4

Technological and Biological Changes and the Future of Pest Management

As a biological process, the agricultural enterprise is profoundly affected by the physiological, biochemical, ecological, and genetic attributes of the organisms involved. Anthropogenic activities within and beyond the agricultural enterprise have the potential to affect agriculture through their effects on the biology of organisms, including those in production (crops and livestock) and pests associated with them. In this chapter, we examine technological changes that have introduced new sources of mortality for pest organisms and evaluate their potential role in contributing to pest management in the future. We also examine how human activities have effected changes in the ecological milieu within which pest-crop interactions take place and the selection regime under which pests evolve, and we relate the changes to prospects for pesticide use in the future.

GLOBAL PESTICIDE MARKET TRENDS

Chemical-Pesticide Market

The global chemical-pesticide market is about $31 billion. It is a mature market with a growth of about 1-2% per year. Breakdowns by product category, crop, and by category for region for global and US markets are shown in Table 4-1 (Agrow 1998) and Table 4-2 (Aspelin and Grube, 1999).



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The Future Role of Pesticides in US Agriculture 4 Technological and Biological Changes and the Future of Pest Management As a biological process, the agricultural enterprise is profoundly affected by the physiological, biochemical, ecological, and genetic attributes of the organisms involved. Anthropogenic activities within and beyond the agricultural enterprise have the potential to affect agriculture through their effects on the biology of organisms, including those in production (crops and livestock) and pests associated with them. In this chapter, we examine technological changes that have introduced new sources of mortality for pest organisms and evaluate their potential role in contributing to pest management in the future. We also examine how human activities have effected changes in the ecological milieu within which pest-crop interactions take place and the selection regime under which pests evolve, and we relate the changes to prospects for pesticide use in the future. GLOBAL PESTICIDE MARKET TRENDS Chemical-Pesticide Market The global chemical-pesticide market is about $31 billion. It is a mature market with a growth of about 1-2% per year. Breakdowns by product category, crop, and by category for region for global and US markets are shown in Table 4-1 (Agrow 1998) and Table 4-2 (Aspelin and Grube, 1999).

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The Future Role of Pesticides in US Agriculture TABLE 4-1 Global Chemical Pesticide Market (1997 Sales) Product Sales, billions of dollars % Herbicides 14.7 47.6 Insecticides 9.1 29.4 Fungicides 5.4 17.5 Others 1.7 5.5 Total 30.9 100.0 Crop Sales, billions of dollars % Fruits, nuts, vegetables 6.5 21.0 Home and garden, turf, and ornamentals 5.25 17.0 Oil crops 1.75 5.7 Cotton 1.5 4.9 Cereals 4.0 12.9 Maize 2.5 8.1 Rice 2.5 8.1 Sugarbeet 1.0 3.2 Other 5.9 19.1 Total 30.9 100.0 Region Sales, billions of dollars % North America 9.2 29.8 Western Europe 7.8 25.2 East Asia 7.1 23.0 Latin America 3.7 12.0 Rest of World 3.1 10.0 Worldwide Total 30.9 100.0 Source: Agrow, 1998. Biopesticide Market Biologically based pesticide products (also known as biorational products) generate sales of about $700 million per year (including transgenic crops) worldwide. The market for these products is expected to expand by over 20% over the next 5 years. Table 4-3 shows the sales figures for the global biopesticide market in the last few years and projected for 2004. These pesticides comprise living microorganisms or pheromones (animal-produced chemicals that serves as stimuli for behavioral responses in other individuals of the same species). The most successful biorational

