answer the question after the reading
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Kenneth E. Goodpaster and Laura L. Nash ~YES
Note on the Export of Pesticides from the United States to
Developing Countries
Fron: the 194?s to the late 1970s the pesticide industry, driven by the fre- quent mtroduct10n of new products, experienced rapid growth. Investment of R&D [research and development] was high to sustain innovation and cheaper manufacturing processes. In 1981 R&D budgets were 8% of sales. The mdustry also required high capital investment because of the rapid obso- lescence of plant and equipment; thus, capital expenditures were 7.2% of sales. These high technology costs, as well as high regulation and marketing costs, posed significant barriers to entry.
Sales of U.S. producers steadily increased from $1.2 billion in 1972 to $5.4 billion in 1982 .... Exports steadily rose from $220 million in 1970 to about $1.2 billion in 1980. Production of pesticides in the U.S. rose from 675 .million pounds in 1960 to a peak of 1.7 billion pounds in 1975 and declmed to 1.3 billion pounds in 1980.
Price~ and profits for pesticides depended largely on whether or not pat~ ents were. mvolved. Pretax profit margins on proprietary products that had a ~arket mche were about 48%. Older products, like DDT and 2,4-D, func- tioned more like commodities and returned considerably less on investment. ~ve? though a product was patented, competing companies often developed s1m1lar products not covered by the original patent. Prices of pesticides tri- pled between 1970 and 1980; in 1981 herbicides had the highest price and accounted for 60% of sales.
The pesticide industry was a mature industry and U.S. markets had become saturated. As demand in the U.S. slowed, exports increased. In 1978 ~xports we:e 621 million pounds and were 36% of total shipments. In 1990, 1t was prediCted, exports would be 855 million pounds and would be 43% of total pesticide shipments. Dollar volume of U.S. exports was projected to reach $2.6 billion by 1990.1
Industry analysts agreed that exports would provide the fastest growth for U.S. producers, since the U.S. markets were saturated. Farmers were also
Fro;n Kenneth E. Goodpaster and Laura L. Nash, Polides and Persons: A Casebook in Business Ethzc:, 3rd ed. (Mc<?r~w-Hill, 1998). Copyright© 1998 by The McGraw-Hill Companies Inc. Reprmted by permiSSion. '
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YES I Goodpaster and Nash 371
using fewer pesticides because of increased costs, declining acreage under cul- tivation, a slowing of growth in farm income, and increased use of integrated pest management (IPM) techniques which relied more on cultural and bio- logical controls and less on pesticides.
There were 35 producers of pesticides worldwide with sales of more than $100 million per year. In 1982 total worldwide sales were $13.3 billion, up from $2:8 billion in 1972. Six countries-United States, West Germany, France, Brazil, the USSR, and Japan-accounted for 63% of worldwide sales. All of the developing countries combined accounted for 15% of the world- wide market in dollar volume. A report by the U.S. General Accounting Office (GAO) estimated that pesticide requirements in dollar value for these countries were expected to increase fivefold from 1979 to 1985.2
The Benefits of Pesticides The pesticide industry and many agricultural scientists defended the sale of pesticides to developing countries, declaring that pesticides were necessary to feed an ever-increasing world population, most of it poor, and that pesticides were of great value in fighting diseases which primarily affected the poor. They also argued that there were important secondary benefits.
