### Dr. Paul Mitchell and Dr. Pete Nowak



# Value of Neonicotinoids in North America

# Meeting Goals
• To overview some of the results from our Neonicotinoid Benefits Assessment at a broad level • Understand EPA’s and PMRA’s additional informational needs 

## • The assessment has generated many good questions • Clarify some of the EPA’s and PMRA’s questions 

## • Receive feedback about the approach and information provided

### A comprehensive evaluation of the economic and societal benefits of neonicotinoid insecticides to North American agriculture, as well as 

### residential and urban landscapes Conducted by fourteen independent PhD academics through AgInfomatics, LLC  Focus: clothianidin, dinotefuran, imidacloprid and thiamethoxam Commissioned by Bayer CropScience, Syngenta and Valent U.S.A. 

### Corporation, with support from Mitsui Agrochemicals, Inc.



# About The Study

### Analytical framework guided by counterfactual logic. Multiple forms of value would be found in response to the question: W hat 

### would happen if neonicotinoids were not available?

 North American Agriculture  U.S. Turf & Ornamentals



# Research StrategyAgriculture



# Neonicotinoid Benefits Study Reports Turf & Ornamental

A seventh agriculture report, An Economic Assessment of the Benefits of Nitroguanidine Neonicotinoid Insecticides in the United States and Canada was submitted January, 2015. All reports submitted to EPA

### 1. Human health concerns 2. Accelerate pest resistance 

### 3. Reduction in yields & quality 4. Higher operating costs 5. Loss of effective pest control 6. Loss of beneficial insects & IPM 7. Impacts on local communities 8. Media report emotion, not science 

## Recurring Themes 

# Listening Sessions

# Case Study: Neonicotinoid Use in Florida Citrus Economic and Societal Impact of Citrus Greening to Florida; 2006 - 2011 • Loss of more than 8,000 jobs • Loss of $4.5 billion in output • Potential loss of 76,000 remaining jobs • Potential loss of current $9 billion annual economic impact • Irreparable harm: re - start Florida citrus highly unlikely after loss •

Neonicotinoid Protection from HLB Infection Citrus Greening Disease (HLB)
• Huanglongbing (HLB), is an invasive bacterial disease spread by the Asian citrus psyllid • Irreversible • Renders fruit unmarketable altogether • Destroys trees and ultimately orchards • Y oung citrus trees are most vulnerable to HLB and most important to orchard viability

• Only neonicotinoids provide optimal management of HLB • Neonicotinoid insecticides are minutely targeted, especially supporting the youngest trees, and sparingly applied • Neonicotinoid insecticides merely repel the Asian citrus psyllid from the saplings • They are the primary tools to protect young citrus trees from HLB infection • Alternative pesticides, such as organophosphates or pyrethroids, are significantly less effective • Alternatives require frequent foliar sprays of significantly higher quantities• Early- season control of wireworms, thrips and plant bugs • Critically important to IPM programs, either as a seed treatment or foliar spray • Increases health and vigor of the plants when applied early • Reduces spraying • Reduces seeding rates and costs • Increases yields Importance of the Cotton Industry to Farming Communities

Neonicotinoid Use in Cotton • More broad spectrum chemicals will be used • Loss of beneficial insects • More foliar sprays for secondary pest control • Significantly higher farmgate costs • Reduced yields • Likely a tipping point away from cotton production • Re - entry costs across entire production chain prohibitive on ROA / ROI basis • $25 billion in products and services annually • Approximately 200,000 jobs nationwide • Intensively managed, highly specialized and complex activity chain to marketable product • Greater economic impact to local communities than almost any other crop • Benefits local land values, specialty equipment sales, auto/truck sales, banking, and insurance industries as well as ginning, shipping, warehousing, brokering, etc. Cotton Production Without Neonicotinoids 

# Case Study: Neonicotinoid Use in Mid
-South Cotton

# Neonicotinoids Applied To 56% Of Total U.S.

Acres Planted To Commodity Crops

# Seed Treatments Account For 98% Of Acres 

# Treated With Neonicotinoids In These Crops0

20 40 60 80 100 120 140 160

Neonicotinoids Pyrethroids Organophosphates All Other Classes Scouted, Not Treated Higher Seeding

