A driving factor behind pesticide regulation in Canada and the United States is the desire to protect consumers from harmful residues on food. The Food Quality Protection Act (FQPA) was unanimously passed by the U.S. Congress in 1996 and hailed as a landmark piece of pesticide legislation. It amended the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Federal Food, Drug, and Cosmetic Act (FFDCA), and focused on new ways to determine and mitigate the adverse health effects of pesticides. The FQPA is different from past legislation; it is based on the understanding that pesticides can have cumulative effects on people and that policy should be designed to protect the most vulnerable segments of the population. Recent research has investigated some of the impacts the FQPA’s provisions – many of which have yet to be fully implemented – may have on growers and consumers.Agricultural and Food Policy,

Cash, Sean B.

Sunding, David L.

Swoboda, Aaron

Zilberman, David

English

Research Papers in Economics

Current Agriculture, Food & Resource Issues S.B. Cash et al.
                                                                                                                                             ￿ 74
to protect the most vulnerable segments of the population. Recent research has
investigated some of the impacts the FQPA’s provisions – many of which have yet to be
fully implemented – may have on growers and consumers.
Implications and Conclusions
nder the FQPA, the U.S. Environmental Protection Agency is required to review
classes of agricultural pesticides to assess the risks posed by aggregate use of these
chemicals. Such cumulative risk assessments may result in reduced exposure to harmful
substances but may also impose substantial costs on growers and consumers by removing
common pesticides from use. The case of organophosphate use in California provides a
vehicle for examination of these aspects of regulation.
When a pesticide ban has economic consequences that raise the market price of fruits
and vegetables, consumers will respond by consuming less of the affected goods. Since
increased consumption of fruits and vegetables is related to a decreased incidence of
several common diseases, there may be dietary health effects that detract from the public
health benefits of such bans. The magnitude of these countervailing risks is sufficiently
large that more lives may be lost than saved by some regulatory actions.
The FQPA’s Main Provisions
The publication of the National Research Council (United States) report Pesticides in the
Diets of Infants and Children (1993) showed that pesticide residues have disproportionate
effects on children. Children eat and drink more as a percentage of their body weight than
do adults; they also consume fewer types of food. These dietary differences account for a
large part of the exposure differences between adults and children. The committee also
found that pesticides have qualitatively different impacts on children because children are
growing at such a rapid pace. This concern for the differential impact pesticides have on
children is reflected in regulatory changes required by the FQPA. For instance, the “10X”
provision of the FQPA requires an extra tenfold safety margin for pesticides that are
shown to have harmful effects on children and women during pregnancy.
The FQPA has also resolved the “Delaney Paradox” created by the Delaney Clause of
the FFDCA. Prior to the FQPA, the Delaney clause prohibited the use of any carcinogenic
pesticide that became more concentrated in processed foods than the tolerance for the
fresh form. This was supposed to protect consumer health, yet it had the paradoxical
effect of promoting other non-carcinogenic pesticides that created other (possibly more
serious) health risks for consumers. The FQPA standardizes the tolerances for pesticide
residues in all types of food and looks at all types of health risks.
The federal Environmental Protection Agency (EPA) must now ensure that all
tolerances are “safe”, defined as “a reasonable certainty that no harm will result from
aggregate exposure to the pesticide” (United States Environmental Protection Agency,
UCurrent Agriculture, Food & Resource Issues S.B. Cash et al.
                                                                                                                                             ￿ 75
1999). Historically, pesticide exposure was regulated through single pathways, either
through food or water or dermal exposure. Now the EPA must consider all pathways of
pesticide exposure, including cumulative exposure to multiple pesticides through a
common mechanism of toxicity. Even though two pesticides may be sufficiently
differentiated that they are used on different crops to control different pests, they can have
similar health effects on people. The result of the new requirement is that, in some
instances, pesticide tolerances for seemingly different insecticides must be regulated
together based on their cumulative effects.
The Costs of Banning Organophospates
When the FQPA was first signed into law, 49 Organophosphate (OP) pesticides were
registered for use in pest control throughout the United States and accounted for
approximately one third of all pesticide sales (Casida and Quistad, 1998). OP insecticides
are highly effective insect control agents because of their ability to depress the levels of
cholinesterase enzymes in the blood and nervous systems of insects. It has been suggested
that while dietary exposure to a particular OP may be low, the cumulative effects of