In 1979 the world population reached approximately 4.4 billion people. Using a minimum-intake level for survival, with no allowance for physical activity, the Food and Agricultural Organization (FAO) of the United Nations estimated that there were 450 million chronically malnourished people in the world. Using a higher standard, the International Food Policy Research Institute put the figure at 1.3 billion. 3
World population doubled from A.D. 1 to A.D. 1650; a second doubling occurred after 200 years; the next took 80 years; and the last doubling took place in 1975, requiring only 45 years. Given the 1980 worldwide average birthrate of 2.05%, according to Norman Borlaug the next doubling would occur in 2015, when world population would total 8 billion. At that birth- rate, 172 people would be born every minute, resulting in an additional 90 million people each year. David Hopper of the World Bank stated that developing countries accounted for 90% of this increase.4
In 1977, Borlaug noted, world food production totaled 3.5 billion tons, 98% of which came directly or indirectly from plants. On the basis of rates of population growth and projected income elasticities for food, Hopper emphasized the necessity for an increase in food availability of about 3% per year, requiring a doubling of world food production to 6.6 billion tons by 2015. Increasing demand for food by developing countries was reflected in the fact that imports of grains to these countries rose from 10 million tons in 1961 to 52 million tons in 1977, according to Maurice Williams, and food shortages were projected to reach 145 million tons by 1990, of which 80 million tons would be for the low-income countries of Asia and Africa. 5
A major cause of these shortages was that food production in develop- ing countries had not kept pace with the increased demand for food. While per capita production of food for developed countries had steadily increased
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372 ISSUE 19 I Should We Export Pesticides to Developing Nations?
since 1970, per capita production in developing countries decreased by average of SO%, with the economies of Africa and Latin America showing. greatest drop.
Although experts agreed that it was important to attack the world . problem by lessening demand, they also concurred that deliberate efforts slow population growth would not produce any significant decline in for food for the next decade or so. It was argued, then, that ameliorating world food problem depended on increasing the food supply. Norman recipient of the 1971 Nobel Peace Prize for the development of the m2-n-\'1€ seeds that were the basis for the Green Revolution, argued that r1P'T"''~"'•n countries would not make significant additional increases in yields per and that developing countries had to increase their per capita food prc,ductic Due to the scarcity of easily developed new land, Borlaug concluded ~creases in wo~ld food supply could come only from increased yields per m these countries, and that this required the widespread use ofpesticides, 6
There was little argument, even from critics, that pesticides 1111..1ca.:.t food production. The technology of the Green Revolution, which r1PT,.,.,,,.,. on pesticides, had enabled scientists in the tropics to obtain yields of els of com per acre versus an average yield of 30 bushels per acre by methods.? The International Rice Research Institute in the Philippines shown that rice plots protected by insecticides yielded an average of 2.7 per hectare (2.47 acres) more than unprotected plots, an increase of 100%. They also found that the use of rodenticides resulted in rice yields up three times higher than those of untreated plots.8 (Only producing more would not end world hunger. What kinds of foods people eat and the are correlated with income. Thus, many experts maintain that economic opment is equally important in eliminating world hunger.)
Even with the use of pesticides, worldwide crop losses because of before harvest averaged about 25% in developed countries and around in undeveloped countries. In 1982, GIFAP estimated that total crop losses to pests for rice, com, wheat, sugar cane, and cotton were about $204 Most experts (quoted in Ennis et al.) estimated an additional loss of of food crops if pesticides were not used.9
Pesticides also contributed to reducing losses after harvesting. A Academy of Sciences study identified most postharvest loss resulting from and observed that "conservative estimates indicate that a minimum 107 million tons of food were lost in 1976; the amounts lost in cereal grains; and legumes alone could produce more than the annual minimum caloric requirements of 168 million people." Postharvest losses of crops and perishables: through pests were estimated to range from 10% to 40%. Insects were a major. problem, especially in the tropics, because environmental conditions produced rapid breeding. The National Academy of Sciences noted that "SO insects at harL vest could multiply to become more than 312 million after four months." In India, in 1963 and 1964, insects and rodents attacked grain in the field and in storage and caused losses of 13 million tons. According to Ennis et al., this amount of wheat would have supplied 77 million families with one loaf of bread per day for a year. 10
YES I Goodpaster and Nash 3 73
Many developing countries also relied on the sale of agricultural prod- ucts for foreign exchange that they needed for development or to buy the commodities they could not produce. Cotton, for example, was an important cash crop for many of these countries. Several experimental studies in the United States had shown that untreated plots produced about 10 pounds of seed cotton per acre, but over 1,000 pounds were produced when insecticides were used. If It was estimated that SO% of the cotton produced by developing countries would be destroyed if pesticides were not used.
