ECPA Annual Review 2007

ECPA ANNUAL REVIEW 2007 | CONTENTS 3

Contents

Leadership greetings 5

Market overview 7

2007 Highlights 10

Staff and members 13

ECPA network mission

ECPA acts as the ambassador of the crop protection industry in Europe and represents the industry’s European regional network. We promote agricultural technology in the context of sustainable development and, in doing so, seek to build understanding of our role, recognition of our contribution, and informed dialogue about our views, values and beliefs. • We represent our industry in relevant European fora and towards our major stakeholders. • We lead and co-ordinate a European network of member companies and national associations, who act as our local representatives. • We endeavour to listen and learn from our stakeholders and seek to understand their interests, views and perspectives.

ECPA advocates EU policies and legislation that uphold a science and risk-based approach, foster innovation, operate in a predictable and proportionate way, enable the industry to perform efficiently, protect intellectual property and reward the introduction of new technologies and practices.

4 ECPA ANNUAL REVIEW 2007 | LEADERSHIP GREETINGS

Maintaining environmental sustainability: Olives in the balance

In some countries around Europe, olives are among the most cultivated crops. New EU pesticides legislation could decrease the already limited number of available solutions for growing olives even more. Farmers may be left without the appropriate tools to grow olives while maintaining an ecological balance. This could make farming olives in some parts of Europe economically and environmentally unsustainable.

5ECPA ANNUAL REVIEW 2007 | LEADERSHIP GREETINGS

Leadership greetings

Roger DoigPresident and Chairman of the Executive Committee

Friedhelm SchmiderDirector General

2007 has been an unprecedented year for the levels of discussion, activity and interest in the pesticide debate. Undoubtedly, this topic brings about emotionally charged reactions from most of the stakeholders – from farmers whose livelihoods depend on the use of pesticides, from environmentalists who do not see a legitimate place for pesticides in European agriculture, from politicians who must cope with the contradiction of meeting increasing food demands yet removing the available technology to make it happen, and from industry who continues to invest in the development of safe and innovative solutions but wonders what tomorrow’s regulatory environment will look like.

EU policymakers now face the task of striking the right balance between these diverse perspectives by adequately addressing emotionally founded concerns while ultimately instilling a sound science-based regulatory system that provides European consumers access to affordable fresh foods.

We are playing a leading part in this process by continuing to demonstrate the fundamental contributions that our products make to European agriculture. Starting in the research labs of our industry, the products in development are more effective, selective and positive towards the environment than ever before. They assist farmers in maintaining a healthy and abundant crop that meets both society's needs for food that satisfies the requirements for quality and price, and the increasing demand for feedstocks for biofuels. And at the same time industry-led stewardship initiatives ensure that any potential health and environmental impacts are minimised through safe and responsible use.

Striking a balance in the legislation will be key to ensuring sustainable progress in crop protection, and we will continue to work with decision makers to make this a reality.

As political ideology increasingly pressurises policymakers into taking legislative measures over and above sound science and what is needed, Europe is taking an unnecessary gamble.

• Will there be any additional benefits? Who has looked into the real impact that the combined legislative updates will have?

• Will there be status quo? Will we still have today’s successful agriculture and secure food supply?

• Will all be lost? Will we need to import all our basic food needs?

ECPA has long strived to achieve a science and risk-based regulatory framework that is predictable, proportionate and cost-effective. ECPA promotes sustainable agriculture and stewardship that enhances environmental safety and human health.

ECPA welcomes the increased harmonisation of the approval of pesticide products throughout the EU, thereby further strengthening the internal market and protecting human health and the environment.

However, ECPA advocates that approvals should be based on real, not perceived, risks - so that the number of pesticides that growers can access will not be drastically reduced, which would have serious consequences for the long-term viability of European farming, and may even have a negative environmental impact. Restricting the active ingredients used in pesticides will particularly damage the availability of “minor crops” (particularly fruits and vegetables), and ultimately threaten Europe’s ability to produce the high-quality food consumers demand like Spanish olives, German hops, Greek citrus fruit, Polish potatoes, Italian tomatoes and more.

