the industry to transition to the use of this material in areas where it is feasible. This transition is part of the BUNNIE included in Appendix A.USA CUN13 SOIL Peppers Open Field Page 4 of 16

U.S. reliance on meth yl bromide has dramatically and rapidl y been reduced over the last eight ye ars. Critical use exemption (CUE) requests have decreased every y ear since the U.S. phase

out process began. The development, registr ation, and use of new pest control products and production methods have been key to the progress and reductions made to

- date. As alternatives have demonstrated their suitability , as thorough reviews of research results and applicant information have been conducted, and contacts have been made with regional crop experts to assess the technical and economic feasibility of alternatives, U.S. Government (USG) requests have reduced b y 99%, for the fruiting vegetables, over the last 9 ye ars. However, as the amo unt of methy l bromide available for use decreases each y ear, substantial challenges exist in the collection of needed data to substantiate on

- going critical needs through the CUE process. There are now several alternatives for soil fumigation, including 1,3

- dichloropropene plus chloropicrin, the “UGA 3 Way ” combination (1,3

- dichloropropene plus chloropicrin followed b y metam sodium), iodomethane plus chloropicrin, and dimethy l disulfide (DMDS) which have demonstrated some technical and economic feasibili ty for pest control in a number of vegetable crops in the U.S. Southeast. However, CUE applicants in this nominated sector have indicated that they are not alway s suitable for all situations. While DMDS has a Federal registration and has demonstrated eff

ectiveness, it is not currentl y registered in all the relevant states. Given the timing of state registrations, lack of experience using this alternative, and application methods still under development to minimize odor in communities surrounding treated fields there is uncertaint y in predicting when this alternative can be reasonabl y expected to adequatel y replace methy l bromide in specific application scenarios. While the DMDS registrant has been working with the product to reduce the odor, and growers are gaining experience in its use, work is still needed on application approaches for the alternative to be fully available for use in U.S. southeast vegetable crops. For example individual operators and small farms, which account for up to eight y percent of the growers in this nominated sector are especially hard

- pressed to make this transition, because one of the most promising alternatives requires additional money to convert their fumigation equipment and custom fumigation applicators are not available in all areas. In addition to the expense to convert to the alternatives, there have been reports that the alternatives do not perform as well as the MeBr:pic combination. These concerns about the alternatives have onl y recently been brought to the US G attention and insufficient supporting information was provided. Because of the uncertainties and challenges associated with the use of the available alternatives, the USG believes it most prudent and the best public policy

to collect additional informat ion so that the technical and economic impacts of these reported problems can be evaluated. The USG will request the applicants provide additional information to us no later than June 1, 2011 so that the information can be anal yz ed and provided to MBTOC b y J uly 15, prior to the Open Ended Work Group (OEWG) meeting in earl y August. The quality of an y additional information received will first be evaluated in terms of whether or not it supports a compelling case and confirms problems with the feasibility of alternatives. Then, on that basis, the USG will either support or withdraw this nominated sector at that meeting. The nomination attached specifies the correct year (2013) and amount of methyl bromide that is being requested for the individual crops wi thin this sector. However, there has been no attemptUSA CUN13 SOIL Peppers Open Field Page 5 of 16

to update the information in this document regarding the new research, availability of alternatives, etc. Since t he USG learned of the issues facing the growers within this sector, after speaking direc tly

with researchers familiar with the specific problems only very recentl y , this information was not available at the time the USG recommendation was developed.

2. SUMMARIZE WHY KEY ALTERNATIVES ARE NOT FEASIBLE The U.S. nomination is only for thos e areas where the alternatives are not suitable. I n U.S. pepper production there are several factors that make the potential alternatives to methy l bromide unsuitable. These include:

- Pest control efficacy

of alternatives: the efficacy of alternatives may not be comparable to methy l bromide in some areas, making these alternatives technicall y and/or economicall y infeasible for use in pepper production.

- Geographic distribution of key target pests: i.e., some alternatives may be comparable to methy l bromide as long as key pests occur at low pressure, and in such cases the U.S. is only nominating a CUE for peppers where the key pest pressure is moderate to high such as nutsedge in the Southeastern U.S.

- Regulatory

constraints: e.g., 1,3 D use is limited in Geor gia and Florida due to the presence of karst topography

.