It was also argued that major indirect benefits resulted from the use of an agricultural technology that had pesticide use as an. e~sential co~ponent. This "package" was more efficient not only because It mcreased Yields per acre but also because it decreased the amount of land and labor needed for food production. In 1970 American food production, for example, required 281 million acres. At 1940 yields per acre, which were generally less than half of 1970 vields it would have taken 573 million acres to produce the 1970
] ' I • d • ld 12 crop. This was a savings of 292 million acres t?rough mcrease . crop yie s. The estimated 300% increase in per capita agricultural productiOn from 1960 to 1980 also meant that labor resources could be used for other activities. Other experts estimated that without the use of pesticides in the United States, the price of farm products would probably increase by at least l~% and we would be forced to spend 25% or more of our income on food. It was held that many of these same secondary benefits would accrue to devel- oping countries through the use of pesticides.
Pesticides also contributed both directly and indirectly to combating disease; because of this, their use in developing countries had increased. Pesti- cides had been highly effective in reducing such diseases as malaria, yellow fever, elephantiasis, dengue, and filariasis. Malaria was a good example. In 19SS, WHO initiated a global malaria eradication campaign based on the spraying of DDT. This effort greatly reduced the i~c~dence of ~alaria. For example, in India there were approximately 75 million cas~s m the early 1950s. But in 1961 there were only 49,000 cases. David Bull estimated that by 1970 the campaign had prevented 2 billion cases and had, saved 15 .million lives. In 1979 Freed estimated that one-sixth of the worlds populatiOn had some type of pest-borne disease.l
4
Notes 1. "Pesticides: $6 Billion by 1990," Chemical Week, May 7, 1980, p. 45. 2. Better Regulation of Pesticide Exports and Pesticid~ Resid~es in Imported Foods
Is Essential (Washington, DC: General Accountmg Offlce, 1979), p. 1. 3. Maurice J. Williams, "The Nature of the World Food and.Population Prob-
lem," in Future Dimensions of World Food and Population, ed. by R. G. Woods (Boulder, CO: Westview Press, 1981), p. 20.
4. Norman Borlaug, "Using Plants to Meet World F?od Needs," Future Dimensions, p. 180; David Hopper, "Recent Trends m World Food and Population," Future Dimensions, p. 37.
5. Borlaug, pp.ll8, 128; Hopper, p. 39; and Williams, p. 11.
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6. 7. 8.
9.
10.
11.
12. 13. 14.
ISSUE 19 I Should We Export Pestiddes to Developing Nations?
Borlaug, p. 114 and pp. 129-34. Hopper, p. 49. Bull, p. 5.
GIFAP Directory 1982-1983 p. 19· W B Ennis W M Dowl W Kl "Crop P t f I , , . . , . . er, . ass en, . . ro ec IOn to ncrease Food Supplies," in Food: Politics, Economics
N~trrtion, and Research, ed. P. Abelson (Washington, DC: American Associ~ atwn for the Advancement of Science, 1975), p. 113.
E. R. Pa~ser et al., Post-Harvest Food Losses in Developing Countries (Washington D~: ~ational ~c~demy of Sdences, 1978), pp. 7, 53; Ennis et ai., p. 110. ' WIII~am Hol!Is, The Realism of Integrated Pest Management as a Conce t ~nd m Pract1ce-~th So~ial Overtures," paper presented at Annual Me~ mg of Entomologrcal Society of America, in Washington DC December 1 1977, p. 7. , , ,
Borlaug, p. 106. Ennis et al., p. 113.
Bull, p. 30; Virgil Freed, in Proceedings, in p. 21.
NO~ Jefferson D. Reynolds
International Pesticide Trade: Is There Any Hope for the
Effective Regulation of Controlled Substances?
