Archive Article: 1998/06/20

20 June 1998


Pesticide taxation may be introduced in the UK. Anders Fällman reports on what more than 10 years of taxation on sprays has meant for Swedish growers.

EXTRA taxes on the pesticide bill hurt Swedish growers on their introduction but few now regret the disappearance of older, more toxic pesticides and have adapted to make a virtue of rational use of pesticides.

The level of tax was reduced when Sweden entered the EU four years ago but even before then arable growers were still finding it worthwhile to pay the tax and reap the benefits of improved disease and pest control.

Pesticide taxes were introduced in the mid-1980s when Sweden still had a regulated price system for exporting surplus cereals. The new tax was pitched at Kr46/kg of active ingredient used, and it generated about £10m for dealing with the exportable surplus. At that time no one believed the later claim that taxes were brought in because of government concern for the environment.

The cool Swedish climate means much fungicide and insecticide is used simply as insurance, although herbicide treatment is standard for the maintenance of trouble-free, long-term yields. Grower strategy was largely unaffected by the taxes although production costs were increased.

Göran Olsson, who grows about 90ha (220 acres) of cereals in southern Sweden, paid Kr4,000 in pesticide taxes in 1987 but it did not make him change his pesticide use. The potential losses in lower yields and poorer quality from not controlling pests and diseases were higher than the taxes even then.

Restricted use

The average Swedish grower now has about Kr20/ha in extra costs due to pesticide tax following a change in government approach when Sweden joined the EU. Before joining, higher and differentiated taxes were discussed but the agricultural lobby managed to prevent these. Instead they accepted that the authorities would set up a strategy designed to take several controversial products out of the market at the same time as modern alternatives were being introduced. Top of the hit list were very old products and those with particularly high mobility in soil.

Well-known substances such as atrazine, tri-allate and bentazone were lost or placed on restricted use. Most changes did not affect costs for growers greatly. The main exception being control of wild oats -required by law in Sweden and some other European countries – which now have to be controlled in some circumstances with more expensive herbicides. However, the cost of wild oat control in barley has been reduced by about 40% thanks to the introduction of fenoxaprop-P-ethyl .

The pure EBDC products for use against potato blight were rapidly taken off the market. The replacement Shirlan (fluazinam) is more effective against blight but also more expensive.

Farmers argued that the pesticide should be removed to allow Swedish exports to remain competitive in international markets after entering the EU. Instead, a Kr20/kg tax was introduced in 1994 and there is now no talk of change.

While it can be claimed that retaining the tax is a disaster, the reality is that the £3m now collected is hardly a matter of life and death for growers. However, the money, which is collected from the pesticide manufacturers and passed down the line to growers, is not earmarked for any particular use and goes to the Swedish treasury with no traceability back to the farmer.

The changes mean that Göran Olsson now pays about Kr1,300 (£102) annually in pesticide tax and he is among farmers who believe there are benefits from moving to modern pesticides and the advantage it might give in markets where Swedish grain competes with that from southern Europe where older, more toxic products continue in use.

Mr Olsson is chairman of Odling i Balans, a group similar to the English LEAF. "In the late 1980s we realised that people in Sweden were starting to have doubts concerning pesticide use and that the taxes did not seem to be bringing about the necessary changes in farm management," he says.

Odling i Balans was formed and drew up checklists and acceptable limits to measure the effective use of pesticides and fertiliser on farms. The organisation also developed the biological bed which uses plants to filter chemical residue off from spray washings and other potential pollutants in the farm yard. The principles developed by Odling i Balans are now being adopted by some buyers of grain who pay an extra 10% payment on contract if the grower meets certain production requirements. This is monitored by regular checks on the participating farms.

The latest concept put before Swedish growers is RECO. It is a government support available to growers signing up for five years. Conditions include adopting spray-free zones, a properly tested sprayer, a new soil map showing P & K and pH status, and a biobed. After meeting these requirements there is an estimated Kr36-67/ha left for the grower in the deal, depending on his farm size.

Behaviour change

"This gives Swedish farmers much more money than is lost through the pesticide tax," Mr Olsson points out. However, he believes the scheme could bring about a significant change in farmer behaviour which is much more important. "Groundwater and water earmarked for drinking water must not be polluted – if it is that will be the end for us," says Mr Olsson.

Reports of agrochemical residues in groundwater may mean major changes in Denmark where a number of major products are being withdrawn – among them all phenoxyacetic herbicides such as MCPA, together with linuron and mecoprop-P products and the pyrethroid deltamethrin (Decis).

Pesticide taxation in Denmark is imposed as a percentage of the recommended farm price – 36% extra for insecticides and 17% for herbicides and fungicides. The collection system is arranged so the agrochemical distributor has to pay the full tax on recommended prices even if the product is discounted on farms. Extra tax is payable if the distributor manages to obtain more than recommended prices.

The Danish government is now considering calls for a doubling of the taxation. However, agricultural experts are arguing even that would reduce insecticide use by no more than 8% because of the returns to be gained from controlling some of the more important pests in crops such as oilseed rape.

Pesticide taxes were abolished in Finland on its entry to the EU. Norway, which decided to stay out, is currently considering whether it needs to introduce pesticide taxation.

ÑExchange rate (7/6/98): £1 = Skr12.8

Installing a biological bed to remove potential pollutants from spray washings and yard spillages can gain Swedish farmers a grain price premium.

Installing a biological bed to remove potential pollutants from spray washings and yard spillages can gain Swedish farmers a grain price premium.

"Agrochemical pollution in drinking water will be the end for us" – cereal grower Göran Olsson.

See more