Perspective: Terry Higgins, Vice President & General Manager, OHP
New products are the lifeblood of crop protection, but a continuously evolving generics marketplace is limiting the development of new greenhouse chemistries.
January 19, 2011
If people think it's difficult to live in a world with pesticides, they should try living in a world without them.
OHP's Terry Higgins admits he wasn't the first person to speak those words. But having spent 35 years in crop protection, Higgins is a big believer in that message and the need for pesticides.
"Sometimes, I wish we as an industry could pull all of our products off the marketplace," Higgins says, "because I can guarantee you in two years, people would be begging and clamoring for us to bring them back."
Some things, such as the pressures crop protection providers and their users face, never change. But crop protection as a whole is continuously evolving, and Higgins, because of his experience, has a unique perspective on the industry's development.
Recently, we caught up with Higgins to get his perspective on the developing market of generic crop protection products, challenges with which federal and state governments are presenting crop protection providers and how conventional crop protection products fit into the sustainability discussion.
GG: Which major crop protection products will come off patent in 2011 and what developments may emerge as a result?
TH: Roughly 80 percent of the main brands offered today in the greenhouse and nursery segment are already off patent. There are a couple of large ones that have yet to fall, and they will be falling sometime in the next 12, 24 or 36 months - depending on who you listen to. The two products that are still rather large are azoxystrobin (Heritage) and isoxaben (Gallery).
We're watching them, and as we see it, the developments that always emerge as a result are market devaluation and multiple generic players in the business.
GG: As more products come off patent, growers have the option of exploring generics. Still, a need for new product development exists so pests and diseases do not develop resistance to existing products. So, considering the idea that more growers are becoming cost conscious yet new products are still a must, how does OHP strike a balance between meeting the grower's short-term (costs) and long-term needs (new product development)?
TH: New products are the lifeblood of our industry. If you think about the companies that spend research and development dollars, it's not the generic companies. It is the brand companies we are associated with like BASF and Bayer, and companies we are disassociated with like Syngenta. Those are the companies that traditionally spend heavy dollars on research and development looking for new molecules.
One result of the big explosion of generic products is that these companies are seeing less return on the dollars invested for their brands. And that leaves them with fewer dollars to invest in new product development. So growers need to understand that if they're not supporting the branded companies, their lack of support is having an impact on the dollars spent for researching and developing new molecules.
Many companies are taking their R&D dollars and putting them into the area of seed genetics. Instead of trying to find a new pesticide product, they're trying to find a plant material that is resistant to pests. They're shifting those resources to other areas that, long term, will be a better payout.
GG: Has the current administration made it more difficult to achieve chemical registrations?
TH: The current administration is not friendly to our industry, but I can't point a finger at instances in which it has slowed down the registration of product. The Pesticide Registration Improvement Act (PRIA) has really kept the process moving along. However, you have an administration and outside activist groups that are forever watching every move the EPA makes. All you have to do is look at the Kontos situation last year and surmise that we are under the microscope. Any administration, be it a friendly administration or a non-friendly one, is under the microscope of outside activist groups. They're going to be challenged.
The real challenge we as an industry face now is at the state level. There are a lot of budget and staffing constraints due to the economy. They're really having an impact on timeliness of product registrations at the state level. That's where we see a slowdown in the registration process.
GG: You mentioned Kontos insecticide, which hit a roadblock early in 2010 when an EPA procedural error led to a federal ruling that the product's registration be vacated. How unprecedented was that situation and what are the implications for other crop protection products?
TH: It was a one-of-a-kind (situation) in my 35 years in the industry. It's the first time I've ever seen anything like this. It's a sign of the times in that everyone is under a microscope when it comes to the use and registration of pesticide products - even the EPA. I know there is a posting period EPA must follow that would give people the opportunity to comment on the registration itself. That's the procedural error that EPA did not follow. They did not post a period for people to respond to the product registration, and the comment period is a common procedure with any pesticide registration that goes through the federal level.
We fully expect the Kontos registration to be reinstated in the very near future.
GG: Considering more growers are considering balancing their pest management programs with the use of both conventional insecticides and bio-controls such as predatory mites, are growers equipped with enough knowledge to manage crops using both strategies?
TH: Most growers we are dealing with have a very good understanding of using today's traditional pesticide products. They're educated growers. But when you're talking about the use of bio-control products, the one product that comes to mind is predatory insects.
My perception is that it's an area growers in the United States are having a very difficult time learning to use on the basis where it becomes a good value to that grower. I think the growers who have learned to use predatory insects in their pest control program are niche growers. To try to get them to use it across the board, the value isn't there for most growers.
Predatory insects could be part of a program, but the backbone of a program is going to have to be conventional pesticides. Until such time, and until the predatory insects are priced at a level and are efficacious at a level that provides good value to the grower, it's not going to be across-the-board practice.
GG: As more growers frame their businesses around sustainability and as leaders of sustainable floriculture become more influential, what are the implications for crop protection products, their use and the companies that produce them?
TH: A couple years ago, the whole VeriFlora thing was much talked about. In recent months, the buzz has kind of gone away. Obviously, the whole sustainability umbrella that's driving this is a thing I wouldn't call pesticide friendly. It certainly lends itself to using fewer pesticides, and it puts additional burdens on some traditional pesticide products.