- In feasibility

of fall

- season fumigation in the southeastern US, even with the best available combination of alternatives (1,3 D followed b y chloropicrin followed b y metam
- sodium).

- There are significant restrictions on which crops can be rotated through after use of a given alternative (e.g., halosulfuron has rotational restrictions that prevent its use in southeastern US tomatoes).

- Resistance management prevents use of the alternative (e.g., gl yphosat e resistant weeds, such as Amaranth, in the southern US, prevent use of this alternative as a post

- emergent weed control in those regions). Florida, Georgia, and the Southeastern U.S. ( outside Florida and Georgia ) are each presented as separate regions in this nomination to reflect the separate applications from growers in these areas. In this nomination, the Southeastern U.S. includes the following states: Alabama, Arkansas, Kentuck y, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, an d Virginia. A brief description of their need for methy l bromide follows, also presented on a regional basis. 3. IS THE USE COVERED BY A CERTIFIC ATION STANDARD ? Methy l bromide is n ot used to meet a certification standard for pepper vegetable production

.
4 . IF PART OF THE CROP AREA IS TREATED WITH METHYL BROMIDE, INDICATE THE REASON WHY METHYL BROMIDE I S NOT USED IN THE OT HER AREA, AND IDENTIFY W HAT ALTERNATIVE STRA TEGIES ARE USED TO CONTROL THE TARGET P ATHOGENS AND WEEDS W ITHOUT METHYL BROMIDE THERE.USA CUN13 SOIL Peppers Open Field Page 6 of 16

In southeastern U.S., Florida, and Georgia, areas not treated have low levels of nutsedge or nematodes in pepper fields 5 . WOULD IT BE FEASIBLE TO EXPAND THE USE OF THESE METHODS TO COVER AT LEAST PART OF THE CROP THAT HAS REQUESTED USE OF METHYL BROMID E? WHAT CHANGES WOUL D BE NECESSARY TO EN ABLE THIS? Better, more consistent pest control efficacy from the alternatives would be required

. The USG has reviewed all factors affecting transition rates in this sector. Based on this assessment the transition rate has been greatl y increased for most portions of this sector. For the area covered in this nomination, the USG believes that the narrative discussion included in this document is technicall y valid. The USG has nominated amounts of meth yl bromide based onl y on those sub

- sectors that cannot transition away from methy l bromide at the accelerated rate.

6 . SUMMARY OF RE CENT RESEARCH As mentioned earlier in this document, iodomethane formulated with chloropicrin has shown good efficacy

against key

pepper pests, including nutsedge, in a number of trials with peppers and related vegetables such as tomatoes ( e.g., Louws et al. 2006, Culpepper 2006, 2007, 2008, Culpepper et al. 2008, Olsen 2008 ). Iodomethane had time limitations removed from its federal label in October, 2008, and has received state

- level approval in 47 US states (California, Washington, and New York are the exceptions at this time ). However, other important constraints must be considered when assessing the feasibility of iodomethane as a meth yl bromide alternative. These include: (1) the cost of iodomethane formulations is higher than methy l bromide, and will probably remain so for the next several y ears, (2) growers and researchers will need time to evaluate iodomethane use in the various loc al production conditions covered b y this nominations, and (3) growers and applicators will need to make some equipment modifications to adapt to the lower flow rates t ypical with less expensive iodomethane application rates and to avoid the corrosion of so me metals that can occur with iodomethane ( Sumner 2005, Noling et al. 2006 ). The economic impact of using iodomethane is further described in Part E of this document (below). A consideration of these aspects has led the USG to conclude tha t while iodometh ane appears to be technicall y feasible to manage key pepper pests in all parts of the US where it has been registered, time will be needed for growers and extension service experts to adapt its use successfully . Therefore, the amount of methy l bromide nomi nated for peppers has been adjusted downward while also considering the time needed to transition to iodomethane. In the short term, and in situations where pepper producers cannot use iodomethane, the USG concludes that other fumigant alternatives to me thy l bromide would have to be used. The details of this conclusion are similar to the previous y ear’s pepper CUN, and are further discussed below. Narrative description of studies relevant to key weeds and nematodesUSA CUN13 SOIL Peppers Open Field Page 7 of 16