Pesticides are the last line of defence in the battle against pests and diseases and today are used in a highly targeted way, restoring plant health and preventing the creation of pest resistance through efficient rather than heavy-handed application of chemicals.

Putting Europe’s agricultural accomplishments under threat will lead to basic food price increases, farming instability and increased pressure on land use threatening our forests and natural habitats.

It is anyone’s guess as to what the real winnings or losses might be - ECPA believes that the full risks should be properly taken into consideration before we jeopardise the successful European agriculture that we have already achieved today, and our voice is not alone.

6 ECPA ANNUAL REVIEW 2007 | MARKET OVERVIEW

Hops and other minor use crops at risk

Even though hops is one of the most important flavouring and stability agents in beer, it is considered a ‘minor use’ crop in the EU. New EU pesticides legislation might make the production of plant protection products for minor uses economically unattractive, leaving few or no products to assist in growing them. Hops and other vulnerable crops will be without adequate protection against pests and fungus, leading to higher crop losses and subsequent price increases. Beer producers may have to look outside the EU for the ingredients to their “European” beer.

ECPA ANNUAL REVIEW 2007 | MARKET OVERVIEW 7

Market overview

In 2006, the market for crop protection products in Europe (EU 25 and EFTA nations) decreased by 1.8% to reach €6,578 m. at the ex manufacturer level. This figure relates to the value of product actually used on farm during the agricultural year. After the elimination of currency and inflationary factors this was equivalent to a real decline of 4.1%. The year was again affected by adverse weather conditions; for a second consecutive year the market was

The European situation

Change in EU-25 cultivated areas 2006

In terms of individual crops, the only major crop sector to register an increase in cultivated area was oilseeds, particularly oilseed rape, whilst maize, cereals, sunflower, sugarbeet and potato all

EU-25 and EFTA crop protection market by crop 2006

€

affected by a prolonged winter affecting both the autumn and early spring spray seasons. In Northern Europe this was followed by a hot dry summer, adversely affecting both crop yields and weed, pest and disease pressure. Southern Europe, particularly Spain and Portugal, benefited from more normal weather in comparison with drought affected 2005, resulting in partial recovery of the crop protection markets in these countries.

declined. Oilseed rape benefiting from increasing demand for biodiesel production, whilst sugarbeet was adversely affected by the ending of the EU sugar price support mechanism.

In terms of crop protection market performance, in Euro terms the most positive crop sectors were oilseeds, particularly oilseed rape, but also sunflower and soybean, although this is a relatively minor market in Europe. Whilst the maize and pome fruit markets registered growth, declines were recorded by cereals, sugarbeet, potato, vine and ‘other’ fruit & vegetables. Although the cereals sector declined, this was predominantly the result of lower sales of insecticides and fungicides due to the impact of the weather, whilst herbicide sales actually increased.

At the product level, the insecticides and fungicide sectors both declined overall and in all major crop sectors except oilseed rape and pome fruit. The herbicides sector improved marginally, with decreases in the sugarbeet and potato sectors offsetting improvements on other crops. ‘Others’, plant growth regulators and fumigants recorded the greatest growth in 2006, led by cereals, oilseed rape and potatoes.

Total market = €6,578 million

Crop Cereals Maize Rapeseed Sunflower Sugarbeet Potato

Area Change (%) -3.6 -4.5 11.1 9.1 -14.5 -1.6

8 ECPA ANNUAL REVIEW 2007 | MARKET OVERVIEW

European market (EU-25 + EFTA) by product sector 2006

2005 €m

2006 €m

Growth 2006/05%

Herbicides 2,842 2,865 0.8

Insecticides 979 944 -3.6

Fungicides 2,592 2,472 -4.6

Others 275 297 8.0

Total 6,689 6,578 -1.6

In 2006, the total European market increased by 1.1% in US dollar terms to account for 30.3% of the global crop protection market, ahead of both the NAFTA and Asian regions that each accounted for 24.3%. Of all the regions of the world, over the last five years the European crop protection market has also recorded the greatest growth rate in dollar terms, 8.3% per annum, although some of this has been due to currency translation. The key drivers of this growth have been Central and Eastern European countries,

