Environmental Regulation, Market Power and Price Discrimination in the Agricultural Chemical Industry

Average prices of five chemicals were significantly higher in southern Alberta
than in northern Montana (Table 3). Four - LV 6 (2, 4-D Ester LV 600), Amine 4 (2, 4-
D Amine 500), Clarity (Banvel II) and Ally XP (Ally Toss and Go) - are selective
herbicides used to control broadleaf weeds in crops such as wheat and barley and on
fallowed or CRP land, and on other “non-cropland” areas. The fifth was the general
purpose insecticide Warrior with Zeon (Matador 120 EC).

Average prices for the remaining seven agricultural chemicals were statistically
significantly higher in northern Montana than in southern Alberta. Touchdown (and
Touchdown iQ) is a non-selective herbicide used for weed control on fallow and on non-
cropland areas. Bronate Advanced (and Buctril M), and Express XP (and Express Toss
and Go) are selective herbicides to control broadleaf weeds in wheat and barley and also
for fallow, CRP and non-cropland areas. Achieve SC (and Achieve Liquid), Discover
(and Horizon 240 EC), Everest (and Everest), and Puma 1 EC (and Puma 120 Super) are
selective herbicides used to control grassy weeds, including wild oats and pigeon grass,
in growing crops of wheat and barley.

Although the average prices of a chemical may be statistically significantly
different between Montana and Alberta, the economic importance of such differences is
what matters. If price differences are small, then Canadian and U.S. farmers may have
little to gain from the harmonization of pesticide regulations. The last column of table 3
shows the average price difference for each chemical as a percentage of the U.S. average
price for the chemical. In table 3, in three cases, the price differences are relatively small
and amount to less than 10 percent of the U.S. price, although in one case, Discover, that
represents an absolute difference of $52 per gallon. In eight cases, the price differences

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