DPR leader gets tough with Wal-Mart over pesticide mill assessments

It was a tough-talking director of the California Department of Pesticide Regulation (DPR) celebrating her first anniversary on the job by addressing the annual Western Plant Health Association meeting at Squaw Valley, Calif.

Mary-Ann Warmerdam reiterated her boss, Gov. Arnold Schwarzenegger's support of a “vigorous, robust and vibrant” California agriculture, but left little doubt she was also going to be tough on those who violate California's strict and what some consider onerous environmental laws governing pesticide use.

One of her first get-tough enforcement targets has been not on the agricultural side, but the urban/consumer side, specifically big box retailers who have not been paying mandatory mill assessments on over-the-counter sales of insecticides, herbicides and other products like agricultural retailers and wholesalers are required to pay.

She estimated these retailers have not been paying “conservatively” $4 million annually due DPR, which uses the mill assessment money to monitor chemical residue on food and other regulatory programs.

Her first target was the world's largest retailer, Wal-Mart, which DPR found was not only not paying its mill assessment, but selling pesticides not registered for use in California.

Initially, Wal-Mart was “uncooperative” with DPR's enforcement efforts. She said this was due to a “lack of understanding” about mill assessment (2.1-cent-per-dollar fee at the wholesale level). However, when reports about this issue began to circulate, Wal-Mart called back quickly with a pledge to “fulfill its obligation.”

Internet sales

Now, she is going after the $30 million in annual Internet sales of pesticides in California that have been skirting the mill assessment.

In an effort to bolster DPR's efforts to collect mill assessment from major retailers, the governor signed Assembly Bill 1011 which requires major retailers who sell consumer pesticides to register as pesticide brokers. Carried by Assembly Member Barbara Matthews, D-Tracy, the legislation will help (DPR) track over-the-counter sales of various pesticides.

DPR estimates that nearly $1 billion of consumer pesticides are sold in California yearly. But unlike agricultural pesticide dealers who must be licensed, consumer retailers have not been required to register as brokers, and many pesticide sales may go unreported.

While ag wholesalers are pleased that DPR is going after uncollected DPR dues because it will take pressure off raising the mill assessment for ag wholesalers, another aspects of AB 1011 was not as popular.

The legislation also “streamlined” DPR's pesticide registration process by enacting a business reform first proposed under the Governor's California Performance Review.

Under the new law, brand name and generic manufacturers will use a new process to share data for product registration. This was not popular with some manufacturers since registration data from brand-name registrants now must be shared with generic product markets.

Warmerdam told WPHA this will make more products available and “this will be good for California farmers,” she said. Acknowledging that this has not been popular with some WPHA members, she added, “ultimately you will find it will be good for your business as well.”

Warmerdam also has asked that county ag commissioners step up enforcement activities by specifically looking into areas of “weakness” in the pesticide use and reporting system. She said DPR will continue to rely on county ag commissioners to enforce DPR regulations, but they will now be “rewarded” for correcting weaknesses in the system.

Farm worker safety

One of those stepped up enforcement areas will be in farm worker safety, where she says the department has a “very clear goal of zero tolerance” for pesticide incidents involving farm workers.

“To say accidents will happen…to say accidents are OK will not be OK any more,” she said.

Shortly before the WPHA annual meeting, DPR issued a “commentary” from Warmerdam citing the department stepped up enforcement effort resulting in almost $700,000 in fines to farmers, ag retailers for safety violations.

“Since Gov. Schwarzenegger's administration took office, the DPR and its local partners have stepped up efforts to protect farm workers and others threatened by pesticide misuse. As we crack down on violators who do business unfairly, we also support the vast majority of growers and applicators who play by the rules,” she said in the commentary.

“DPR expects more such actions to be filed throughout the state as we pursue a vigorous enforcement policy. Our message is simple: If you put people at risk by violating pesticide rules, you will pay a steep price.

“And we will underscore this message by seeking news coverage of such violations, because public notice has its own deterrent value.

“Our motives are far from punitive. Most growers and applicators are conscientious businesspeople who work hard and play by the rules. Though California leads the nation and the world in agriculture and pesticide regulation, a relatively small number of violators pose a threat to our hard-earned reputation. So a vigorous pesticide enforcement program serves the best interests of our people, our environment, and our agricultural economy.”

Warmerdam, who grew up in Hanford, Calif., was appointed to head DPR last fall by Schwarzenegger. Prior to joining DPR, Warmerdam served as a manager of state governmental relations for the Pacific Gas & Electric Co., where her responsibilities included watershed and hydroelectric issues.

Fertilizer side

WPHA is the merger of the California pesticide and fertilizer industry associations. Ford West, new president of the Fertilizer Institute, Washington, D.C., did not have any better news for the fertilizer side of the business.

He noted USDA reported farmers paid the highest price ever for fertilizer last spring and he does not see that prices going the other way, particularly in wake of hurricanes Katrina, Rita and now Wilma in the Gulf of Mexico.

Congress spent four years developing a federal energy policy and two months after passing legislation, hurricane Katrina hit, which served to point out “evidently Congress did not understand” the impact Gulf of Mexico oil and natural gas production had on the nation's fuel supply. The gulf supplies 19 percent of nation's natural gas and 28 percent of crude oil. Hurricanes disrupted that major supply of energy and energy prices have soared.

West says there were 6,000 oil and gas platforms in Gulf before the hurricanes hit. Many were damaged and many simply disappeared into the ocean.

The skyrocketing price of natural gas has shut down 19 ammonia plants in the U.S. because they can no longer compete with foreign nitrogen imports made with cheaper natural gas.

“Thirty five percent of the nation's electricity is produced with natural gas. Eight year ago there was no electricity produced with natural gas,” said West.

This has come about because of the federal Clean Air Act, which virtually precluded use of other energy sources for electricity generation.

“We need to use all energy resources. We have to get back to a rational federal energy policy,” said West. Without that, Americans can only expect to pay more for energy each year.

Compounding the energy problems is growing worldwide fertilizer consumption; 10 percent increase N use, 13 percent more phosphorus and a 25 percent potash use increase.

“I get a lot of phone calls from retailers asking what is the long term outlook for fertilizer prices. I tell them it is difficult to assess,” admitted West.

The only thing he is almost convinced about is that prices will continue to go up for American energy consumers.

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