imminent hazard to the public so in the interest of the public, EPA says we have to take it off of the market.

Now, in this case, I don't think anybody wants to penalize unduly the manufacturer of the product. It was done in good faith. He was just as honest as the EPA was in approving it. He was just as honest in manufacturing it as the experiment station was in recommending it to the farmer and so it is in the public interest that this be taken off of the market.

Now, in order to do that, the best way to do it is to concentrate it into the hands of the EPA in central points without shipping it all over the place, and then destroying it in a way that is determined by the Government to be in the best interests of the American public. I think it is just this simple and this fair.

Senator ALLEN. Yes sir. Well, since you volunteered this information, I wonder if you could give an estimate as to the inventories on hand by the various chemical companies during last year, of chemicals which were ordered withdrawn from the market. Would you be able to give an estimate of that?

Mr. BRINKLEY. No, sir, I couldn't. There were very few that were subject to this sort of provision.

There were a great many that were canceled but it did not include this situation under which indemnities would be paid under this bill. Senator ALLEN. Well, now, with the indemnity there, of course there would be a tendency to possibly build up larger inventories than you might build up if there was no indemnity. Would that be correct? Mr. BRINKLEY. No sir, because as I understand this, you would not be able to anticipate suspensions and so it would be in the normal course of business and you would expect that indemnity provision would be for emergency things that are quite unusual that might arise.

Senator ALLEN. Well, are there chemicals that a manufacturer would know would be skirting the edges of whether it might be removed from registration by any possible cancellation or suspension?

Mr. BRINKLEY. I think those properties that you are referring to and the situations that you refer to would be cancellation orders which would in all probability provide that the material just ceased to be manufactured and be used up.

Senator ALLEN. Yes; I know. But a manufacturer manufacturing a product that has been in the newspapers as possibly a subject of cancellation or withdrawal from the market, would not a manufacturer have small stocks of that type of chemical where there is no indemnity and they might build up if they had an indemnity?

Mr. HERTEL. I don't know if I can answer that. It is a very difficult question to answer. From one industry standpoint, it is a fact where we are aware of these problem areas then we do exercise control. We have to in the production of our product. Except where we are hit with an imminent hazard where it is not anticipated, I can't visualize where inventory problems are going to be too large. I really think one of our greatest problems where products are eliminated is what do you do with them after you can no longer use them?

Senator ALLEN. Well, I noticed the bill though seems to solve the matter of disposition by giving you the right to call on the EPA to

come and pick up this stuff which you can't use anymore. That seems to be the way to solve it.

Mr. HERTEL. I would hope that if the regulation is finally written, if we have new bill, that there will be language here that in some manner allows the safe and most efficient disposal of chemicals of this nature. I think it can be done.

Senator ALLEN. How would you go about disposing of a chemical that has been judged to be dangerous to persons or to the environment?

Would you merely pour it down the drain? What would you do with it? You couldn't burn up liquid. How would you go about disposing of it?

Mr. HERTEL. There are within the industry, I think and within the Government burning techniques that can even handle liquids. And the extent of these I am not familiar with, Senator.

Senator ALLEN. Under the bill you are allowed to turn that responsibility over to the EPA, isn't that correct? That is the way I read the bill.

Mr. BRINKLEY. I think that is right, Senator, I think it is very proper in those cases that it be put in the hands of the Government in an orderly manner so that they might be then in a position to transport it to a disposal site and dispose of it in a way that they feel is in the best interests of the public.

Senator ALLEN. Now, since the three of you have been testifying on these questions, I will ask anyone of the three who cares to answer, could you give an estimate as to how much money is involved here, how much it would be likely to cost the U.S. Government as a result of indemnity provision.

Would it be on the order of $10 million a year or $25 million a year or more or less? This could be very important.

Mr. BRINKLEY. If you will give me the privilege of answering it, I would not believe that it would amount to very much at any time because I don't think that we would have the type of actions very often that would necessitate that and I would envision that we would very likely go for several years with none.

Nobody could anticipate at this time how much it would be because if it were a product that was not a very large tonnage item, then not very much would be involved. If on the other hand, it were one of the largest ones, then it would be considerably more. But, I do not in my mind, envision any great expenditures.

Senator ALLEN. Do you concur in that view, Mr. Conner?

Mr. CONNER. Yes I do. I recall only three instances where there has been a suspension, one was of the mercury compounds, that was suspended without any advance notice at all one morning following a CBS broadcast. So there would have been no advance notice on that. The other was the 2,4,5-T for certain limited uses. And the other was the organical herbicides for use around the home. No, that was not a suspension. Those two are the only suspensions.

There are many cancellations now in process but this would have no application.

Senator ALLEN. Mr. Kampmeier, do you concur in that judgment?