For nutsedge pests, which are widespre ad in all requesting regions, pepper growers do not currentl y have technically feasible alternatives to methyl bromide use at planting. Metam

sodium and 1,3 D + chloropicrin have shown some efficacy in small

- plot trials in other vegetable crops (e.g, toma to). However, at best, metam sodium may allow at least 44 % y ield loss, while 1,3 D may

allow at least 29 % loss. Both often show less control than methy l bromide (in terms of population suppression) of nutsedges. These factors suggest that even this al ternative will not be economically

feasible even in the best

- case technical scenario. It should be noted also that there is evidence that both 1,3 D and meth yl isothiocy anate levels decline more rapidl y, thus further compromising efficacy , in areas where these are repeatedl y applied (Smelt et al., 1989; Ou et al., 1995; Gamliel et al., 2003). This is probably due to enhanced degradation of these chemicals b y soil microbes (Dungan and Yates, 2003). Other chemical alternatives to methy l bromide that have shown promise against nutsedges and nematodes (e.g., pebulate and dimethy l disulfide ) are curren tly unregistered for peppers, In one recent stud y, Culpepper and Langston (2004) conducted studies at 2 sites in spring 2003 and one site in the f

all season of 2004. Plot sizes were 20 feet X 32 inches (4.94 m 2 ). Treatments were: Meth yl bromide standard (67:33 formulation), untreated control, 2 formulations of Telone (1,3 D + chloropicrin) at various doses, followed b y an additional application of either chlor opicrin or metam

- sodium, a third formulation of 1,3 D + chloropicrin (“Inline”), and iodomethane . An additional set of plots received the same fumigant treatments but also received an herbicide treatment (clomazone + halosulfuron) later in the season. S ome important caveats must be mentioned when considering these results: (1) Plots used were quite small, and it is not at all clear if the promising results will hold reliably in larger commercial fields. This is particularly worrisome given the highl y variab le results reported by other researchers for the same methy l bromide alternatives. (2) The nutsedge populations in this study were dominated by

y ellow nutsedge (90 % of the total number). It is not clear if populations where purple nutsedge is dominant will b e controlled as effectively . A number of other studies have indicated that purple nutsedge is a hardier species, and even in Culpepper and Langston’s study , it appeared more resistant to the methy l bromide alternatives. For example, iodomethane gave “77 % control” of yellow nutsedge, but onl y “37 % control” of purple nutsedge. Control in this case was apparentl y defined as the reduction in nutsedge populations as compared to populations in the untreated control. Another recent stud y of methyl bromide a lternatives involving key weed pests was done by Gilreath et al. 2005 (Crop Prot (24): 903

- 908 ) . One of 3 trials in that study showed an average of 30 % lower bell pepper yields with nutsedge and nematodes as the key pests present. In the other 2 trials y ields were not significantly different across different fumigant treatments, but nutsedge pressure was lower in those trials as compared to the third. Other i mportant caveats to these results are

- this was a small

- plot study and was done in Florida. Thus it is not clear how applicable the results are to the more northern regions requesting methy l bromide for vegetable crops (e.g., Delaware, Mary land, and Virginia )

.USA CUN13 SOIL Peppers Open Field Page 8 of 16

In addition to the studies described above, several other recent studies conducted in the production circumstances of the southeastern US have examined several fumigant alternatives to methy l bromide, most done in crops other than peppers (e.g., Santos et al. 2006, Candole et al. 2007, Santos and Gilreath 2007, Gilreath and Santos 2005, 2007). These studies either focused solely on nutsedge weeds or a combination of nutsedges, diseases, and nematodes. However, USG has examined these papers and concludes that for pepper s, these studies do not meet all the criteria that allowed the use of earlier studies in estimating y ield and qualit y losses that may occur if such methy l bromide alternatives are used as direct replacements for methy l bromide. These criteria are: the use of fumigant alternatives registered for the crop nominated, the presence of both a meth yl bromide standard and an untreated control as treatments as well as the monitoring of yi elds under each treatment. Several such studies included a methy l bromide treatment or an untreated control but not both (Santos and Gilreath 2007, Johnson and Mullinix 2007), or included both but did not monitor yield (Candole et al. 2007), or included unregistered alternatives (e.g., Gilreath and Santos 2005, 2007, Santos et al. 2006). While these studies (the majority of which were small