The European crop protection industry continues to face a number of challenges in 2007/8, with the further adoption of the single farm payment system and the increasing importance of Central and East European markets; a change in the global situation for agricultural support following the breakdown of the Doha Round; the expected further decline in the sugarbeet acreage following the reform of the sugar price support mechanism; the growth in acceptance of GM technology, particularly following the acceptance of produce containing a number of traits for importation into the EU for both food and feed usage; increasing demand for arable crops for biofuel production; the continuing impact of the EU re-registration procedure, with some products now approaching their seven-year review period and proposals for a more formal data compensation procedure to be put in place to give generic companies access to data packages. Against this background a number of product re-registration decisions are being challenged.

particularly the new Member States of the European Union; however since 2002 both the Russian and Ukrainian markets have also improved, with both markets growing by around 20% in local currency terms in 2006. In the last four years, the new Member States have significantly increased food product exports to the EU-15, and with time are expected to further increase their share of the agricultural produce market, particularly in the grains sectors.

Overall the general expectation for market performance in Europe in 2007 is far more positive, with more normal weather conditions and higher commodity prices resulting in a much more buoyant environment. In the longer term growth is anticipated, although driven by Central and Eastern European markets, with market conditions in the EU-15 remaining very competitive. However, given the current regulatory situation where farmers are facing decreases in available solutions as well as tighter restrictions on use, there may be impacts on both the agricultural and economic levels.

Market data and analysis provided by Phillips McDougall AgriService.

Future challenges to the European crop protection industry

9ECPA ANNUAL REVIEW 2007 | HIGHLIGHTS

Potato losses mean higher prices

The potato is a highly important staple crop that is grown all over Europe because of its versatility. “Late blight” – a fungal disease – can destroy up to 100% of crops if left untreated. The use of fungicides by farmers to avoid this is already strictly regulated. Further reductions of available fungicides or imposed use limitations may result in devastating yield losses which will increase costs to farmers and the food chain. Ultimately consumers will feel the impact in their wallets.

10 ECPA ANNUAL REVIEW 2007 | HIGHLIGHTS

2007 Highlights

Regulatory developments

• The Commission’s proposal for a Regulation to replace the existing Directive 91/414/EEC was put forward to the European Parliament’s Environment Committee and voted on in the 1st Reading plenary vote in October. Some of the measures adopted that were welcomed by ECPA include provisions for national provisional authorisations, the principle of common origin for parallel trade and the adoption of some provisions for data protection. However, the addition of these positive elements was overshadowed by the introduction of new ‘cut-off’ criteria which would lead to the loss of the majority of active substances on the market today. Numerous stakeholders including industry, growers, and members of the food chain continue to raise concerns on these measures, as the repercussions to agriculture could be severe, especially for minor crops.

• The proposed Framework Directive for the Sustainable Use of Pesticides followed similar timelines in the European Parliament as for the above-mentioned proposed Regulation. After the 1st Reading plenary vote in October, the most critical amendments proposed were rejected; however, use reduction targets at national level are still called for. It is now the question whether these targets will be supported by the different Member States, or whether emphasis will be placed on impact reduction measures focussing on solutions that optimise use of plant protection products and further reduce risk. The next step in the process will be the development of a Common Position in the Council, followed by a 2nd Reading vote in the European Parliament.

• The European Parliament completed its 1st Reading on the Water Framework Directive daughter Directive. Council review is ongoing with the European Parliament 2nd Reading vote expected in 2008.

