BURDEN REDUCTION FROM THE PROPOSED EXPANSION OF CROP GROUPING PROGRAM Prepared by: BIOLOGICAL AND ECONOMIC ANALYSIS DIVISION OFFICE OF PESTICIDE PROGRAMS July 1, 2019 U.S. Environmental Protection Agency 1200 Pennsylvania Ave, NW Washington, DC 20640 Executive Summary ........................................................................................................................ 3 Chapter 1 Introduction ............................................................................................................... 4 1.1 Background ........................................................................................................................... 4 1.2 Tolerances ............................................................................................................................. 5 1.3 Crop Groups and Representative Commodities .................................................................. 5 1.4 Problem Statement ................................................................................................................ 5 1.5 Affected Community ............................................................................................................ 6 1.6 Summary of Impacts ............................................................................................................. 7 Chapter 2 Proposed Changes ..................................................................................................... 7 Chapter 3 Method ...................................................................................................................... 8 3.1 Estimating the Value of the Revised Crop Grouping ........................................................... 8 3.2 Data ....................................................................................................................................... 9 Chapter 4 Analysis & Results of Cost Savings Estimation ..................................................... 13 4.1 Herbs Cost Savings ............................................................................................................. 14 4.2 Spices Cost Savings ............................................................................................................ 15 4.3 Results of Cost Savings Estimation .................................................................................... 17 4.4 Cost and Negative Impacts of the Rule............................................................................... 18 4.5 Characterizations and Uncertainties ................................................................................... 18 Appendix ....................................................................................................................................... 20 2 Executive Summary EPA is proposing that the current “Crop Group 19: Herbs and Spice Group” be separated into two new crop groups, “Crop Group 25: Herb Group” and “Crop Group 26: Spice Group.” The new Crop Group 25 will have 317 commodities, and the new Crop Group 26 will have 166 commodities. The current Herbs subgroup (19A) has 37 commodities. The current Spice subgroup (19B) has 31 commodities. This is a burden-reducing regulation. Crop grouping saves money by permitting the results of pesticide residue studies for some crops, called representative crops, to be applied to other, similar crops in the group. The regulation creates two new groups out of one and expands the groups to include more crops. Once final, EPA expects these revisions to promote greater use of crop groupings for tolerance-setting purposes, both domestically and in countries that export food to the United States. This is the fifth in a series of planned crop group updates expected to be prepared over the next several years. The proposed herb group will still have four representative commodities: Fresh basil and dried basil will continue to be representative commodities, but fresh chives and dried chives will be replaced with fresh mint and dried mint. Although the number of representative crops will stay the same, the number of residue field trials will change. The current number of residue field trials needed per commodity is three, for a total of 12 for an herb subgroup tolerance. Under the proposal, 16 residue field trials will be needed for a group tolerance because fresh mint and dried mint need five field trials, not three. The current spice subgroup has three options for representative crops (black pepper, celery seed and dill seed), but only needs residue trials on two of the crops (black pepper, and either celery seed or dill seed) for a tolerance on the spices subgroup. The proposed spice group will have two options for representative crops (celery seed and dill seed), but will only need a residue trial for one of these two crops for a group tolerance. The number of field trials needed will be reduced from six to three. Herb growers, spice growers, and registrants are anticipated to be the biggest beneficiaries of this rulemaking. It is expected that growers will benefit from this rule via more registered pesticide products for small scale commodities like herbs and spices, and registrants will benefit from reduced data generation costs. The estimate of cost savings from creating the new, separate herb group and spice group is $55.1 million annually. The estimate of cost savings from creating the new herb group and expanding the crops within is around $38.4 million annually. The estimate of cost savings from the new spice group is around $16.7 million annually. The total estimated cost savings from the rule should be considered an overestimate because the method used here implicitly assumes that all of the crops in the group have a field trial that is replaced by field trials of the representative crops. However, many of the herb and spice crops would never have been the subject of a tolerance petition that required a field residue trial. 3 Chapter 1 Introduction EPA is proposing revisions to its pesticide tolerance regulations for crop grouping, which allow the establishment of tolerances for multiple related crops based on data from a representative set of crops. The data in question are primarily for use in the exposure analysis of dietary risk assessment. EPA establishes tolerances for each pesticide on each crop or crop grouping based on the potential risks to human health posed by that pesticide. A tolerance is the maximum permissible residue level established for a pesticide in raw agricultural produce and processed foods. EPA is proposing to revise one commodity definition, add three new commodity definitions, and amend the current herbs and spices crop group currently included in Crop Group 19. The 68 crops/commodities in current “Crop Group 19: Herbs and Spices Group” will be separated into two new crop groups, “Crop Group 25: Herb Group” and “Crop Group 26: Spice Group.” The new Crop Group 25 will be expanded to include 317 commodities, and the new Crop Group 26 will be expanded to include 166 commodities. The members of the new Crop Group 25 are proposed based on similarities of growth habits as well as herbs being marketed as either fresh or dried leaves, similar pest problems, sources of essential oil, geographical distribution, lack of animal feed items, comparison of established tolerances, and for international harmonization purposes. The members of the new Crop Group 26 are proposed based on similarities of growth habits and the specific edible parts of the plant that are exposed similarly to pesticides, geographical distribution, lack of animal feed items, comparison of established tolerances, and for international harmonization purposes. This is a burden-reducing regulation. Crop grouping saves money by permitting the results of pesticide exposure studies for one crop to be applied to other, similar crops. The regulation expands two crop groups to include more crops. Because of this expansion, it is expected that registrants will benefit from reduced data generation costs and that herb and spice growers will benefit from this rule via more registered pesticide products. Having additional pesticides for use may help growers to lower costs (e.g. due to more effective pesticides helping growers to manage weeds or other pests) or increase yields (e.g. due to less competition from weeds or other pest damage reducing the quality or quantity of commodities harvested), which could lead to increases in grower incomes and/or decreases in prices for consumers if producer savings get passed on. It will also save EPA resources since there will be fewer studies overall for Agency scientists to review for all commodities in these new groups. The potential cost savings to EPA are not estimated in this economic analysis. Once final, EPA expects these revisions to promote greater use of crop groupings for tolerance- setting purposes, both domestically and in countries that export food to the United States. This is the fifth in a series of planned crop group updates expected to be prepared over the next several years. 1.1 Background EPA establishes maximum residue limits (MRLs) or tolerances for pesticide chemical residues in or on food commodities under section 408 of the FFDCA (21 U.S.C. 346a). EPA establishes 4 pesticide tolerances only after determining that aggregate exposure to the pesticide is considered safe. The U.S. Food and Drug Administration (FDA) and the U.S. Department of Agriculture (USDA) enforce compliance with tolerance limits. 1.2 Tolerances A tolerance is the maximum permissible pesticide