(Bloomberg) -- Bayer AG is blocked from selling its controversial dicamba-based herbicide in the U.S. by an appeals court’s rejection of a federal regulator’s permit for the product.

The three-judge panel concluded the Environmental Protection Agency had “failed entirely” to acknowledge some risks dicamba poses and that the agency violated federal regulations when it extended its approval of registration for the herbicide for another two years in October 2018.

The ruling means farmers who bought seeds to be used with dicamba for this year’s growing season may not be able to plant them and will be forced to absorb the cost. Pesticides can’t be sold or distributed in the U.S. without EPA registration.

“We strongly disagree with the ruling and are assessing our options,” Bayer spokesman Chris Loder said in an email. “If the ruling stands, we will work quickly to minimize any impact on our customers this season. Our top priority is making sure our customers have the support they need to have a successful season.”Dicamba was originally manufactured by Monsanto Co., which Bayer acquired in 2018 along with its litigation. Monsanto developed dicamba after its blockbuster weedkilling product, glyphosate or Roundup, began losing its effectiveness, and farmers had to increasingly deal with resistant “super weeds”.

Dicamba is a central ingredient in Bayer’s XtendiMax, and can vaporize after being applied to crops and drift onto neighboring fields that aren’t resistant to the herbicide. It’s widely blamed for damaging 3.6 million acres of untreated soybeans in 2017, and more than 1 million acres in 2018.

In the first lawsuit over dicamba crop damage to go to trial, a jury in February hit Bayer and BASF SE with a $265 million damage award to a Missouri farmer who blamed the companies for destroying his peach orchards. Bayer is challenging the verdict.

The EPA “substantially understated risks that it acknowledged” concerning dicamba’s use, the appeals court said. In addition to Monsanto products, the ruling applies to other dicamba-based herbicides produced by BASF and Corteva Agriscience.In its ruling, the appeals court acknowledged the “practical effects” of the decision, including the cost to farmers who have already purchased soybean and cotton seeds genetically modified to withstand dicamba and planted for the purpose of using the herbicide.The court said in addition to the environmental risks, the EPA’s registration decision on dicamba failed to recognize the “enormous social cost to farming communities” where the herbicide’s use “has turned farmer against farmer, and neighbor against neighbor.” A farmer in Arkansas was shot and killed in an argument over dicamba damage in 2016, according to the ruling.

The ruling applies to the 2018 dicamba registration, which expires in December, Loder said, adding that Bayer is working on a new EPA registration for the 2021 growing season and beyond.The case is National Family Farm Coalition v. U.S. Environmental Protection Agency, 19-70115, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

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