• With the Commission still looking to meet the end-2008 deadline for completing the Review Programme, discussions in 2007 have focussed on amending the process to improve the speed of decision making. A Regulation published in September amended the review process for third and fourth stage substances; it introduces new elements in the process, including the option of voluntary withdrawal of dossiers and the rapid inclusion or non-inclusion of certain substances. A further Regulation is being finalised, which will allow the re-submission of dossiers for non-included substances.

11ECPA ANNUAL REVIEW 2007 | HIGHLIGHTS

• ECPA continued its involvement in the EPAA (European Partnership for Alternative Approaches to Animal Testing) by participating in workshops and conferences exploring regulatory aspects of alternatives to animal testing.

• ECPA welcomed the Commission’s White Paper on Obesity and underlines its commitment to promoting the importance of fruits and vegetables for a healthy diet.

Stewardship initiatives

• Project activities against counterfeit and illegal pesticides around Europe were further intensified in 2007. Campaigns are running in Italy, Poland, Greece, Spain, Ukraine and Russia where activities are focussed on gaining political recognition, greater enforcement initiatives and helping farmers understand the risks. A recent conference in Poland attended by enforcement officers from nine countries highlighted the need for greater cross-border initiatives with regard to pesticides. In the Ukraine ECPA together with EBA are actively engaging the Ukraine government on substantial seized stocks and their ultimate disposal. In Brussels ECPA is working extensively with DG Trade and DG Customs on FTAs and anti-counterfeit measures respectively.

• ECPA and its respective national associations continued the implementation of the Safe Use Initiative projects, with good progress made in Greece and Portugal. Multi-faceted programmes of activities – including research, stakeholder consultation, an outreach campaign and training – were developed with the goal of improving worker safety. The development of a recognised standard of protective clothing in Europe is also underway.

• The TOPPS project, aimed at training operators to prevent pollution from point sources, made significant headway. In February, a stakeholder workshop helped to finalise a set of common Best Management Practices. Widespread surveys with farmers and stakeholders provided extensive insight into the current situation and practices, and a TOPPS public website was launched.

EU enlargement

• Romania and Bulgaria joined the European Union on 1 January 2007.

• In the lead-up to the joining of these two new Member States, ECPA collaborated with authorities to improve their knowledge and understanding through a series of workshops, and provided guidance on developing re-registration scenarios.

• The next countries preparing for EU membership are Croatia and Serbia. ECPA has strengthened co-operation with their respective authorities throughout the process of transposition of EU regulations.

Outreach

• ECPA, together with the national associations and related stakeholder organisations, ran a 5-week postcard campaign for MEPs aimed at raising awareness about the impacts of the proposed legislation. Each postcard profiled a farmer who explained how the proposals will affect his business.

• ECPA and the food chain partners collaborated successfully and provided common messages in joint articles and open letters on the adverse affects the proposed new EU legislation could have on food production in Europe.

• ECPA hosted a press briefing featuring world renowned toxicologist, Dr Bruce Ames, who shared his knowledge and expertise about putting pesticide risks into perspective.

ECPA ANNUAL REVIEW 2007 | ECPA STAFF

European pistachios may disappear from the menu

Pistachio trees thrive in dry and hot conditions, but pesticides are needed to limit yield damage and prevent health-threatening toxins from appearing in the crop. New EU pesticides legislation could severely limit the choice of products used to fight pistachio pests and disease. It could hamper or bring to an end a rich European heritage of pistachio farming, forcing import from non-EU countries where there are different environmental and safety standards.

