Slash EU fertiliser taxes to cut farm input costs – IFA report

Abolishing EU fertiliser import duties could save farmers about £780m and create more farming related jobs, says a study for the Irish Farmers Association (IFA).

The IFA commissioned the International Food Policy Research Institute (IFPRI), based in Washington, US, to examine competition in Europe’s fertiliser industry as part of a bid to drive down input costs.

Fertiliser prices remain stubbornly and excessively high, said the IFA, when farm incomes were under huge pressure.

See also: Farm input prices fall….but not enough

“It is clear from the data collected that Europe’s market is not functioning as the duties and tariffs protect European manufacturers at the expense of farm families,” said IFA national chairman Jer Bergin.

The association wants an urgent investigation by the EU Commission on the evidence put forward by the report, which includes a projected net jobs gain of about 17,000.

The European Commission should abolish duties and border taxes in the first instance as these only served to protect European fertiliser producers at the expense of farmers, said Mr Bergin.

The report said that price fixing and cartels might be operating in the highly concentrated markets such as Western Europe, and called for the need to further examine pricing behaviour and potential market power exertion in the industry.

It was presented to EU Commissioner for Agriculture Phil Hogan today (Tuesday 1 March), by IFSA which also met with the trade and internal markets directorates of the commission.  

“Fertiliser is the second biggest expenditure for Irish farmers with an annual spend of over €500m and the commission must take action as family farm incomes are on the floor,” said Mr Bergin.

The report looks at how the European fertiliser market functions and compares it to other major agricultural producing regions.

“The ongoing concentration of Europe’s fertiliser manufacturing industry, coupled with greater vertical integration of the sector’s supply chain, has seen farmgate fertiliser prices increase at an unjustified rate relative to other input costs,” said IFA inputs project team leader James McCarthy.

“The industry historically blamed the disparity on rising energy costs. However, the steep fall in energy prices over the last two years has not been reflected in retail fertiliser prices to the primary producer.”

Copa-Cogeca, which lobbies for farming and farm co-operative interests at a European level, is supporting the IFA’s call for the market situation to be addressed. 

“The significant drop in prices on the global energy markets, even allowing for the appreciation of the US dollar against the euro, has not resulted in a proportional decrease in the price of mineral fertilisers along the entire chain, from the blending stage, through distribution, right down to farm level,” said Copa-Cogeca secretary-general Pekka Pesonen.

“Tools to manage risks on the mineral fertiliser market do exist, yet they are inappropriate and unavailable at farm level.

“We call on the EU Commission to temporarily set import duties at zero with immediate effect for the products listed in chapter 31 of the customs code and for ammonia (chapter 2814) and remove anti-dumping duties on ammonium nitrates from Russia,” he added.

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