Introduction ... In the last decade, the international community has grown increasingly con- cerned with pestiddes and their effects on hrnnan health and the environment, with particular emphasis on the threat posed in developing countries. Workers in developing countries are exposed to pestiddes in the course of their work to pro- vide produce for domestic consrnnption as well as for export to developed coun- tries like the United States (U.S.). Because export dollars are so valuable to developing countries, there is added pressure to produce a higher yield of produce. These countries often obtain a higher yield through the use of pestiddes consid- ered too dangerous to use in developed countries. Therein lies the crisis, large inter- national corporations are able to sell pestiddes abroad that cannot be sold in the U.S. These corporations sell pestiddes that are classified as so harmful to hrnnan health and the environment, that their use cannot be justified for any purpose. In response to worldwide concerns, the United Nations has advanced some impor- tant initiatives to regulate the international pestidde trade. For example, in 1985 the United Nations Food and Agriculture Organization (FAO) published the Inter- national Code of Conduct (Code) on the Distribution and Use of Pestiddes, giving partidpating countries a formal method to refuse or consent to hazardous imports. FAO designated this method the "Prior Informed Consent" (PIC) procedure. Developed and developing countries alike welcomed PIC because this procedure possesses a common sense approach to the problem by providing an important link in the transfer of information on pestiddes to developing countries that other- wise would not have access to the information ....
Adverse Effects of Pesticides Pestiddes play a vital role in protecting crops and livestock, as well as in control- ling vector-borne diseases. In many countries, pestiddes also present significant
From Jefferson D. Reynolds, "International Pesticide Trade: Is There Any Hope for the Effec- tive Regulation of Controlled Substances?" Journal of Land Use & Environmental Law, vol. 13, no. 1 (Fall 1997). Copyright© 1997 by Journal of Land Use & Environmental Law. Reprinted by permission. Notes omitted.
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376 ISSUE 19 I Should We Export Pesticides to Developing Nations?
dangers to people and the environment. The danger to people arises from resi- dues in food crops and livestock, as well as from the handling of pestiddes bf farmers. Farm workers suffer from pestidde exposure the most, with an estimated 20,000 deaths each year. Ninety-nine percent of these deaths occur in developing countries due to farming practices, storage of pestiddes in living areas, location of residential areas near application sites, method of application and type of equip- ment used. Pestiddes also cause water pollution, soil degradation, insect resistance and resurgence, and the destruction of native flora and fauna.
Of all the potential hazards of pesticides, the most serious is the risk to human health. Adverse effects of exposure include cancer, reproductive impairment, mutation and neuro-toxicity. Recently, pesticides have also been found to cause endocrine disruption. The pesticide bio-accumulates in human tissue, mimicking estrogen and disrupts regular hormonal activity.
The high incidence of injury in developing countries primarily results from inadequate information on proper application methods, insufficient government resources to monitor pesticide use, and the greater availability of • highly toxic substances than in developed nations. For example, field and packing plant workers in Chile have little knowledge about the hazards of pes- ticides. The workers wear no protective clothing and continue to work in the fields while airplanes or tractors pass by spraying produce. The workers are pri- marily young, transient, uneducated individuals with little political influence to improve the situation.
Common environmental problems associated with pesticides include contamination of water resources and insect resistance and resurgence. Some pesticides deplete the ozone and exacerbate the greenhouse effect. Further, diffuse aerial spraying of fields damages non-target crops and may destroy non-target species. Pesticides that enter the waterways through run-off result in fish kills. Wild animals and domestic livestock also ingest pesticides by drinking contaminated water or by eating smaller animals and vegetation in which toxic chemicals exist. Persistent pesticides like DDT do not dissolve, and concentrate in the fatty tissue of animals. DDT bio-accumulates, moving up the food chain until it finally becomes part of the human diet.
Excessive use of pesticides leads to the gestruction of natural enemies and the resurgence of pest species, which in tum leads to increased spraying. This process is commonly known as the "pesticides treadmill," which leads to the resistance of pesticides. In extreme cases, a pesticide can create a more destructive "super pest" by altering the genetic composition of the insect. In India, the introduction of DDT to reduce malaria resulted in the number of cases dropping from 7.5 million to 50,000; however, increased resistance eventually raised the number back to 6.5 million. Although only 182 existed in 1965, there are now more than 900 pesticide and herbicide resistant species of insects, weeds, and plant pathogens, while seventeen insects show resis- tance to all major categories of insecticides. In addition, resistant species of weeds have grown from twelve to eighty-four.