Density Product Acres (1,000,000) 2010-2012 Average Non-Neonicotinoid Scenario 

# Reallocation Impact on Insecticide Use

# Reallocation of Insecticide Use
The total pounds of insecticide active ingredients applied to these crops would increase from 13.0 million pounds to 28.2 million pounds, a 116 percent increase.0.00 2.00 4.00 6.00 8.00 10.00 12.00

Sorghum Corn Soybeans Winter Wheat Cotton Spring Wheat Cost Impact ($/acre) Average Cost per Neonicotinoid Base Acre 

###  Projected net cost increase of $848M per year Increased spending on insecticides = $157M 

### Increased spending on applications = $383M Increased spending on foliar scouting = $210M Increased spending on seeding/replanting = $97M 

# Cost Impacts0.00

1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00

Corn Sorghum Cotton Soybeans Spring Wheat Winter

Wheat Cost Impact ($/acre) Average Cost per Planted Acre 

# Cost Impact per Planted Acre

##  United States: 500 corn & 500 soybean growers Canada: 120 corn, 120 soybean & 500 canola growers  Focus on pest management practices used  Importance of non - pecuniary factors in pest management Value of different insect management practices 

# Farmer Telephone Survey to Assess Value

# Would Growers Use Seed Treatment If Same Varieties Were Available Without Neonicotinoids?

Corn Soybean

## Please think carefully about all the reasons why you chose to plant corn with an insecticidal seed treatment in 2013 and what else you 

## could have done to manage insects instead of using an insecticidal seed treatment. Compared to these alternatives, what additional value would you say using an insecticidal seed treatment provided to you per acre of treated corn ?  Not more than $5 per acre  More than $5, but not more than $ 10 per acre  More than $ 10, but not more than $ 15 per acre 

###  More than $ 15, but not more than $25 per acre  More than $25 per acre 

# Sample Value Question

## United States -------- Canada -------- 

## Corn Soybean Corn Soybean Canola Bt Corn $19.78 $20.05 Seed Treatment $13.38 $11.93 $12.02 $14.53 $12.85 

## Soil Insecticide $12.92 Foliar Insecticide $14.17 $13.48 $10.06 

# Value Comparison - $/Treated Acre

## Control Method U.S. Canada Total Seed Treatment $1,130 $301 $1,431 

## Bt Corn $1,248 $56 $1,304 Foliar Insecticide $249 $57 $306 Soil Insecticide $175 --- $175 

# Total Grower Value (US$ Millions)

Neonicotinoid seed treatments are the most valued insect control method based on total 

# acres treated in North America

###  Data from replicated small plot field experiments

 1,550 studies generating 3,300+ observations of yield with and 

### without neonicotinoid  ~1,000 studies generating 1,600+ observations of yield with neonicotinoid versus insecticidal alternative 

###  An observation is a paired comparison of average yield by treatment ( NNi vs UTC or NNi vs non - NNi Insecticide)  Corn, soybean, wheat, cotton, sorghum, potato, tomato 

###  Publications: Journals, Arthropod Management Tests, online extension and research reports  Registrants: conducted by universities and outside researchers 

# Yield Meta-Analysis0 2 4 6 8 10 12 14 16 18 20 Count

Yield Benefit 0 20 40 60 80 100 120 Count

Yield Benefit N=718 N=216 

### Soybean: Neonicotinoids vs UTC Soybean: Neonicotinoid vs Non-Neonicotinoid



# Yield Impacts for Soybeans

### Corn: Neonicotinoids vs UTC Corn: Neonicotinoid vs Non-Neonicotinoid



# Yield Impacts for Corn

0 10 20 30 40 50 60 70 Count

Yield Benefit 0 10 20 30 40 50 60 70 Count

Yield Benefit N=774 N=429-2% 0% 2% 4% 6% 8% 10% 12%

SC IN VA LA TN NE IA NC AR OH MI WI GA IL MO MS MN SD ON 5 15 17 41 56 34 48 5 66 55 19 97 7 52 12 27 48 23 76 Average Yield Benefit

-10% -5% 0% 5% 10% 15%

MI MN SD IA MS WI IL OH AR NE TN LA

8 26 19 28 6 24 24 8 19 12 17 9 Average Yield Benefit 

### Average soybean yield benefit for neonicotinoid treatments relative to untreated control treatments by state/province Average soybean yield benefit for neonicotinoid treatments relative to non - neonicotinoid insecticide treatments by state 

# Example of Geographic Yield Variation
- Soybeans

# Significance of a 2.8% Yield Benefit in Soybeans

Based on previous yield histogram, and these yield and price assumptions, on average the farmer would earn 

### $16.02 – $7.76 = $8.26/A. Moreover, a farmer would earn back at least the $7.67/A cost of the seed treatment 59% of the time. 