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The Future Role of Pesticides in US Agriculture TABLE 4-2 US Chemical Pesticide Market by Category (1997 Sales) Product Sales, billions of dollars % Herbicides 6.8 57.5 Insecticides 3.6 29.9 Fungicides & Other 1.5 12.6 Total 11.9a 100.0 aThis estimate for the US pesticide market is larger than other estimates for 1997 sales because it includes expenditures for some nonagricultural pesticide applications. This includes applications by owner/operators and custom/commercial applicators to industry, commercial and governmental facilities, buildings, sites, and land; and homeowner applications to homes and gardens, including lawns. Source: Aspelin and Grube, 1999. TABLE 4-3 Global Biopesticide Market (in millions of dollars).   Year   Market 1997 1998 1999 2004a % change (1999-2004) Microbial 65 66 67 72 7.5 Transgenic plants 405 429 455 610 34.1 Miscellaneous 180 184 188 208 10.6 Total 650 679 710 890 25.4 aestimated Source: Eppes, in press. pesticides are the Bacillus thuringiensis-based (Bt-based) microbial pesticides with current sales of about $140 million. More than 40% of Bt sales are in the United States. Rapid growth of Bt-based biopesticides is occurring as replacements of competitive chemical products that are being banned or phased out in environmentally sensitive areas, in consumer and export markets in which concerns about food residue is high, and in organic food production. The Industry Agricultural-Chemical Companies Of sales revenue of agricultural-chemical companies 7–13% is spent on pesticide research and development. The 1997 pesticide sales of leading agrichemical companies are ranked in Figure 4-1.

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The Future Role of Pesticides in US Agriculture FIGURE 4-1 Pesticide sales of top 10 agrochemical companies, 1997. Source: Panna 1998. Major trends in the agrichemical industry today include Consolidation of multinational agrichemical companies. Rapid growth of transgenic-crop markets. Vertical integration of agrichemical firms with seed companies and food processors. Increase in generic pesticides (because chemicals are going off patent) Increase in consolidation and transformation of input distributors. Despite those trends, the different companies are investing their resources differently in a wide variety of technologies. Table 4-4 shows which companies are pursuing the technologies. Table 4-5 highlights the foci of the companies' pesticide programs. Major consolidation of multinational companies is under way. A wave of consolidations took place in the 1980s. In the 1990s, the merger of Sandoz and Ciba (forming Novartis) raised the bar even higher, creating an agrichemical company $2 billion larger than the next largest ($5 billion versus $3 billion). Business leaders continue to create empires that can rival Novartis in size. For example, AgrEvo has merged with Rhone-

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The Future Role of Pesticides in US Agriculture TABLE 4-4 Comparison of Technologies Pursued by the Pesticide Industry Technology Companies Products Crops/Pest Date of Entry Transgenic seeds Monsanto/D&PL Bollgard (Bt) Cotton / bollworm and budworm 1996   Monsanto/Dekalb Roundup Ready Soybean / weeds 1996   Calgene/Stoneville BXN Cotton / weeds 1996   Monsanto/D&PL Roundup Ready Cotton / weeds 1997   Ciba, Dekalb, N.King Bt corn Corn / borer 1996, 1997   Mycogen, Pioneer Bt corn Corn / borer 1996, 1997   AgrEvo Liberty Link Canola / weeds 1996   Dekalb, Ciba, Pioneer Liberty Link Corn / weeds 1997   Asgrow Virus resistance Vegetables and fruits / viruses 1996 Synthetic chemicals Bayer Admire/Provado Multiple crops / sucking insects 1995   AgrEvo Applaud Cotton / whitefly 1996   Valent/Sumitomo Knack Cotton / whitefly 1996   Rohm & Haas Confirm/Intrepid Cotton, vegetables and fruits / caterpillars 1996, 1997   American Cyanamid Pirate / Alert Cotton and vegetables / caterpillars 1998   Rhone Poulenc Regent Cotton, corn, rice, and vegetables / sucking insects 1998, 1995   Zeneca Abound, Heritage Multiple crops / fungicide 1997   BASF Allegro Multiple crops / powdery mildew 1997   Novartis Bion Vegetables / viruses and fungi 1997

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The Future Role of Pesticides in US Agriculture Natural products Thermo Trilogy Align Vegetables / caterpillars 1995   Thermo Trilogy Neemix Greenhouse / mildew 1995   Dow Tracer Cotton and vegetables / caterpillars 1997   Novartis Proclaim Cotton and vegetables / caterpillars 1997 Biocontrol agents AgraQuest LAGINEX Rice and noncrops / mosquito 1997   Mycotech Mycotrol Fruits and vegetables / whitefly 1996   Thermo Trilogy Spod-X Cotton / caterpillars 1996   Ecogen AQ10 Grapes / powdery mildew 1996   Thermo Trilogy SoilGard Greenhouse-potting mix / fungi 1996   BioWorks BioTrek Field crops- / root rots 1996, 1997   Eden Biosciences Gray Gold Greenhouse / gray mold 1996, 1997   Liphatech/Gustafson UW85 Cotton and alfalfa seed / fungi treatment 1997   Abbott DiTerra Multiple crops / nematodes 1997   Abbott Trichodex Grapes / gray mold 1997   Abbott Spherimos Rice and noncrops / Mosquito larvae 1997

