16 October 1998

Spray taxes could hit potato growers worse than others

By Jonathan Riley

BRITAINS potato industry could be devastated by cheaper imports if the government adds to production costs by imposing pesticide taxes on growers in its autumn budget statement.

The first indications from an NFU study show that input taxes could cut arable farmers gross margins by 20%, with the potato industry likely to be hardest hit.

NFU policy director Ian Gardiner said provisional results from the study suggested pesticide taxes would have to be disproportionately high in order to alter production practices.

The union believed that the government was considering a sliding scale of taxes, with chemicals presenting the greatest risk to the environment taxed at high rates to discourage their use.

"In the study, tax levels of 175% of market price have been considered for the most potent pesticides, while the least potent chemicals would attract virtually no tax," said Mr Gardiner.

That meant the potato industry could be the worse hit because of its need to use more toxic chemicals. And that would allow competitor countries to take control of the British market.

Chairman of the British Potato Processors Association, Richard Harris, said it would not only be growers who suffered. The 16,000 jobs in the processing industry would also be in jeopardy if government added to growers costs which, in turn, drove prices above those of foreign competitors.

"It is a hugely competitive industry which handles 2m tonnes of the crop and is worth £2bn-£3bn a year. Potato growing has no support mechanisms and no subsidies and has fought for its market, a market which has expanded and is forecast to continue expanding.

"We are in a common market where we are supposed to be allowed to compete on equal terms. Farmers cannot absorb costs of this magnitude and remain competitive," he said.

In a plea to the government, Mr Harris said: "Why do you want to penalise an industry that is doing all it can with assurance schemes and which is using a minimum of pesticides already?

"Ministers. Government. Please, please think again. If you want to cut pesticide use, this is not the way. All a tax will do is raise revenue for the treasury and cut jobs."

Richard Watson Jones, chairman of NFUs potato committee, said the crop needed a range of pesticides to meet supermarkets exacting standards.

"We have to produce potatoes of an even size with unblemished skins. That means we have to use pesticides to counter various skin diseases, while pests such as eelworm need effective chemicals to eradicate them."