###  2013 U.S. average soybean yield = 44bu/A  2013 U.S. average marketing price = $13 bu  2.8% X 44 bu X $13 = $16.02/A  Minus average seed treatment cost = $7.67 

## The Context 

## A Quick Calculation0%

10% 20% 30% 40% 50% 60% 70% 80%

Soybean Wheat Cotton Corn Sorghum Tomato Canola Potato % Yield Benefit

0% 2% 4% 6% 8% 10% 12% 14%

Soybean Cotton Wheat Corn Sorghum Canola Potato Tomato* % Yield Benefit Crop vs UTC vs non-NNi Corn 17.4% 4.4% Soybean 3.6% 0.2% Wheat 16.8% 2.4% Cotton 16.9% 0.7% Sorghum 20.1% 5.9% Canola 34.8% 9.7% Potato 71.3% 12.6% Tomato 23.2% * 

# Yield Benefits by Crop

## Aggregate field - level yield & cost impacts to the market level Allow crop prices and acreage to equilibrate to the new supply 

## and profitability conditions and estimate “surplus”  Multi- market equilibrium model (AGSIM) for corn, soybean, 

## wheat, cotton and sorghum Single market Partial Equilibrium model with exports: U.S. potato and tomato, Canadian corn, soybeans and canola 

# Market Level Analysis

### Market Surplus Low High

US Commodity Crops Consumer Surplus -$4,245 -$4,596 Farm Income 

### $351 $426 Net Surplus -$3,894 -$4,170 US Specialty Crops Consumer Surplus -$102 -$116 

### Farm Income -$33 -$45 Net Surplus -$135 -$161 US Total Consumer Surplus -$4,347 -$4,712 Farm Income $318 $381 Net Surplus -$4,029 -$4,331 Canada Commodity Crops Consumer Surplus -$284 -$568 Farm Income $135 $291 Net Surplus -$149 -$276 

# Value of Neonicotinoids (US$ Millions)

## Value of neonicotinoids in U.S. ranges US$4.0 to $4.3 Billion annually, mostly for corn 

##  Main impact: lower food prices for livestock, dairy, & eggs Value of neonicotinoids in Canada ranges US$150-$275 Million annually, mostly for canola 

# Market Level Analysis Results

## Without Neonicotinoids :  Corn price increase $0.25/bu  W heat price increases $0.22/bu  Total cropped acres increase 350,000-400,000 as land is 

## moved into crop production from non -crop uses  Corn acres increase 500,000 acres 

##  Conservation Reserve Program that retires highly erodible and environmentally sensitive land from crop production loses 225,000-250,000 acres 

# Market Level Results

# Turf and Ornamentals

# A National Survey of Homeowners Choice Experiment methods used to measure homeowner attribute preferences and willingness to pay for managing pests in the homescape .  Flowers & Shrubs – 6,086 contacted, 5,866 willing to participate, 5,800 with flowers or shrubs in yard, 2,837 applied insecticides, and 2,698 completed survey.  Lawn – 4,882 contacted, 4,664 willing to participate, 4,624 had lawns, 2,678 applied insecticides, and 2,268 completed survey.  Tree – 8,731 contacted, 8,530 willing to participate, 8,461 with trees in yard, 3,041 applied insecticides, and 2,506 completed survey.• Effectiveness of control (very high, high and medium )

• Number of applications required ( 1 time, 2 to 3 times, 4 or more times )
• Safety to humans, pets and wildlife (excellent, very good, or good )
• Safety to bees (high, medium, or low)
• Prevention or curative control, or both
• Sold in combination with fertilizer (yes and no )
• Flexibility in application methods ( soil, foliar spray, or both)
• Speed of control (fast (in hours), medium (in days), or slow (in weeks)
• Cost per year. 