The foregoing information illustrates that agrichernicals have a pro- found and significant impact on human health and the environment. How- ever, a solution must also objectively evaluate why these substances are so
NO I Jefferson D. Reynolds 377
highly valued. Pesticides increase the food yield for an ever-increasing popt~ lace. Measuring the environmental and health damage that results from pestr- cide exposure against the famine that would result without pesticides is a model not yet constructed.
DDT probably best illustrates the double-edged nature ?f pesticid~s. Although restricted from use in the U.S. in 1972, several developmg countnes still use it as an effective defense against vector-borne diseases like malaria, yel- low fever, river blindness, elephantiasis and sleeping sickness. Developing countries must consider what is more beneficial to public health by balancing the disabling or fatal effects of vector-borne disease with th~ disabling or fa~al effects of DDT use. This is particularly important since DDT IS a known carcm- ogen found to increase the risk of breast cancer in women exposed to the pes- ticide by a magnitude of four.
Vietnam exemplifies the abuse of pesticides. Since Vietnam's shift to a free market economy in 1988, agricultural exports have been increasing with the use of pesticides. Emphasizing agriculture, Vietnam has ~njo~ed ste~dy economic growth. To maintain yield, farmers have applied mcreasmg amounts of DDT to fight pest resistance. Unfortunately, this practice shows little sensitivity to the long-term adverse effects on the environment and sustainable economic development. Soil acidification and salinization has occurred in conjunction with contamination of fisheries and water resources. The U.S. exhibits little sensitivity to the issue. The Pesticide Action Network (PAN), a special interest group tracking pesticide exports, reported that the U.S. exported fifty-eight million pounds of banned pesticides between 1991 and 1994, making the U.S. a key contributor to the degradation of human health and the environment in Vietnam.
The "Circle of Poison" As early as 1981, various pestiddes restricted in the U.S. were _ex~orted to developing countries, only to return as residues concentrated m Imported foods. This problem has been termed the "circle of poison." In 1989, the General Accounting Office (GAO) reported that the circle of p~ison was ~ co_ncem because the EPA was not monitoring the content, quantity, or destmation of exported, unregistered pesticides under sections 17 (a) and 1? (_b) of the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA). Specifically, t~e GAO found that the EPA "does not know whether export notices are bemg sub- mitted, as required under FIFRA" and that "notices were not sent for three pesticides (out of four) that were voluntarily canceled [by the manufacturer] because of concern about toxic effects."
The U.S. is a leading producer of pesticides, contributing fourteen per- cent of the world's export market. At least twenty-five percent of the four to six hundred million pounds of pesticides exported annually are not registered with the EPA. The EPA canceled or suspended some of these chemicals because of the dangers they pose to human health and the environment, and in some cases manufacturers voluntarily withdrew their products. Because the U.S. exports a high percentage of unregistered pesticides, these chemicals have
378 ISSUE 19 I Should We Export Pesticides to Developing Nations?
a high potential to reenter this country as residues on imported foods. example, Chile is a large market for U.S. manufacturers of pestiddes. u1•....tuuc'"' in the 1,460 pesticides used by Chile are Lindane, a substance banned the U.S.; Paraquat, which contains dioxin; and Parathion, a toxic '-''"·~ ... , .. phosphate that has restricted use in the U.S. In addition, Chile uses Methyf Bromide. Ironically, these pesticides are either banned or restricted in the U.S:; but may be used on produce that is eventually imported by the U.S ....
