29 May 1998

NOHELP

TO THE

GREEN CAUSE

UKASTA does not believe input taxes would help the governments environmental objectives.

"Such taxes would be too blunt an instrument to achieve their purpose," claims spokesman Jamie Day.

"UK agriculture has already adopted a more responsible attitude to inputs, the benefits of which are starting to become apparent. The introduction of input taxes for short term political gain would actively threaten longer term progress towards a better environment."

The public sees modern agriculture as ruthlessly seeking to maximise profit using noxious chemicals to improve output at the expense of the environment, says Mr Day. "In spite of a range of industry initiatives to prove this is not the case, and that the environment largely depends on a healthy agriculture, politicians are tempted to take measures to curb rampant agribusiness for short-term credibility at the ballot box."

The latest threat comes from the DETR consultation document "Economic Instruments for Water Pollution", whose proposals adopt the polluter pays principle, he explains. Sources of water pollution, such as sewage treatment, industrial processes, urban run off, waste disposal and agriculture face taxes on their activities in order to improve water quality.

"The idea is that this will either raise funds for improvements to water quality or lead to a reduction in the polluting activity."

The issues that particularly concern UKASTA, on behalf of the agricultural supply trade, are the effects on the pesticide and fertiliser industries.

While the report acknowledges that not all pesticides are used in agriculture, it estimates that 80% of nitrogen and 50% of phosphate pollution arise from farming.

The DETR tries to make a case for cutting fertiliser and pesticide applications to improve groundwater quality. This could be achieved through better education and training, the use of voluntary agreements and codes of practice, or through the law, restricting the use of inputs, or imposing taxes. Greater use of crop assurance, and a tradeable permit scheme (permitting a quota exchange of active ingredients) are also discussed.

Then follows a sober analysis of the problem and options for action, says Mr Day. "Some bodies, but not UKASTA, feared that input taxes might be introduced at the last Budget.

"This is a long-term plan which will fit with the EU Nitrates Directive. The governments priority is to be seen to take action on the environment. As such it is a major threat to current agricultural practice."

UKASTA rejects the imposition of taxes as an effective way ahead, says Mr Day. "It has been well demonstrated that input taxes would have to be swingeing before any effect is seen. The cost-effectiveness of inputs in raising healthy crops means that a 10% tax would not bring a 10% drop in use. The document refers to a 125% tax rate.

"UK agriculture is currently reeling from the strength of the pound and low market prices. A unilateral UK input tax would further disadvantage UK farmers compared with their EU counterparts.

"There would be a knock-on effect encouraging enterprising farmers to source their products from the Continent, further reducing the UK balance of payments and destroying jobs and businesses in the input manufacturing and distributing sectors."

Farmers could also be tempted to switch to cheaper, older chemistry pesticides which are less environmentally friendly, he warns. "Wider use of such products could harm the image of the UKs emerging quality assurance schemes.

"The proposals are particularly worrying, coming at a time when all the evidence shows UK agriculture has addressed the responsible use of inputs, and is taking steps to reduce their environmental impact.

"Precision farming, still in its infancy, promises further reductions in inputs while safeguarding plant health, crop yield and quality.

"The objectives will be met by education and example, and UK agriculture is already some way down this road. Reform of CAP to link environmental objectives to support payments will reinforce this process," concludes Mr Day.

UK agriculture has already adopted an environmentally-friendly approach to crop inputs, says UKASTAs Jamie Day.