simultaneous exposure to multiple OP insecticides could cause some segments of the U.S.
population to exceed acceptable daily allowances (Byrd, 1997). The need to reduce the
risk from these aggregate effects is specifically addressed in the FQPA and is one of the
reasons the EPA has chosen OP pesticides for the first cumulative risk assessment.
Due to their popularity and widespread use, many in the agricultural community are
worried about FQPA implementation resulting in increased restrictions on OP pesticides.
By the time the EPA released the Revised OP Cumulative Risk Assessment in 2002, 14
pesticides had already been canceled or proposed for cancellation; 28 others have had
considerable risk mitigation measures taken (United States Environmental Protection
Agency, 2002). Risk mitigation may include the following:
• limiting the amount, frequency, or timing of pesticide applications;
• changes in personal protective equipment requirements (for applicators);
• ground-/surface-water safeguards;
• specific use cancellations;
• voluntary cancellations by the registrant.
Economic theory suggests that these increased restrictions and cancellations from the
eventual implementation of the FQPA will result in a reduced supply of the commodities
that currently rely on OP pesticides for pest control. This reduced supply will result, in
turn, in higher prices for consumers and a lower quantity sold. In order to estimate the
possible welfare effects on the state of California, University of California researchers
conducted a study on the effects of a total OP pesticide ban on 15 crops. The estimated
price and quantity changes are presented in table 1.Current Agriculture, Food & Resource Issues S.B. Cash et al.
                                                                                                                                             ￿ 76
Results of the economic analysis suggest that the total loss to producers and
consumers in California from banning all OP use will be approximately $200 million.
There is significant uncertainty as to the final level of OP restrictions that might be
imposed, so this is only an order-of-magnitude estimate of the effects. However, these
effects represent only about 2 percent of the total revenue generated by the 15 crops
studied in California. While the overall effects seem small, they may be more intense in
some segments than others. The researchers found that the degree of impact rests on the
effectiveness of alternative pest control strategies producers have to choose from when
faced with an OP ban. In some cases, OP pesticides have no close substitute, and
cancellation will have larger effects. For instance, the losses in broccoli, one of the crops
most sensitive to an OP ban, are driven by the lack of an alternative insecticide to treat
cabbage maggot.
Table 1  Price and Production Changes from Organophosphate Ban
Change in price Change in production*
Crop
(Percentage)
California Rest of U.S.
Alfalfa 0.93 -184,845 48,743
Almonds 0.48 -1,356 n/a
Broccoli 16.00 -111,285 2,083
Carrots >0.01 -5 -3
Cotton 1.69 -1,148 -19,214
Grapes 0.05 -999 -265
Lettuce, head 0.36 -12,778 3,864
Lettuce, leaf 0.46 -1,510 -148
Oranges 0.32 -40,517 -28,137
Peaches & nectarines 0.32 -1,561 -2,016
Strawberries 0.26 -508 -743
Tomatoes, fresh 0.03 -388 -223
Tomatoes, processed 0.16 -10,849 114
Walnuts 0.58 -1,091 n/a
* Change in tons
Source: Metcalfe et al. (2002).Current Agriculture, Food & Resource Issues S.B. Cash et al.
                                                                                                                                             ￿ 77
Prices and Nutrition
As illustrated above, it is generally true that removing a pesticide from the production
process will result in an increase in the price of the treated commodity. If consumers
respond to the increased prices by reducing consumption of the affected fruits and
vegetables (and perhaps shifting consumption to less nutritious foods), they may suffer a
loss of health benefits associated with the change in consumption. Scientific evidence is
accumulating for a protective effect for fruits and vegetables in prevention of cancer,
coronary heart disease, ischemic stroke, hypertension, diabetes mellitus, diverticulosis,
and other common diseases. The level of protection suggested by these studies is often
quite dramatic. A recent review of several studies found that “the quarter of the population
with the lowest dietary intake of fruits and vegetables compared to the quarter with the
highest intake has roughly twice the cancer rate for most types of cancer” (Ames, Gold
and Willett, 1995).
Negative health outcomes from a change in dietary behavior may offset the direct
health benefits of a pesticide ban, such as reduced exposure to carcinogenic residues on
produce. A recent study by Cash (2003) investigates the possible magnitude of such
offsetting health effects. Using data on what over 18,000 people eat, and previous findings
on how people respond to changes in the price of fruits and vegetables, the author
simulated some of the health effects of a small increase in produce prices. Specifically,
Cash examined the effects of an increase of 1 percent in the price of broad categories of
fruits and vegetables on coronary heart disease and ischemic stroke, two of the most
common causes of death in the United States. The results are reported in table 2.
For a 1 percent increase in the average price of all fruits and vegetables, the
simulations indicate an increase of 6,903 cases of coronary heart disease and 3,022
