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TheStreet Open House

Bayer Battles New Insecticide Research Affecting 20% of Sales

However, Fischer insisted that to be harmful to birds concentration levels of imidacloprid would have to be above 100 parts per million -- far higher than those cited in the study. Similarly, the levels found in surface water noted by the study were not high enough to affect the birds' food supply.

"Therefore, there is no reason to expect that imidacloprid is reducing the availability to birds of insects emerging from these aquatic habitats," Fischer said.

An important factor overlooked in the recent scientific research, Fischer said, is how much safer neonicotinoids are compared to previous insecticides.

The chemical DDT, once used to spray crops and city streets to kill harmful insects, was famously banned in the 1960s as a result of the outcry from environmentalists and scientists, spurred initially by the work of science author and researcher Rachel Carson, whose findings were summarized in the 1962 book, Silent Spring. The movement that was launched in the fight to ban DDT eventually resulted in the creation of the Environmental Protection Agency in 1970.

Organophosphates, or so-called "soft pesticides," served as replacements for DDT but also had a broad impact on the immediate environment, killing birds and other creatures.  

"[T]hey didn't stick around as long [as DDT], but they were a lot more toxic, directly toxic to wildlife," Fischer said, adding that he considers the development of neonicotinoids "a major milestone.  ... an order of magnitude less toxic," he said.

The Netherlands study was instigated by evidence compiled and published by scientists weeks earlier concluded that neonicotinoids were impacting the environment more than previously believed. This has led the Natural Resources Defense Council to petition the EPA to withdraw its approval for neonicotinoids.

Bee Buzz

Bayer CropScience's ubiquitous corn seed treatments contain imidacloprid. From the seed coating, the chemical permeates the entire plant as it grows, spreading into the soil. As insects and worms eat the treated plant, the toxin binds to their nervous receptors, eventually causing death. This direct effect seems limited to insects, worms and certain types of birds, like the house sparrow.

The treatments came under fire when they were connected to Colony Collapse Disorder among bees. Farmers depend on bees for pollination of crops and the large die-offs have quickly gained international attention. While Bayer insists doses of the toxin found in plants are too small to affect bees, researchers suspect a link, possibly through a buildup of the toxin over time, its transference in the air or its interaction with other chemicals in the environment. Imidacloprid has not been proven as a direct cause of CCD, but remains a prime suspect and scientists in Europe and the U.S. are conducting tests to determine its role, if any.

Last year, in response to scientific studies and public concerns, the European Union issued a two-year ban on certain neonicotinoid insecticides. The policy affects Bayer products and Syngenta's Cruiser insecticide, which uses a different neonicotinoid, thiamethoxam. Syngenta claimed the affected product was not implicated in the bee research, which raised concerns regarding dust in the air from "a competitor" product.

Not all neonicotinoid insecticides were banned by the E.U., Fischer said, and the effect on Bayer, assuming the ban is eventually lifted, will be limited. However, in an email to TheStreet, he noted, "A study issued January 2013 by the Humboldt Forum for Food and Agriculture (HFFA) concluded that suspension in the EU of neonicotinoid technology would result over a five-year period in loss of 17 billion euros and 50,000 jobs."

Risk of Bans Elsewhere

Imidacloprid has proven so successful as a pesticide that it has been adopted in many consumer uses well beyond farmers' fields. It is the active ingredient in Bayer's Advantage flea and tick medicine for pets, along with termite treatments, tree and shrub care products and others.

The chemicals have been proven safe for mammals and Fischer insisted there is no risk to humans or pets. However, the authors of the Netherlands study are skeptical. Although stipulating that he was not an expert on the effects of consumer insecticides, Hallman said, "We (as a research team) are particularly worried about the negative effects these chemicals have on our ecosystem once they have leached into the environment. Prohibiting contact of non-target organisms with chemicals designed specifically to kill insects is a MUST to our opinion."

Such concerns about neonicotinoids, coupled with their widespread use, are also attracting the attention of other government regulators. Ontario recently announced it is weighing regulations to tamp down widespread use. The current petition of the EPA and environmentalists' lobbying efforts point to the possibility of U.S. federal government action. 

Should a ban on neonicotinoids or Bayer's imidacloprid products, in particular, be enacted in the U.S., Bayer CropSciences and Bayer Group could see a significant hit. The loss of sales of treatments for corn seed alone would be huge. The fallout would likely also directly impact sales at Syngenta and Monsanto.

Regarding the prospect of a U.S. ban for Bayer, Fischer said, "I'm not allowed to discuss our sales figures. It's something that certainly gets our attention, let's just say that."

Fischer insisted that concerns about neonicotinoids are misguided, the result in part of flawed scientific studies, and that his company would not be producing these products if it thought they were harmful to wildlife and the environment.

"We want to get the truth out," he said.

-- Written by Carlton Wilkinson in New York

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