- plot trials) indi cate continued promise of methy l bromide alternatives such as 1,3

- D, metam

- sodium, chloropicrin, herbicides, or combinations thereof, they cannot y et be used to alter yi eld estimates . Therefore, for this nomination, the USG concludes that, for pepper gr owers who can onl y use either 1,3

- D + chloropicrin or metam

- sodium+chloropicrin in fall

- season fumigations to control nutsedge and nematode pests, the y ield loss estimates used in last y ear’s nomination continue to be applicable. These loss estim ates are i llustrated in Table 2 below, and are used as the basis of part of the economic assessment in the following section. T ABLE 2 . DATA ON YIELD LOSSES WITH LI KELY METHYL BROMIDE ALTERNATIVES AND NUT SEDGE PRESENT AS A CROP PE ST . Chemicals Rate (kg/ha) Average N utsedge Density (#/m 2 ) Average

Marketable Yield (ton/ha) % Yield Loss

(compared to MB) Untreated (control)

- 300 ab 20.1 a 59.1 methyl bromide + Pic (67
- 33), chisel
injected 390 kg 90 c 49.1 b

--- 1,3 D + Pic (83
- 17), chisel
- injected 327 l 340 a 34.6 c 29.5 Metam Na, Flat Fumigation 300 l 320 a 22.6 a 54.0 Metam Na, drip irrigated 300 l 220 b 32.3 c 34.2 Locascio et al

. 1997. Recent studies that are useful (within the context of this nomination) in assessing technical feasibility of a combination o f methy l bromide alternatives include the series of trials being conducted b y Culpepper et al. at the Universit y of Georgia (e.g., Culpepper 2006, Culpepper et al. 2007a,b, Culpepper 200 8 ). These studies indicate that a 3

- way , sequential combination ofUSA CUN13 SOIL Peppers Open Field Page 9 of 16

sev eral fumigant alternatives is technicall y feasible for spring

- time fumigation of most vegetable crops. The 3

- way

combination consists of 1,3 D followed by chloropicrin at about 168 kg/ha, followed b y metam
- sodium, all under VIF or metallized (high barrier ) tarps, and will henceforth be referred to as the ‘UGA 3 way ’, as Culpepper et al. have. An example of the results obtained in spring fumigation with this combination in peppers is presented in the table below. A lso see several research reports available from the University of Georgia at www.gaweed.com ). T ABLE 3 . N UMBER OF P EPPER F RUIT - M ETHYL B ROMIDE : C HL OROPICRIN V ERSUS T HREE W AY C OMBINATION
. S PRING 2006 Fruit Size Methy l Bromide : Chloropicrin (# of Fruit) UG A 3 way 1,3

- D fb chloropicrin fb metam Na Jumbo 30 b 125 a X

- Large 219 a 237 a Large 153 a 143 a Chopper 217 a 252 a Cull 11 a 9 a Jumbo + X

- Large + Large 402 b 505 a Footnote: Culpepper 2006. fb means followed by or a sequential treatment. Plots were 3 rows by 100 feet long. Since Georgia is similar to other areas of the southeastern US, except Mary land/Delaware pepper s which face a different key pest ( F. oxysporum niveum ) , these results should be applicable to spring usage of meth yl bromide in these regions. However, other results thus far indicate that summer / fall fumigation is not similarly effective with this combination of alternatives (Culpepper, personal communication, Culpepper 2006 , 2008). Results of one of several experiments conduc ted by Culpepper et al. at the University of Georgia illustrate the infeasibility of the use of the ‘UGA 3 way ’ method in place of methy l bromide for fall

- season fumigations in vegetable production. In this experiment, fields were fumigated during for fall

- season crop production on July 17 2007 . Soil temperature was 84 degrees at 8 inches. The experiment consisted of 4 fumigant treatments (Table 4) that were replicated three times. Even under high

- barrier film (“Blockade”), the ‘UGA 3 way ’ gave less contro l of purple nutsedge as compared to the methy l bromide standard under the same t ype of film. Yields were consistently

lower with the ‘UGA 3 way ’ as well, with a roughly 50 % reduction in both number and weight of harvested vegetables (Table 4 ). The economi c implications of this level of y ield loss for Georgia pepper growers are further described in section 7 , below. Table 4 . Comparing methy l bromide and the 3