Conclusion The current unregulated practice of exporting chemicals to developing coun- tries has yielded unfortunate consequences. Although the developed world feels the effects of pesticide trade, a majority of the detrimental impacts ori human health and the environment afflict the developing world. Unfortu- · nately, developing countries generally lack the resources, information and expertise to protect their people from dangerous chemical exports that are banned or severely restricted in developed countries. The incidence of pesti.l · cide exposure worldwide suggests that a major public health problem is not receiving the attention it deserves. New methods for estimating the true incil dence of pesticide poisoning must be explored. The fact that exposure is almost exclusively in developing countries, even when pesticide consumptiott is so low in comparison to developed countries, would suggest research needs to be conducted to develop exposure intervention programs.
There is also a critical shortage of information on pesticide exposure, result~ ing in an inability to evaluate the true environmental and human health impacts of pesticides. ~ittle is known about the effects of long term exposure to pestidde residues in food. Further, the lack of exposure data internationally makes the problem difficult to evaluate. As this [selection] illustrates, exposure data is out- dated and available only through spedal interest groups or from international organizations that currently suffer from budget shortfalls. For example, the most recent comprehensive exposure study was conducted by the World Health Orga- nization in 1988. That report conservatively estimated over one million exposures occur annually. Many developing countries do not keep track of exposure data, and those that do often fail to report the data to central organizations like the United Nations. There are indications of a worldwide pesticide exposure crisis, but there is little data to confirm or deny the conclusion. The situation can be associ-' ated with a patient who would rather not be examined for fear of hearing the news of a costly diagnosis. If reliable exposure data were available, perhaps there would be more interest in the problem leading to firm and decisive regulation.
One approach certain to bring responsibility to pesticide trade is to out- law or severely restrict the export of those pesticides the U.S. has banned, withdrawn registration or severely restricted. Furthermore, pesticides that have no registration cu11ld also be included among those outlawed for export. This is probably the most unlikely resolution because the U.S. has a significant share of the global pesticide industry. Chemical lobbies and politicians alike have long recognized that foreign pesticide manufacturers would be more than satisfied to obtain the U.S. share of pesticide exports.
NO I Jefferson D. Reynolds 379
Although domestic and international efforts are moving toward full dis- closure of the dangers and proper use of pesticides, no single set of rules can ensure the safe use of pesticides under every condition. Instruction and restric- tion apply to specific pesticides, formulations, application methods and com- modities. In an effort to help resolve this problem, governments and industry alike should follow strict PIC procedures. Demanding good conduct on the part of industry in exchanging toxicological information between states, and having rules on trading, labeling, packaging, storage and disposal will have a beneficial impact. The current trend in the pesticide industry involves more training time for agricultural workers and greater company efforts to monitor pesticide use.
Current initiatives to curb pesticide trade problems offer little assistance in resolving exposure problems without a firm commitment by the world's key chemical exporting countries. The voluntary nature of international"soft law" schemes render them virtually unenforceable in today's lucrative inter- national chemical market. Moreover, until the international market reflects a level economic playing field, powerful domestic lobbies will likely defeat U.S. initiatives on a legislative level. Incentives greater than money must exist before key chemical producing countries would submit to a convention man- dating responsible trade. Perhaps proponents should stress the potential loss of life and the danger of domestic food safety, in hopes that ethical and moral motivations will prevail.
POSTSCRIP'E.
Should We Export Pesticides to Developing Nations?
Pesticides kill things and then persevere in the environment to kill things in the future. That is what is good about them and bad about them. At this writing, the continued export of pesticides and other lethal substances (including tobacco and guns) is of intense concern to business ethicists and many legislators.
Suggested Readings Pestiddes: For Export Only, film, Richter Productions (1981). William Hollis, "The Realism of Integrated Pest Management as a Concept
and in Practice With Social Overtures," presented at the Annual Meeting of the Entomological Society of America (1977).
Lake Sagaris, "Conspiracy of Silence in Chile's Fields: Pesticide Spraying of Fruit Results in High Levels of Birth Defects," Montreal Gazette (Novem- ber 27, 1995).
World Health Organization, Division of Health and Environment, Pesti- ddes and Health in the Americas, Environmental Series #12.
Food and Agriculture Organization, International Code of Conduct on the Distribution and Use ofPestiddes, U.N. Document, MIR8 130.
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