An Analysis of EPA Pesticide Regulation

Pesticides are at least partly responsible for the large increases in agricultural productivity that the United States has enjoyed since World War II. However, their use may pose risks to the environment—to ground or surface water or to wildlife habitat—as well as to workers who apply them and to consumers who eat pesticide residues on food. It is the job of the U.S. Environmental Protection Agency (EPA) to regulate pesticide use to manage these risks. Specifically, the EPA decides whether a pesticide can be used and, if so, what residues may safely remain on foods. According to the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), the agency makes the first decision—whether to allow a pesticide to be used—by assessing whether the pesticide imposes "unreasonable adverse effects on the environment." Once it approves a pesticide for use, the EPA must act to "prevent any unreasonable risk to man or the environment, taking into account the economic, social, and environmental costs and benefits of the use of [the] pesticide." This implies that a pesticide should be banned only if the risks of its use outweigh the benefits.

In the past the EPA has been criticized for its decisions to ban or not ban pesticide uses. Environmental groups cite the agency's failure to ban pesticides, such as dicofol, that pose risks to wildlife. At the same time, some economists allege that the agency pays too much attention to pesticide risks to farmworkers and consumers. They claim that the EPA has reduced the risk of cancer to these groups only at very high cost. In the same vein, farmers have been quick to point out that banning a pesticide can be very costly to them, especially when few substitute pesticides are available.

These criticisms raise several questions about the EPA's recent decisions regarding pesticides. First, in deciding whether or not to ban a pesticide, has the agency balanced the health risks of pesticide use against the benefits, as it is required to do under the law? Have the costs of banning a pesticide been considered as well as the risks, or does the EPA always ban pesticides when risks of cancer to farmworkers or consumers exceed some threshold level, regardless of how much such a ban costs? In the area of risk regulation, the notion that substances posing high risks to any one person should always be banned—even if the cost is high—is a common one. The other side of this argument is that substances posing low risks should never be banned, even if it is inexpensive to do so. Has the EPA acted in accordance with this argument in regulating pesticides, or has it balanced costs against benefits at all risk levels?

Second, has the EPA been responsive to the interests of environmental groups in regulating pesticides? When organizations such as the National Audubon Society or the Environmental Defense Fund comment publicly in support of cancelling a registered use of a pesticide, do their comments increase the chances that the EPA will ban the pesticide? In light of the history of U.S. pesticide regulation, the EPA's responses to such comments are particularly interesting. Before the EPA was created, pesticides were regulated by the U.S. Department of Agriculture. Transfer of responsibility for pesticide regulation to the EPA was prompted in part by the view that the Department of Agriculture was not sufficiently responsive to environmental and consumer groups.

Third, what other political considerations have influenced pesticide regulation? Has participation in the regulatory process by growers' organizations or their representatives decreased the likelihood that a pesticide will be banned? Are pesticide decisions sensitive to political concerns, given that the administrator of the EPA is a political appointee?

In an attempt to answer these questions, researchers at Resources for the Future and the University of Maryland undertook a study of the EPA's decision to ban or not ban each of the 245 registered food uses of the nineteen cancer-causing, food-use pesticides that went through the agency's special review process between 1975 and 1989 (see table 1). The EPA cancelled 39 percent of these food uses. The study explains the pattern of cancellations as a function of the risks and benefits of pesticide use, as well as of political variables.

Registering pesticides

If the EPA suspects that use of a pesticide imposes unreasonable adverse effects to human health or the environment, it must subject the pesticide to a special review before banning it. During this review, the agency examines the risks and benefits of the pesticide's application for each crop on which the pesticide is used. The EPA next makes a preliminary judgment, crop by crop, regarding cancellation of the pesticide. Then follows a period during which members of the public, including environmental groups and growers' organizations, may comment on the proposed decision. At the end of the comment period a final decision (Notice of Final Determination) is issued.

During the special review process, the EPA considers not only the ecological effects of pesticides, such as whether a particular pesticide is toxic to wildlife or is likely to contaminate ecologically fragile environments, but also the risk of cancer to persons who mix and apply pesticides and to consumers who ingest pesticide residues on food. Evidence that a chemical is carcinogenic usually comes from tests on animals; these tests produce an estimate of the relationship between dosage of a pesticide and lifetime risk of cancer. This estimate is extrapolated to humans and multiplied by an estimate of human dosage (exposure) to calculate the incremental lifetime risk of cancer to a farmworker or consumer from that exposure.

Incremental lifetime cancer risks are typically much higher for pesticide applicators than for consumers of food products. For example, for the pesticides studied by researchers from RFF and the University of Maryland, the highest life-time cancer risk for pesticide applicators is 0.10 for ethylene dibromide (EDB) when used in spot fumigation—that is, as a result of applying this pesticide, the applicator's lifetime risk of cancer increases by one-tenth. (In other words, according to the EPA's estimate, one out of every ten pesticide applicators would die of cancer.) For half of the crops on which the use of pesticides was studied, however, the increase in cancer risk to applicators is much lower—only 1 in 100,000 or less. For consumers, the increase in lifetime risk of cancer from eating pesticide residues on food is even lower—only 23 in 1 billion, or less, for half of the crops studied.

In addition to cancer risks, pesticides may have adverse reproductive effects: they may cause miscarriages and fetal deformities or may lower the sperm counts of applicators. While there is human evidence for the latter two effects, information on fetal deformities usually comes from animal tests, and the extent of such effects in humans is generally difficult to quantify. Against these risks, the agency must weigh the costs to consumers and producers of banning the use of a pesticide on a particular crop. Losses will occur if producers must switch to a more costly substitute for a pesticide, or if a substitute is an imperfect one that will reduce yields when used. Decreases in yield may in turn lead to increases in food prices to consumers.