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The Future Role of Pesticides in US Agriculture TABLE 4-5 Company Pesticide Programsa   Pesticidal Natural Products Bacillus thuringiensis Living Fungi or Bacteria Entomopathogenic Nematodes Insect Viruses Transgenic Crops Pheromones Synthetic Chemicals Abbott 0 *** * 0 0 0 0 0 AgraQuest *** 0 * 0 0 0 0 0 AgrEvo 0 0 * 0 0 *** 0 *** Am Cy * 0 0 0 0 0 0 *** BASF * 0 0 0 0 0 * *** Bayer 0 0 0 0 0 * 0 *** BioWorks 0 0 *** 0 0 0 0 0 Consep 0 0 0 0 0 0 *** 0 Dominion 0 0 *** 0 0 0 ** 0 Dow ** 0 0 0 0 *** 0 *** DuPont 0 0 0 0 * *** 0 *** Ecogen 0 *** ** ** 0 0 *** 0

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The Future Role of Pesticides in US Agriculture EcoScience 0 0 ** 0 0 0 0 0 Ecosoil Systems 0 ** *** 0 0 0 0 0 Eden Biosciences *** *** *** 0 0 0 0 0 FMC 0 0 0 0 0 0 0 *** Mosanta 0 0 0 0 0 *** 0 *** Mycogen 0 * 0 0 0 *** 0 0 Mycotech 0 0 *** 0 0 0 0 0 Novartis ** 0 0 0 0 *** 0 *** Pioneer 0 0 0 0 0 *** 0 0 RhonePoulec 0 0 0 0 0 * 0 *** SafeScience *** 0 0 0 0 0 0 0 Rohm and Haas 0 0 0 0 0 0 0 *** Sumitomo * 0 0 0 0 0 0 *** Thermo Trilogy ** *** ** ** ** 0 *** 0 Zeneca * 0 0 0 0 *** 0 *** a=little or no activity *=minor focus **=major focus ***=main focus of program

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The Future Role of Pesticides in US Agriculture TABLE 4-6 Sales of Transgenic Crops and Chemical Pesticides, 1995-1997   Sales, millions of dollars     1995 1996 1997 Change, 1996-1997, % Herbicides 14,280 15,050 14,700 −2.33 Insecticides 8,750 8,745 9,100 4.06 Fungicides 5,855 5,895 5,400 −8.40 Plant-growth regulators and others 1,305 1,325 1,700 28.30 Total pesticides 30,190 31,015 30,900 −0.37 Total transgenic crops 75 235 650 176.60 Sources: Cultivar, 1997; Eppes, in press. Poulenc to form Aventis (about the size of Novartis), and Novartis and AstraZeneca have merged to form Syngenta. Another major trend in the market is the rapid growth of biotechnology products compared with chemical pesticides, stimulating the vertical integration of agrichemical companies with seed and food companies. These biotechnology products, chiefly transgenic-crop seed with pest-control attributes and herbicide tolerance, are dramatically changing market shares of agrichemical firms in soybeans (herbicide tolerance), cotton (insecticides for bollworm and budworm control), and corn (herbicide tolerance and insecticides for corn-borer control). Table 4-6 shows the total sales of transgenic crops relative to chemical pesticides in 1995–1997. Agrichemical companies have invested billions of dollars to develop or access crop seed genetically engineered for caterpillar and disease control and tolerance to herbicide sprays. Monsanto is the industry leader, with reported investment that totals more than $8 billion to acquire Calgene, Delta PineLand, Cargill, Ecogen, DeKalb, Agracetus, Asgrow, Holden's, and PBI. Other examples are Dow's purchase of Mycogen and Pioneer's $30 million deal with Mycogen to obtain nonexclusive access to Bt genes for genetically engineered corn seed. Novartis and Mycogen partnered to launch a transgenic corn seed containing a Bt gene for corn borer control. A strategic alliance composed of Mycogen, Rhone Poulenc, and Dow was formed to develop crops with input and output traits. Other shifts in the industry include the purchase of Plant Genetic Systems for $750 million by AgrEvo (Hoechst-Schering-Roussel), DuPont's purchase of 20% of Pioneer for $1.7 billion, and the acquisition of Mogen by AstraZeneca to complement its share of seed companies (now called Advanta).

