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California Eyes Novel Risk-Based Pesticide Fees to Help Budget

Jan. 20, 2021, 11:00 AM

California wants to change the way it charges fees on pesticide sales by switching from a flat fee to a tiered system that increases based on health risks associated with exposure.

The plan would update the state’s fee structure for the first time in 16 years and nearly double the costs for high-risk pesticides, such as those containing 1,3-dicloropropane and metam-potassium, which are among the most popular in the state to treat insects and weeds. Both come with a poison warning label.

When fully deployed, the tiered assessment should bring in $45 million annually to help the state Department of Pesticide Regulation fund programs related to pest management, enforcement, and air monitoring.

It also would speed up the state’s efforts to move away from the use of toxic chemicals on farms, orchards, and home gardens, Department of Pesticide Regulation Director Val Dolcini said in a phone interview.

“This kind of investment will make for a safer and more sustainable environment generally,” Dolcini said.

States assess fees in varying ways and some increase charges if there are specific concerns, including threats to groundwater, but California appears to be the first to want to set tiered levels, said Leo Reed, president of the Association of American Pesticide Control Officials who works in the Office of the Indiana State Chemist.

“It is a novel approach and hopefully it does some good,” Reed said.

Trailer Bills

Gov. Gavin Newsom (D) included the change in his proposed budget plan submitted to the legislature earlier this month. The Senate and Assembly will weigh in and make changes, but must approve by June 15 the spending plan, which requires Newsom’s approval.

The pesticide component would be executed through trailer bills, which set the policies to fulfill budget commitments.

If approved, the increases would be phased in starting next fiscal year and are based on the the signal words the U.S. Environmental Protection Agency requires on pesticide labels. The first tier signal words are “none” and “caution,” followed by “warning,” and then “danger” or “danger/poison.”

The current flat fee assessed on all pesticide sales is 21 mills, which is equal to $0.021. If approved, fees on pesticides would range from 21 to 35 mills starting next year and top out at 26 to 45 mills depending on the tier, according to the proposal.

Looking at past sales data, 68% of registered pesticides in the state would be in the lowest tier, followed by 14% in the second tier, and 23% in the highest, or “danger” tier, Dolcini said.

Industry Surprised

Industry groups said the change took them by surprise, will increase costs, and punishes agriculture for using pesticides that are required in some cases by counties where crops are exported.

“The pesticide issue and the mill tax quite honestly blindsided agriculture,” said Roger Isom, who is president and chief executive of Western Agricultural Processors Association and the California Cotton Ginners and Growers Association.

Korea and Egypt, for instance, require methyl bromide treatments on walnut and cotton, respectively, he said. That ingredient requires a danger and poison label. Pesticide applicators will most certainly pass along the increase.

“We’re definitely going to get hit here,” Isom said.

Isom said it was too soon to talk about lawsuits and agriculture hoped to discuss issues with the state during the budget process.

“There isn’t a farmer that wants to use pesticides,” he said.

‘Deterrent Factor’

The update was long overdue and welcome, but not perfect, said Jane Sellen, co-director of Californians for Pesticide Reform.

“We really hope it will have a deterrent factor,” she said.

Sellen cautioned that the proposal needed some refining. EPA signal words only address acute or short-term exposure, not chronic or long-term. Also not included are pesticides that are harmful to the environment, such as neonicotinoids, which post a threat to bees and other pollinators.

“We think there’s many other categories they could be using as well,” she said.

More than 13,000 products have active registrations with the Department of Pesticide Regulation and 12,632 of those have a designated signal word, Abbott Dutton, an agency spokeswoman, said in an email.

Dolcini said it was too soon to know how the final proposal will look and he was unsure if carve-outs would be allowed, such as in the case of export requirements, or if other changes will be made.

“There will be a lot of time for good debate,” he said. “There might be things that are tweaked.”

To contact the reporter on this story: Emily C. Dooley at edooley@bloombergindustry.com

To contact the editors responsible for this story: Chuck McCutcheon at cmccutcheon@bloombergindustry.com;

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