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13ECPA ANNUAL REVIEW 2007 | ECPA STAFF

ECPA Staff

Friedhelm SchmiderDirector General friedhelm.schmider@ecpa.eu

Pascaline RitrovatoAdministrative Assistant pascaline.ritrovato@ecpa.eu

Stephan SchraffGovernmental Affairs Managerstephan.schraff@ecpa.eu

Peter DayScience & Technical Affairs Managerpeter.day@ecpa.eu

Helen DunnettInformation & Technology Managerhelen.dunnett@ecpa.eu

Euros JonesDirector Regulatory Affairs euros.jones@ecpa.eu

Claudia MichelSenior Manager Agriculture & Environment Policyclaudia.michel@ecpa.eu

Danuta ObierzynskaCEE Affairs Manager danuta.obierzynska@ecpa.eu

Rivka BenatarManagement Assistantrivka.benatar@ecpa.eu

Aurelie DhaussyRegulatory Affairs Adviser aurelie.dhaussy@ecpa.eu

Sarah GilesCorporate Affairs Manager sarah.giles@ecpa.eu

Kari MataloneCommunications Managerkari.matalone@ecpa.eu

Stuart RutherfordSenior Manager Environment & Food Policystuart.n.rutherford@ecpa.eu

Benjamin Van ZeverenAssistant Managerbenjamin.vanzeveren@ecpa.eu

Kalila HajjarAssistant Managerkalila.hajjar@ecpa.eu

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Members

Full member companies

BASF Bayer CropScience Dow AgroSciencesDuPont de NemoursMonsanto EuropeSyngenta

Associate & SME member companies

Austria - FCIOFachverband der Chemischen Industrie Oesterreichs

Belgium - PHYTOFARAssociation Belge de l’Industrie des Produits Phytosanitaires Belgische Vereniging voor de Industrie van Phytosanitaire Producten

Denmark - DCPADanish Crop Protection Association - Dansk Plantevaern

Finland* - KASTEKasvinsuojeluteollisuus ry

France - UIPPUnion des Industries de la Protection des Plantes

Germany - IVAIndustrieverband Agrar eV

Greece - HCPAHellenic Crop Protection Association

Ireland - APHAAnimal and Plant Health Association

Italy - AGROFARMAAssociazione Nazionale Imprese Agrofarmaci

Norway* - NPFNorsk Plantevern Forening

Spain - AEPLAAsociación Empresarial para la Protección de las Plantas

Sweden* - IVTSvenskt Växtskydd

The Netherlands - NEFYTO Nederlandse Stichting voor Fytofarmacie

UK - CPACrop Protection Association

* Part of the group of Nordic countries, together constituting one member only.

GAPEG member companies (non-agriculture)

BASFBayer CropScienceCOMPODow AgroSciencesMonsanto EuropeNeudorffNufarmScotts FranceSyngenta

Associate member companies

Arysta LifeScienceCFPI Nufam CheminovaChemtura Europe FMCGowanISK BiosciencesJanssen PharmaceuticaMakhteshim AganNufarmSIPCAM Sumitomo Chemical

National associations (associate members)

Bulgaria – BgCPABulgarian Crop Protection Industry Association

Croatia – CROCPACroatian Crop Protection Association

CyprusCyprus Crop Protection Association

Czech Republic - CCPACzech Crop Protection Association

Hungary - HuCPAHungarian Crop Protection Association

LithuaniaLithuanian Crop Protection Association

Poland - PSORPolskie Stowarzyszenie Ochrony Roslin

Portugal - ANIPLAAssociação Nacional da Indústria para a Protecção das Plantas

Romania – AIPROMRomanian Crop Protection Association

Slovak Republic – SCPASlovak Crop Protection Association

Slovenia – SLOCPASlovenian Crop Protection Association

Switzerland - SGCI Chemie Pharma SchweizSwiss Society of Chemical Industries

Turkey - ZIMID Zirai Mücadele Ilaclari Üreticileri Dernegi

Ukraine – EBAEuropean Business Association Agrochemical Committee

GAPEG member association (non-agriculture)

France – UPJUnion des enterprises pour la protection des jardins et espaces verts

ECPA ANNUAL REVIEW 2007 | MEMBERS

ECPA aisbl6, Avenue E. Van NieuwenhuyseB-1160 BrusselsBelgium

tel: +32 2 663 15 50fax: +32 2 663 15 60ecpa@ecpa.euwww.ecpa.eu

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