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The Future Role of Pesticides in US Agriculture There is still heavy reliance on traditional chemicals for weed control, in part because of the widespread reliance on genetically engineered glyphosate-resistant crops. Other companies still depend on agrichemicals for primary income. These same multinationals are also entering into agreements with food companies to develop crops with value-added traits. Many agrichemical companies are shifting resources away from inputs (pesticides) and input traits (pesticidal genes) to output traits. Examples of these traits are Improvements in feed value (for example, corn seed engineered with phytase enzyme or high levels of lysine, an essential amino acid). Higher-quality product (for example, fresh tomatoes with longer shelf-life or paste tomato with lower water content). Greater nutritional value (for example, rice with higher vitamin A content). The industry is investing billions of dollars in genomics to characterize the genes of entire organisms. Industrial leaders expect that advances in genomics will lead researchers to the precise location and sequence of genes that contain valuable input and output traits. A shift in R&D resources from input to output traits probably would have a large impact on the future of plant protection. Will the cycle of innovation on the input side continue? Because of the high investment required for development of chemical pesticides and transgenic crops, will large agrichemical and life-science firms focus primarily on crops with large markets (such as row crops)? Whether companies will develop pesticides and input traits for minor use crops remains an open question. A trend in agrichemical industry is the movement of many chemical pesticides off patent. As these chemicals become generic pesticides, manufacturers lose their monopolies on them. Large agrichemical companies are therefore aligning themselves with generic suppliers of chemical pesticides to reduce erosion in sales of the products that were formerly proprietary products. Several agrichemical companies have purchased outright or partially own generic companies. DuPont, for example, has entered into a joint venture and is now a 51% owner of Griffin. In May 1998, BASF purchased MicroFlo for the same reasons. As more products become generic, profit margins erode for distributors, as well as for manufacturers. In response, distributors are consolidating and becoming “basic manufacturers” through acquisitions of proprietary products. For example, Gowan Corp., Griffin, and United AgriProducts (UAP) have taken this approach. The consolidation of distributors can take two paths. In the first, a large distributor can acquire many smaller distributors. UAP, a practitio-

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The Future Role of Pesticides in US Agriculture ner of this approach, is now as large as or larger than many basic manufacturing agrichemical companies and has revenues of $2 billion. The second path is the formation of consortiums of smaller distributors into a group with more influence than individual firms. In California, for example, a group of distributors joined to form a consortium called Integrated Agricultural Producers (IAP). The consolidation of distribution and agrichemical companies has created some concern for farmers. They are worried that they will have fewer choices and that prices will go up. However, the advent of the Internet is tearing down old structures, and the entire distributor-manufacturer relationship is expected to change for the benefit of farmers, who will be able to order all their products directly over the Internet. One of the most important trends for agrichemical companies is the growing shift towards the development and registration of reduced-risk pesticides. In 1993, the Environmental Protection Agency (EPA) began a program of expedited review of what were classified as reduced-risk pesticides. Expedited reviews can reduce the time to registration by more than half (EPA 1998). Since the introduction of this program, the number registered as reduced-risk pesticides has steadily increased. Table 4-7 lists almost 20 reduced-risk pesticides that have been registered since 1994. For a pesticide to be considered of reduced risk, it must have at least one or more of the following characteristics (EPA 1997a): It must have a reduced impact on human health and very low mammalian toxicity. It must have toxicity lower than alternatives (0.01–0.1 as much). It displaces chemicals that pose potential human health concerns or reduces exposures to mixers, loaders, applicators, and re-entry workers. It reduces effects on non-target organism (such as birds, honey bees, and fish). It exhibits a lower potential for contaminating groundwater. It lowers use or entails fewer applications than alternatives. It has lower pest-resistance potential (that is, it has a new mode of action). It has a high compatibility with integrated pest management (IPM). It has increased efficacy. The Food Quality Protection Act (FQPA) went further and mandated expedited registration of reduced-risk pesticides that could be expected to pose less risk to human health and the environment than other pesticides that meet existing safety standards. Since the enactment of FQPA, 62% of the 48 active ingredients registered have been considered “safer”

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