STATEMENT OF CARLOS KAMPMEIER, ROHM & HAAS CO., PHILADELPHIA, PA., REPRESENTING THE NATIONAL AGRICULTURAL CHEMICALS ASSOCIATION

Mr. KAMPMEIER. Yes.

Senator ALLEN. Since there would be very little in a financial way involved, there is really not too much need for this indemnity provision, is there?

Mr. KAMPMEIER. Except the primary benefit would be to the farmer that would have it on hand, while it might not be very much dollarwise to the U.S. Government, I would think there would be quite a number of instances where it would be important to him.

Senator ALLEN. How would it be to limit the indemnity to the farmer? Would this be a sound approach?

Mr. BRINKLEY. I don't believe that that is the purpose, Senator. I think that the purpose is that when you find that there is a product that is a hazard to the American public, that it is in the interests of the American public to get it out of the way, and I don't think that you are concerned in that with penalizing the farmer or penalizing a retailer out here because he happens to have it on hand. I think that in the interest of the public you want to get rid of it and certainly it seems like to me that it is only justice that whoever happens to have it, get paid for it without being penalized.

Senator ALLEN. I have a note here that the time for the statement and questions is over. I do want to encroach upon the time limit to this extent, something I asked Mr. Johnson, on the matter of the registrant disclosing his data. I assume you gentlemen feel that this is a provision which must stay in the bill, is that correct? I mean, to make it equitable?

Mr. KAMPMEIER. That is correct.

Mr. BRINKLEY. Yes, sir.

Senator ALLEN. What Mr. Johnson was talking about on the matter of the patent, that really is not important on this, is it?

Mr. KAMPMEIER. It doesn't have anything to do with it at all.

Senator ALLEN. Yes, sir, this is the original registration of a new product which will not have a 17-year patent?

Mr. KAMPMEIER. And the maintenance of registration, which would become a very costly thing to do must be considered. And let's remember how this provision came into being. It came into being in response to the Administration's concern over the fact that research was not going forward here to produce more effective and safer chemicals and chemicals for unfilled needs and so on. And why was this? Well, because this greatly increased expense of obtaining registration along with this trend that we have for the disclosure or making everything public knowledge so that we do not have the protection of one's own information.

Senator ALLEN. I feel I understand your position on that.

Mr. KAMPMEIER. That is how this came into being.

Senator ALLEN. It would encourage research and development? Mr. KAMPMEIER. Rather than in any way creating or perpetuating a monopoly or extending a patent life or anything.

Senator ALLEN. Thank you very much.

(Mr. Hertel's prepared statement is as follows :)

I am testifying today as Chairman of the Board of Directors of the National Agricultural Chemicals Association. The National Agricultural Chemicals Association (NACA) membership includes 113 basic manufacturers, formulators and associated suppliers of the agricultural pesticide industry.

I am a Vice President of FMC Corporation and the Division Manager of Niagara Chemical Division of FMC Corporation, Middleport, New York, a manufacturer of basic and formulated pesticides.

I have with me Mr. Parke C. Brinkley, President of the National Agricultural Chemicals Association, Mr. Carlos Kampmeier, Rohm and Haas Company, Philadelphia, Pennsylvania, past Chairman of the Board of Directors, NACA, and Mr. John D. Conner, our Association counsel and a member of the law firm of Sellers, Conner and Cuneo of this city.

As is evident from the record of the hearings before the Committee on Agriculture of the House of Representatives, the National Agricultural Chemicals Association has supported the objectives of the proposed legislation, i. e., to protect the public health and welfare and the environment by a comprehensive regulation of pesticides. As was stated by Dr. R. H. Wellman, past Chairman of the Board of this Association, during those proceedings:

Our industry understands and supports the need of the Administrator of EPA to have the legal power and the machinery to protect man and his environment, because we are people and this is our environment too. As a result we as an industry will support adequate regulation of pesticides to meet these requirements.

The pesticide industry throughout the consideration of H.R. 10729 and its predecessor bill in the House has supported improved and workable regulation of pesticides. At the end of the consideration of H.R. 10729 by the House Committee on Agriculture and passage by the House of Representatives, the industry believed that all major issues had been brought forward and had been given fair consideration. Although the bill as enacted by the House contained much with which we disagreed and omitted numerous provisions which we believe should have been included, the industry recognized that the House had given the bill prolonged consideration and had achieved its objective of reasoned progress. Accordingly, our Association supported the enactment of the bill in the House.

We still consider the bill generally to be fair and equitable. There are, however, a number of amendments which we propose for consideration by this Subcommittee. These amendments are attached to this statement designated as Amendments 1, 2, and 3.

Both from a substantive and a procedural standpoint the related amendments designated as Amendment 1 we believe to be the most important.