- Way for the control of nutsedge and pepper yi eld. Fumigant Mulch Late

- season purple nutsedge cont rol Harvests 1

- 2

(Jumbo pepper) Harvests 1

- 4 (Jumbo pepper)

% #

fruit/plot lbs/plot #

fruit/plot lbs/plotUSA CUN13 SOIL Peppers Open Field Page 10 of 16

UGA

- 3 Way LDPE 48 d 34 c 16 c 44 c 19 c UGA

- 3 Way Blockade 60 c 50 b 24 b 71b 32 b Methy l Bromide + chloropicrin Blockade 85 b 106 a 48 a 136 a 61 a

None LDPE 0 f 13 d 6 d 19 d 8 d Notes : (1) The UGA 3 Way consisted of 1,3 D at approximately 192 kg/ha , followed by chloropicrin at 168 kg/ha, followed by metam

- sodium at approximately 358 kg/ha. Methyl bromide + chloropicrin w as applied in a 50:50 mix at approximately 160 kg/ha of each. R ates as shown are not planting bed

- strip adjusted. (2) “Mulch” refers to the tarp type. LDPE = traditional high permeability tarp; Blockade = low perm eability tarp manufactured by Pliant Corp. It is important to n ote that caveats accompan y even the technical feasibility of the ‘UGA 3 way ’ use in spring fumigations . Growers must make several application modifications to properly use the approach, and this may incur significant capital expenditure. Culpepper et al. e stimate their costs to do this for their research trials at about $ 15,000 (Culpepper et al. 2007b). Application costs will also increase as more chemicals and runs of tractor equipment are required to conduct the ‘UGA 3 way ’, and the cost of VIF or metall ized film is between 1.75 and two times greater than standard LBPF (Culpepper , personal communication). Time and further research and extension education will also be needed to implement the ‘UGA 3

- way ’ method in areas outside Georgia where the method h as been less

- studied, and where different problems may

need to be resolved. An example of this issue is illustrated in recent work by Chellemi et al. (2008). These researchers evaluated the ‘UGA 3 way ’ in on

- farm tests in Florida peppers. Results of four t rials were highl y variable, with two showing better yi elds than the methy l bromide standard, and two showing worse results. All four trials showed a reduction in larger (more profitable) peppers in the ‘UGA 3 way ’ as compared to the methy l bromide standard . The cause appeared to be an overload of potassium in the soil, created by the combined use of the metam

- potassium in the ‘UGA 3 way ’ and the growers’ standard practice of appl yi ng a high

- potassium fertilizer. 7 . ECONOMIC FEASIBILITY OF ALTERNATIVES The following economic anal ys is is organized by methy l bromide critical use application regions. Reader, please note that in this study net revenue is calculated as gross revenue minus operating costs. This is a good measure as to the direct losses of income that may be experienced by

the users. It should be noted that net revenue does not represent net income to the users. Net income, which indicates profitability of an operation of an enterprise, is gross revenue minus the sum of operating and fixed costs. Net income should be smaller than the net revenue measured in this study . We did not include fixed costs because these costs are often d ifficult to measure and verify

.USA CUN13 SOIL Peppers Open Field Page 11 of 16

Summary of Economic Feasibility The economic anal ys is of pepper application s compared data on the yi elds, crop prices, revenues and costs of using methy l bromide or alternative pest control regimens . This was done in order to estimate impacts on pepper growers with the decreasing availability of methy l bromide . The alternatives identified as technicall y feasible ( in cases of low pest infestation 1 ) for Georgia, Florida, and the Southeaster U.S. for peppers are: (a) Iodomethane and (b ) the Georgia 3

- Way Method, which includes 1,3

- dichloropicrin with chloropicrin followed b y metam s odium

. The economic reviewers then anal yz ed crop budgets for pre

- plant sectors to determine the likel y economic impact if methy l bromide were unavailable. Various measures were used to quantify the impacts, including the following: (1) Loss per Hecta re. For crops, this measure is closely tied to income. It is relatively eas y to measure, but may

be difficult to interpret in isolation. (2) Loss per Kilogram of Methyl Bromide . This measure indicates the value of methy l bromide to crop production. (3 ) Loss as a Percentage of Gross Revenue. This measure has the advantage that gross revenues are usually

eas y to measure, at least over some unit, e.g. , a hectare of land or a storage operation. However, high value commodities or crops may provide high re venues but may also entail high costs. Losses of even a small percentage of gross revenues could have important impacts on the profitability of the activity

