7 October 2000

Hop abroad to save

Could UK growers cash in on product price differentials across Europe? Tom Allen-Stevens discovers several barriers to overcome first.

YOU would have thought that now were part of Europe the national boundaries would have fallen away and trade across the EU would be completely free. Market forces would therefore decree that wherever you bought a particular product in Europe, the price would be roughly the same. Thats the way it works with grain, but with agrochemicals the situation is not so straightforward.

This is what Dr Christopher Wise of the NFU has found in his consultations with the Government, aimed at cutting red tape, and its led to some pretty significant price differences, he says: "We might accept that prices could be a wee bit higher in the UK, because of transportation over water but we know of some products that are over 30% more expensive here. Price hikes of that magnitude are unsustainable. We want a simple method of importing for own use to encourage manufacturers to bring their prices in line."

Lying at the heart of the problem is the regulatory system run by the Pesticides Safety Directorate (PSD). Manufacturers have to take products through a costly and time-consuming approvals process before they can be used here. A similar system runs in every country of the EU. Although now governed by a EU directive, a chemical approved for use in France does not mean it can be used here.

"If you want to go to France and bring back some French herbicide, for example, you need to get specific approval from PSD," explains Dr Wise. "Before giving approval, the PSD will ask you to provide proof that the product is identical to one approved for use in the UK. That often requires help from chemical manufacturers, who are under no obligation to make life easy for you."

The process also costs £290 and takes around four weeks, says PSD. Approval for that specific product will then last for as long as the identical product is approved for use in the UK and for as long as its formulation stays the same. But it is exclusive to the person who receives it; a neighbouring grower who wants to import the same product has to go through the same approvals procedure and pay again.

"If the product is identical, you do wonder why you need to seek approval at all?" asks Dr Wise. The NFU has suggested putting into the public domain (on the internet, for example) a list of all EU products that have been approved for parallel import into the UK as a means to assist growers to avoid duplication in this process. But PSD argues that since those individuals who have sought approval paid for it, it is commercially sensitive information, and therefore should remain confidential.

Another problem, points out Dr Wise, is that because the process is currently so wound up in red tape, very few parallel own use import applications have been sought, so the list would not be a very long one anyway.

Paul Waberski of Brown and Co has experienced this red tape for himself. He acted on behalf of a group of farmers to gain approval to import Opus and Ensign last year – both BASF products. "These displayed the biggest variation. But although we lodged the approval in good time, we didnt receive it until harvest – way after the chemical was needed. BASF had brought the prices more in line by then as well, so although it was a drawn out and frustrating procedure, we achieved the objective of lower prices."

Now, along with some colleagues, hes working to lift the secrecy that surrounds prices in the UK. He holds a database of over 500 farmers who tell him their prices in return to access to the league tables he draws up. "Weve already seen some surprising results. Maybe this will add some transparency."

But agronomist and Crops French writer Jonathan Hough believes the chance to cash in on price differentials may have gone. Living and working in France, he exports lorry loads of French chemicals every year for UK growers: "Up until last year there was a big price difference between France and UK, but thats come down quite substantially. Theres much less demand now as UK prices have aligned with those on the Continent."

The experience has certainly left some feeling bitter at what they see as a protectionist racket, however: "The PSD stood in everybodys way for our application for Opus. They delayed it and delayed it. Soon after we finally got a licence, the imported formulation changed slightly so that our licence is now null and void. The chemical companies have PSD in their pocket," alleges one grower.

Such collaborations are hotly denied by PSD, which argues it is bound by legislation. The question of whether it is necessary to prove identicality has been put to the EU court. The matter was referred back to the UK courts which decided last November that the requirement to prove exact identicality stands. "You have to remember that there are far more people who want pesticides banned altogether. Now that theres been a court ruling, its really out of our hands," says MAFF.

Prosecution

Its not the only court case surrounding pesticide imports. Alan Searby, a Lincs grower, is currently being prosecuted on 38 counts of illegally importing pesticides into the UK. Its not the first prosecution of its kind, but one that is likely to give MAFF a bit of a headache; the firm of London solicitors defending the case succeeded in extracting £30m from MAFF for Spanish fishermen during the cod wars.

Questions about EU and UK legislation will undoubtedly arise in this case. Another unknown is how the Treaty of Rome, which bars any protectionist measures on imports between countries in the community, applies in this case. The hearing, set for January next year, could have far-reaching implications for UK growers.