# Attributes of Insecticides

# Summary of Values for Attributes

DIY = Do It Yourself, Pro = Professional, Both = DIY and Pro methods of application

# The Assessment of Professionals Survey of members of AmericanHORT, PLANET, Society of American Florists, and the Tree Care Industry Association with 750 viable responses. Main area of business for respondents was trees (25%), greenhouse (24%), lawn (19%), nursery (15.5%), and landscape ornamentals (15.5%). 14% said there were no acceptable alternatives to neonicotinoids, 59% said that there are not enough acceptable alternatives, and 27% said there was enough or more than enough acceptable alternatives to neonicotinoids.

# Importance of Factors in Insecticide Selection (%) Factor Not

Important Somewhat

Important Important Very

Important Insecticide cost 6.4 42.7 37.7 13.2 Protecting quality of the plant 0.5 1.6 20.3 77.7 Consistent pest control 0.7 3.4 22 73.9 Convenience 3 25.5 47.6 23.9 Flexibility in application method 7.7 27.4 39.1 25.8 Pollinator safety 6.6 18.1 36.1 39.2 Safety to applicator 0.5 4.3 21.6 73.9 Safety to customer 1.8 4.1 22 72.8 Management of resistant pests 1.8 12.5 41.8 43.9Business Factor Large Decrease Decrease Stay the Same Increase Large

Increase Don’t

Know Labor (records, training, applications) 0.3% 0.5% 28.2% 41.4% 25.5% 4.1% More frequent applications of alternatives 0.3% 1.9% 15.6% 39.1% 38.5% 4.6% Customer satisfaction 9.9% 36.6% 31.7% 6.3% 3.6% 11.8% Ability to manage pest resistance 9.5% 34.4% 29.3% 9.5% 4.5% 12.8% Ability to practice IPM 5.8% 26.3% 39.5% 13.4% 7.9% 7.1% Income Impact Greenhouse Nursery Lawn Landscape Ornamentals Trees Loss would reduce income 50% 65% 68% 43% 52% Loss would not impact income 42% 27% 21% 44% 31% Loss would increase income 8% 8% 11% 13% 16%



# Impacts on Business

# Case Study
- Whitefly  Neonicotinoids critical to managing Silverleaf white fly in greenhouses  Loss of plant material  Increased use of older insecticides & worker exposure  Faster development of pest resistance  Inability to control whitefly with spread to other crops  Disruption of plant trade  Higher production costs The Emerald Ash Borer (EAB) is a destructive invasive that is

destroying ash trees.  There are three options; 1) remove trees now, 2) remove dead trees, or 3) treat to control EAB.  Local governments and homeowners face high costs with options 1 & 2 (e.g., $1500 per tree).  Naperville, IL has demonstrated that EAB can be managed in costeffective way with citizens. 

# Case Study
- EAB

###  Without neonicotinoids the removable option would have been followed because alternatives tend to be more expensive and may require certified applicators. 

###  Involving citizen groups in learning about the options was critical to the final decisions by elected leaders.  The citizens have maintained property values and the environmental 

### amenities associated with a urban forest. 

# Lessons From Naperville Chinch bugs destroy St. Augustinegrass in Florida and southern U.S., and they have developed resistance to other insecticides.  There are few if any other options for controlling this pest, and significant costs would accrue to the lawn care industry and homeowners.  There are safety concerns for both customers and applicators if neonicotinoids are lost. 

# Case Study – Chinch Bug

# Summary  The Green Industry is an important part of our economy, and professionals, homeowners, and local citizens have informed us of the vital value of neonicotinoids to that industry.  The Green Industry is a service industry and is dependent on customer satisfaction. Contributing to this relation is one of the highest values of neonicotinoids.  Neonicotinoids have multi-dimensional value.

## 1. Neonicotinoids add several billion dollars to the North American economy, and benefit entire communities, not just farmers. 2. Safety and satisfaction emerged as common perceived benefits for many of those who were part of these studies 3. Neonicotinoids protect crop yield and quality, and in some cases prevent catastrophic damage 

## 4. The loss of neonicotinoids would force growers to rely on fewer older classes of insecticides, which would raise resistance concerns, and could more than quadruple total pounds applied 5. Negatively impact integrated pest management practices due to non target effects on beneficials with increased foliar applications 

# Take Home Messages

## 6. We used data triangulation to examine the agronomic, socioeconomic, and environmental benefits in a comprehensive 

## assessment, with academic papers in preparation 7. We have generated many good questions and several ideas for future 

## research and analysis 

# Take Home Messages