As calculated in the EPA's special review process between 1975 and 1989, losses to producers from the cancellation of uses of pesticides on foods varied widely. The highest loss expected during the first year following a cancellation was $227 million (in 1986 dollars) for the ban on alachlor for use on corn. Average first-year losses, however, were considerably lower—only $9.1 million. In 35 percent of all the cancellations considered, losses were calculated to be negligible because of the availability of substitute pesticides.

To explain the EPA's decisions regarding cancellation of a pesticide for use on a particular crop, RFF and University of Maryland researchers constructed a database on the risks and benefits of pesticide use as reported by the EPA in official documents. They also assembled a record of comments entered in the public docket (following a proposed decision) by environmental groups, growers' organizations, and persons from universities. This database was used to develop a model for predicting the influence of risks, benefits, and comments in the public docket on cancellation of a pesticide for use on a crop.

The results of the RFF/University of Maryland study indicate that the EPA has balanced the benefits of pesticide use against the health risks at all levels of risk. Although the researchers found levels of cancer risk for consumers and pesticide applicators above which all pesticide uses were banned, a model that assumes that cancellations are based on a risk threshold does not explain the decisions the EPA made as well as one that asserts that risks and benefits are balanced even at high risk levels. The theory that substances with low risks are never banned simply does not hold for the pesticides studied. For example, some uses of captan were banned even though they posed negligible cancer risks.

Given that the EPA balanced risks and benefits, how important were each of these factors in arriving at a decision? Analysis indicates that an increase in producers' losses of $1 million in the first year after cancellation reduced the chances of cancellation by one percentage point. With regard to health risks, those of greatest concern to the EPA appear to be risks of cancer and adverse reproductive effects in pesticide applicators. The value the agency attached to reducing risks of cancer to applicators is large: $35 million for a 1/10,000 reduction in cancer risk for each of 10,000 applicators. In the terminology of risk management, the value of saving one "statistical life" among pesticide applicators was $35 million. The size of this figure may reflect the fact that applicators are a well-defined population that faces large risks relative to the risks to persons who consume pesticide residues on food.

In addition to considering the risks and benefits of pesticide use, the Environmental Protection Agency appears to have been influenced by environmental groups and users of pesticides in making decisions to cancel food uses of pesticides. Comments by environmental groups increased the chances that a pesticide would be banned for use on a particular crop by 49 percentage points. Comments by growers' organizations and by academics acting on behalf of users and manufacturers reduced the probability of cancellation by 27 and 19 percentage points, respectively. This seems to imply that growers and academics offset the influence of environmental interests in the regulatory process; however, the three groups did not always comment on the same decisions. Environmental groups commented on 49 percent of the proposed decisions to cancel or not cancel a food use of a pesticide, growers' organizations commented on 10 percent of the decisions, and academics on 28 percent. All three groups commented on only 17 percent of the proposed decisions between 1975 and 1989 to cancel food uses of pesticides.

This last point raises the question of what prompted special interest groups to comment on the EPA's proposed decisions. In analyzing the behavior of growers' organizations and environmental groups—the two special interests having the most clearly defined objectives—it is clear that growers were more likely to comment when losses to producers from pesticide cancellation were high, while environmental groups were more likely to comment when a pesticide posed a danger to wildlife. In addition, whether or not special interests commented on proposed decisions was influenced by who the current administrator of the EPA was. When Anne Burford was the agency's administrator, no environmental groups commented on the 75 food-use decisions proposed during her tenure, possibly because they thought they would not receive a sympathetic hearing. By contrast, growers' organizations, anticipating more sympathetic treatment, were more likely to comment during Burford's tenure. In fact, half of all comments by growers' organizations occurred during the two years that Burford was administrator of the EPA. Thus Burford's tenure at the EPA seems to have had a negative effect on the likelihood of pesticide cancellation, due to the fact that no environmental groups intervened during her administration, whereas grower organizations were more likely to have intervened.

The results of the RFF/University of Maryland study offer both comfort and concern to persons interested in environmental regulation. With respect to comfort, it appears that the EPA is indeed capable of making decisions that balance risks and benefits, as the law requires. The study demonstrates that risks to human health, the environment, or both increased the likelihood that a particular food use of a pesticide would be cancelled by the EPA, while the larger the benefits associated with a particular use, the lower the likelihood of cancellation.

On the other hand, the study's results provide some cause for concern. For instance, researchers found that the implicit value of a statistical life in the 245 regulatory decisions studied is $35 million. This value is based on a risk estimate that, by design, is much more likely to be too high than too low. In other words, the value that the EPA implicitly placed on reducing risks to pesticide applicators may be considerably in excess of $35 million per life saved. Since there are a variety of policy measures, environmental and otherwise, that are capable of reducing cancer cases at much lower costs, it might be possible to reduce the cancer rate through a reallocation of resources. It is less clear how to view the study's findings concerning the influence of interest groups on the cancellation of uses of pesticides on food. Clearly, intervention in the regulatory process—by both business and environmental groups—affects the likelihood of restrictions on pesticide use. Other factors being equal, intervention by environmental groups has about twice the impact on the likelihood that a pesticide will be banned as intervention by growers does; however, the combined impact of growers and academics acting on behalf of growers is approximately equal to that of environmental groups.

To those who view pesticide regulation as the proper province of economists and risk analysts alone, these findings may be discouraging. On the other hand, those taking the view that regulation—like government taxation or spending—is inherently a political act may find it encouraging that affected parties not only participate actively in the regulatory process but do so quite effectively.