After passage of H.R. 10729 by the House, the Environmental Protection Agency on January 22, 1972 published proposed "Rules of Practice" to be issued under the present Federal Insecticide, Fungicide, and Rodenticide Act. In his testimony before the Subcommittee yesterday, Mr. David D. Dominick, Assistant Administrator, Environmental Protection Agency, said with reference to these proposed rules:

One additional point of comparison: we believe that the House Bill carries forward the policy of open administration of our regulatory system provided for by FIFRA as interpreted by the courts, the Administration's bill S. 745 and our recently proposed rules of practice. We do not believe that the language in the House Bill is intended to close the door to responsible citizens, user groups or State or Federal agencies seeking to participate in and thereby assist in improving our regulatory decision. These groups have standing. We are promulgating new rules to reflect this approach which are intended to permit an interested or affected person or group to seek review of a registration upon a showing that there is new evidence bearing on the registration or that the registration is inconsistent with present agency policy and the chemical in question is a significant problem. These requirements will prevent nuisance complaints and avoid disrupting agency priorities. They will prevent the chemical industry from having its registrations irresponsibly attacked. These rules will also insure that the administration of FIFRA will be kept in the first instance in EPA subject to Court of Appeals review after a record has been created so the judiciary can see the full picture.

The publication and proposed issuance of these rules raises a matter of substantial significance in the enforcement of the Federal Insecticide, Fungicide, and Rodenticide Act. We do not quarrel with the objective of the rules as stated by Mr. Dominick to prevent nuisance complaints, having the pesticide registrations of our industry irresponsibly attacked and keeping the administration of FIFRA in the first instance in the Environmental Protection Agency. We endorse these objectives. It is the considered opinion of our Association, however, that the proposed rules, contrary to discouraging irresponsible attacks, would encourage such actions. We further are of the opinion that the proposed rules are not authorized either under the present Act or under H.R. 10729 as it was enacted by the House. The proposed rules asserted for the first time the acceptance by the agency as the law of the land the decisions of Judge Bazelon of the United States Court of Appeals for the District of Columbia Circuit in Environmental Defense Fund v. Ruckelshaus and Wellford v. Ruckelshaus.

In previous testimony before this Subcommittee Mr. Conner, our General Counsel, discussed these decisions. That discussion will not be repeated in this statement. We invite your attention, however, to the fact that in both of those cases the Court was acting through a panel of only three Judges and by a 2 to 1 decision. In both cases both the United States Department of Agriculture and the Environmental Protection Agency, acting through the Department of Justice, contended that the Court had no jurisdiction. Insofar as we are aware, that position has never been changed. Likewise, we invite your attention to the fact that these decisions have never been followed by any other United States Court of Appeals. Accordingly we consider it to be inappropriate for the Environmental Protection Agency to promulgate rules or regulations for the purpose of implementing the decisions in these two cases. The explanatory comment which accompanied the proposed rules makes it clear that the primary purpose in promulgating the rules would be to provide a procedure which the Court in those cases was unable to find in the statutes (Federal Register, Vol. 37, No. 15, page 1059).

The proposed regulations would establish the right of third parties to petition for the cancellation of existing pesticide registrations, to require the Administrator to determine not only whether a cancellation notice should be issued but also to make a nonstatutory determination of whether the continued registration presented a substantial question of safety, the right of the third party petitioner in certain instances to compel the Administrator to issue cancellation notice even though he had determined that it should not be issued and the right of the third parties to compel the Administrator to issue an order continuing in effect cancellation after a favorable report of an advisory committee.

We propose in our amendments designated as Amendment A, an alternative procedure which in our opinion is fair and equitable to third parties who may wish to petition for the cancellation of registrations, to the registrants, and which is administratively feasible. Our proposal would achieve the following objectives:

1. Validity of Registration.-Paragraph A of our Amendment No. 1 would state as a statutory principle that registration by the Administrator of a pesticide shall be prima facie evidence that the pesticide, its labeling and packaging comply with the provisions of the Act. This is an unstated premise both in the present Act and in H.R. 10729. We believe the justification for this principle to be self-evident.

Section 3 (c) directs the Administrator to review an application for registration against three criteria. The burden to sustain that his product is entitled to initial registration is on the applicant.

The extensive research data which must be developed by the applicant to sustain this burden is set forth in Appendix A. A survey of research costs of the agricultural chemicals industry in developing new products was conducted in 1970 by National Agricultural Chemicals Association, using Ernst & Ernst to collect the data from the individual companies and in analyzing the data. This survey showed that the cost of discovery and commercialization, or the cost of discovery and registering the product under Federal Insecticide, Fungicide, and Rodenticide Act ranged from a low of $1,000,000 to a high of $12,000,000 or an average per pesticide of $5,493,000. The elapsed time from discovery to marketing after registration ranged from a low of 60 months or 5 years to a high of 108 months or 9 years, with an average of 77 months, or 6 years and 5 months.