. (4) Loss as a Percentage of Net Operating Revenue . We define net cash revenues as gross revenue s minus operating costs. This is a very good indicator as to the direct losses of income that may be suffered by

the owners or operators of an enterprise. However, operating costs can often be difficult to measure and verify

. (5) Operating Profit Margin . We define operating profit margin to be net operating revenue divided by

gross revenue per hectare. This measure would provide the best indication of the total impact of the loss of methy l bromide to an enterprise. Again, operating costs may be diffic ult to measure and fixed costs even more difficult, therefore fixed costs were not included in the anal ys is. These measures represent different way s to assess the economic feasibility of methy l bromide alternatives for meth yl bromide users, who are pepper producers in this case. Because producers (suppliers) represent an integral part of an y definition of a market, we interpret the threshold of significant market disruption to be met if there is a significant impact on commodity suppliers using meth yl bro mide. The economic measures provide the basis for making that determination. GEORGIA , FLORIDA, AND THE S OUTHEASTERN U.S.

1 Itshould be noted that the USG does not request methy l bromide for use in areas of low to moderate pest pressure. Only cases where key

pests are present at moderate to high levels require meth yl bromide for pest pressure.USA CUN13 SOIL Peppers Open Field Page 12 of 16

In Georgia, Florida, and the Southeastern U.S., the Georgia 3

- Way on spring plantings and iodomethane are considered technically an d economically

feasible alternatives to methy l bromide, although some limitations exist. Referring to Table 5, 6, and 7, the loss of net revenue using the Georgia 3

- Way is negligible in Florida and the Southeastern U.S. in comparison to methy l bromide, whi le gains in net revenue are expected in Georgia. Although no gains in gross revenue are expected when using iodomethane, losses in net revenue are negligible. One drawback to the Georgia 3

- Way is that y ield losses are expected in fall plantings, with studi es in Georgia’s application show a 50% yi eld loss. These losses are not expected when iodomethane is used. The Georgia 3

- Way also cannot be used on peppers that are grown in karst soils since it contains 1,3

- D; however, iodomethane can be, making methy l br omide unnecessary for pepper production in areas with karst topograph y. Note that data describing Georgia and Florida pepper production are based on double cropping production practices.

T ABLE 5 . G EORGIA : E CONOMIC I MPACTS OF M ETHYL B ROMIDE A LTERNATIV ES GEORGIA PEPPER ME THYL BROMIDE GEORGIA 3
-

WAY: SPRING APPLICATION GEORGIA 3
-

WAY: FALL APPLICATION IO D OMETHANE PRODUCTION LOSS (%) 0% 0% 50% 0% PRODUCTION PER HECTARE 5,797 5,797 2,899 5,797 * PRICE PER UNIT (US$) $12 $12 $12 $12 = GROSS REVENUE PER HECTARE (US$) $67,907 $67,907 $33,954 $67,907

- OPERATING COST PER HECTARE (US$) $55,279 $41,211 $41,211 $56,433 = NET REVENUE PER HECTARE (US$) $12,629 $26,696

- $7,258 $11,475 LOSS MEASURES * 1. LOSS PER HECTARE (US$) $0

- $14,067 $19,886 $1,154 2. LOSS PER KILOGRAM OF ME THYL BROMIDE (US$) $0

- $151 $214 $12 3. LOSS AS A PERCENTAGE OF GROSS REVENUE (%) 0%

- 21% 29% 2% 4. LOSS AS A PERCENTAGE OF NET OPERATING REVENUE (%) 0%

- 111% 157% 9% 5. OPERATING PROFIT MARGIN (%) 19% 39%

- 21% 17% * Interpret the loss measures with caution. Negative numbers presented in rows indicating a “loss” should be interpreted as a “gain”. Positive numbers can be interpreted as losses. T ABLE 6 . F LORIDA : E CONOMIC I MPACTS OF M ETHYL B ROMIDE A LTERNATIVES FLORIDA PEPPER
- DOUBLE CROP ME THYL BROMIDE GEORGIA 3
-

