Challenges expected to grow for ag chemical retailers

Challenges are not going to disappear for the nation's agricultural retailer.

Former Californian Jim Thrift, now vice president of regulatory policy and corporate relations for the Agricultural Retailers Association in Washington, D.C., said challenges are not only not going away, but will become greater over the next five years than in the last decade.

The reports by Thrift and other executives of groups representing agribusinesses were sobering to California Plant Health Association members from California, Arizona and Hawaii at CPHA annual convention recently in Monterey, Calif.

Thrift told of introduced legislation that would put ag retailer locations in the same category as chemical plants. The bill by New Jersey Sen. Jon Corzine would also place ag retailer locations under the auspices of the Environmental Protection Agency. Thrift said this is unnecessary, unwarranted and would represent another costly layer of regulations for ag retailers.

Thrift said ag retailers should be under the new Homeland Security Department.

ARA is battling the proposed legislation by encouraging retailers to do site vulnerability studies and show legislators that than they can police themselves.

Spray drift regulations for pesticide labels continue to flounder within the EPA after more than five years of study. ARA and other organizations are attempting to draft boilerplate language that can ensure continued use of pesticides.

The growing organic market and labeling of biotechnology foods are two other issues that pose a challenge, according to CropLife America president Jay Vroom.

Mainstream agriculture defeated a mandatory GMO-labeling initiative in Oregon a year ago against heavy odds. When the campaign started on the initiative, polls showed it passing by a 70 to 80 percent plurality.

It was defeated by a 70-30 margin after a concentrated effort by agriculture.

“That victory sent a strong message to those opposed to biotech foods that they had better think again before taking another shot at the biotechnology,” said Vroom. However, he added, “we are not out of the woods yet” on the labeling issue.

Issue in Canada

It is a hot issue in Canada right now, but Vroom said it looks like the government there will make biotechnology labeling voluntary, a position CropLife America supports.

“If organic food producers want to claim their products are non-biotech, non-GMO, that is a fair way to go,” said Vroom.

However, CropLife will challenge that organic is non-chemical with a targeted communication campaign to let consumers and legislators know there is healthy alternative to organic.

“Organic is no longer a mom and pop industry,” said Vroom, citing a 10-page advertorial in a recent edition of the New York Times Sunday magazine promoting organic foods. It cost more than $1 million for that campaign, estimates Vroom.

Organic promoters are also “getting away with big lies” in saying organic farmers do not use chemicals. He called the claims “besmirching” traditional agriculture and the ag chem and fertilizer industries. CropLife plans to counter than claim with its own public relations campaign.

The U.S. is the third largest user of nitrogen fertilizers behind China and India, and second in world production behind China.

However, the U.S. is forced to import almost 35 percent of its nitrogen products because it is becoming too expensive to produce nitrogen fertilizers in the U.S., according to Ford West, senior vice president of The Fertilizer Institute.

“Forty-one percent of the nitrogen fertilizer produced in the world is in world trade,” he said. And, China holds the key to prices and supply. “When China sneezes, everybody in the industry gets a cold,” he said.

High natural gas

Eighty percent of the cost of nitrogen is natural gas, and the U.S. leads the world in natural gas prices. Current U.S. prices are seven times what they are in Russia.

“When the price of natural gas goes up in the U.S, production of N goes down in this country,” he said. It fundamentally changes the source of N in the U.S.

The demand for natural gas is not expected to decline since it is environmentally the fuel of choice for generating electricity. Ten years ago very little natural gas was used for electricity. Coal was more widely used then, but environmental regulations have forced power generators to switch to natural gas.

West expects the situation to remain volatile until Congress adopts a national energy policy.

Security in the ag chem and fertilizer industry has become a greatly heightened issue after recent terrorist attacks, especially in the fertilizer industry. Terrorists used fertilizer products to bomb the federal building in Oklahoma City and earlier the World Trade Center.

West said The Fertilizer Institute staff now spends half its time working on security issues.

“There are 18,000 people in the new Homeland Security agency, and security is just beginning for the ag chem industry,” predicted West.

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