ischemic strokes. In order to offset these 9,925 cases in a population of 253.9 million
people, a pesticide action would have to prevent 1 in 25,580 cancers. This is almost four
Table 2  Cases of Coronary Heart Disease and Ischemic Stroke Induced in the U.S.
Population by a 1 Percent Increase in the Price of All Fruits, All Vegetables, or
All Fruits and Vegetables
Disease All fruits All vegetables
All fruits
and vegetables
Coronary heart disease 1,442 2,951 6,903
Ischemic stroke 744 1,482 3,022
Total 2,186 4,433 9,925
Source: Cash (2003).
Results reported are the simulation means from a series of Monte Carlo trials (n=100,000).Current Agriculture, Food & Resource Issues S.B. Cash et al.
                                                                                                                                             ￿ 78
times as protective as the mean risk of pesticide uses that were banned between 1975 and
1989 (Van Houtven and Cropper, 1996). Although these results can not be applied
directly to most individual pesticide bans – which typically affect the price of only a few
crops – the study shows that pesticide regulations that reduce relatively small risks at high
cost may actually have a negative impact on overall consumer health. Furthermore, the
research also suggests that low-income consumers may be the hardest hit by the negative
health impacts of price-induced dietary changes, whereas high-income consumers tend to
reap the greatest direct benefits from reduced residue exposures.
Discussion
conomic theory tells us that regulatory intervention is justified in the presence of
market failures. In the case of pesticide residues on food, the two most salient
sources of failure are externality and incomplete information. The externality arises
because the costs associated with dietary exposure to pesticide residues are not in the
main borne by the producers who make the application decisions. The incomplete
information problem arises because a consumer cannot easily determine the level of
pesticide residue on produce. Even if the level were readily apparent, the nature of the
risks posed by these residues is not well understood.
The problem illustrated in the previous section is that regulatory decisions that are
based on narrow criteria may give rise to other undesirable outcomes. When the target risk
is small and the costs of reducing it are relatively large, there is a strong possibility that
the net effect of a regulatory effort may be negative. Although consideration of such
tradeoffs may be repulsive when the metric is in “body counts”, the reality is that it is
impossible for government to eliminate all risks to our health and well-being. A standard
of discretion must be applied, whether it be benefit-cost analysis, established levels of
acceptable risk, or some other measure.
The Food Quality Protection Act is a wide-reaching law that will have a large impact
on U.S. agriculture in the coming years. While an increased awareness of the effects of
agricultural chemicals on vulnerable groups – especially infants – is a welcome addition
to the nation’s pesticide laws, regulators need to take into account the potentially high
costs of additional pesticide bans on both producers and consumers. These costs can be
measured not just in dollars, but also in dietary changes that may have negative health
consequences. In implementing the regulations required by the FQPA, The EPA should
keep in mind that this most recent overhaul of the pesticide laws specifically grants the
agency discretion in setting standards when use of the pesticides prevents other risks to
consumers or avoids “significant disruption in domestic production of an adequate,
wholesome, and economical food supply” (United States House of Representatives,
1996).
ECurrent Agriculture, Food & Resource Issues S.B. Cash et al.
                                                                                                                                             ￿ 79
The authors are among those who, everything being equal, would prefer to consume
fewer pesticide residues in their own diets. Yet too narrow of a regulatory focus that
ignores economic responses and countervailing health risks is misguided, as the net effect
on public health could be negative. This point is especially pertinent when one considers
that certain pesticide uses have been canceled by the EPA on the basis of consumer risks
that were less than one in a million over a lifetime of exposure. In many cases, other less
costly interventions such as labeling requirements and food preparation education
campaigns may prove to be more effective means of achieving consumer safety with
regard to agricultural chemical use.
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Byrd, D.M. 1997. Goodbye pesticides? The food quality protection act of 1996.
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Cash, S.B. 2003. Essays on the economics of protecting health and the environment.
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Casida, J. and G. Quistad. 1998. Golden age of insecticide research: past, present, or
future? Annual Review of Entomology 43: 1-16.
Metcalfe, M., B. McWilliams, B. Hueth, R. van Steenwyk, D. Sunding, A. Swoboda and
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Indirect Effects of Pesticide Regulation and the Food Quality Protection Act

Indirect Effects of Pesticide Regulation and the Food Quality Protection Act

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