WAY IO D OMETHANE PRODUCTION LOSS (%) 0% 0% 0% PRODUCTION PER HECTARE 4,379 4,379 4,379 * PRICE PER UNIT (US$) $12 $12 $12USA CUN13 SOIL Peppers Open Field Page 13 of 16

= GROSS REVENUE PER HECTARE (US$) $51,756 $51,756 $51,756

- OPERATING COST PER HECTARE (U S$) $48,934 $49,030 $49,522 = NET REVENUE PER HECTARE (US$) $2,822 $2,726 $2,234 LOSS MEASURES * 1. LOSS PER HECTARE (US$) $0 $96 $588 2. LOSS PER KILOGRAM OF METHYL BROMIDE (US$) $0 $1 $6 3. LOSS AS A PERCENTAGE OF GROSS REVENUE (%) 0% 0% 1% 4. LOSS AS A PERCENTAGE OF NET OPERATING REVENUE (%) 0% 3% 21% 5. OPERATING PROFIT MARGIN (%) 5% 5% 4% * Interpret the loss measures with caution. Negative numbers presented in rows indicating a “loss” should be interpreted as a “gain”. Positive numbers can be interpreted as losses.

T ABLE 7 . S OUTHEASTERN USA ( EXCEPT G EORGIA ): E CONOMIC I MPACTS OF M ETHYL B ROMIDE A LTERNATIVES SOUTHEASTERN USA (EXCEPT GEORGIA)

PEPPER ME THYL BROMIDE GEORGIA 3
-

WAY IO D OMETHANE PRODUCTION LOSS (%) 0% 0% 0% PRODUCTION PER HEC TARE 2,965 2,965 2,965 * PRICE PER UNIT (US$) $8 $8 $8 = GROSS REVENUE PER HECTARE (US$) $24,463 $24,463 $24,463

- OPERATING COST PER HECTARE (US$) $21,955 $22,051 $22,543 = NET REVENUE PER HECTARE (US$) $2,508 $2,412 $1,920 LOSS MEASURES * 1. LOSS P ER HECTARE (US$) $0 $96 $588 2. LOSS PER KILOGRAM OF METHYL BROMIDE (US$) $0 $1 $6 3. LOSS AS A PERCENTAGE OF GROSS REVENUE (%) 0% 0% 2% 4. LOSS AS A PERCENTAGE OF NET OPERATING REVENUE (%) 0% 4% 23% 5. OPERATING PROFIT MARGIN (%) 10% 10% 8% * I nterpret the loss measures with caution. Negative numbers presented in rows indicating a “loss” should be interpreted as a “gain”. Positive numbers can be interpreted as losses.USA CUN13 SOIL Peppers Open Field Page 14 of 16

8. RESULTANT CHANGES TO REQUESTED EXEMPTION QUANTITIES The USG has appli ed an aggressive transition rate , which is reflected in the nomination amount and deta iled in Table 8

. TABLE 8 . N OMINATION A MOUNT :

So ut he as t Pe ppe r Geo rg ia P ep pe r F lo rida P ep pe r S ec to r To ta l / Av er ag e Qua nt ityR eq ue ste d for 2 012: Am ount ( kgs) 34 1 94 7 27 ,0 77 28 ,3 66 Qu an tit y Re co mm

en ded by MBT OC /T EAP fo r 2012 : Am ount ( kgs) 34 1 94 7 27 ,0 77 28 ,3 65 Am ount ( kgs) 34 1 94 7 27 ,0 77 28 ,3 65 Are a (h a) 61 22 0 1, 09 4 1, 37 5 Ra te 6 4 25 21 Tr an sition

f ro m 2012 Baseli

ne Ad ju st ed Val ue Pe rc en ta ge ( %) -80 % -8 0% -8 0% -8 0%
Am ount ( kgs) 

### 68 189 5,4 15 5,673 Are a (h a) 0. 5 1 36 38 Ra te 150 15 0 15 0 150 SE CT OR

Qu an ti ty Ap pr ove d by Pa

rt ies f or 2012:

Qu an tity Re qui re d for 2013 Nomi na ti on : PEPPER



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