INPUTTAXESSTILL VERYREALTHREAT

29 May 1998




INPUTTAXESSTILL VERYREALTHREAT

Input taxes are still very much on the governments agenda and need nipping in the bud

before Chancellor Gordon Brown includes them in his next budget. Here Andrew Blake

reports the very real fears that environmental levies on fertilisers and pesticides are just

around the corner. We also launch our "Just Say NO" campaign to nail input tax now,

before the government has a chance to introduce such a damaging policy

FARMERS must recognise that input taxes are still very much on the political agenda, says the British Agrochemicals Assoc-iation.

The 1998 Budgets minor mention of such levies was in line with BAA expectations and is no cause for relaxation, says distribution stewardship manager Patrick Goldsworthy.

"If a tax is to be introduced then the earliest this will be announced is in the 1999 Budget. But most MPs have no idea about the proposal."

In the meantime, the DETR is investing more taxpayers money to see how to implement a pesticide tax, he believes.

"The study will certainly have to include how to ensure imports of untaxed pesticides can be prevented." Alcohol smuggling currently loses the Exchequer £900m/year, he notes. "Even at the punitive 125% tax level a suggested pesticide tax would yield only £200m."

The research will also investigate how to separate pesticides into different tax bands using their environmental profiles, says Mr Goldsworthy. "This is not easy, as a recent review by the RSPB points out. Current methods do not apparently give the expected answers."

A third element will be to decide where in the supply chain – manufacturer, distributor or farmer – to impose the tax to obtain maximum effect at least cost.

Good work is already being done by the Pesticides Forum to minimise the adverse impact of pesticides, he notes. So BAA is disappointed to see continued interest in a tax which seeks to minimise their use. Before taxing them it believes the government should consider several points:

&#8226 Crop protection products bring a wide range of benefits to society. In the UK they ensure everyone has access to a wide range of good quality, affordable food. They also help maintain public health by controlling disease-carrying insects and vermin.

&#8226 The UK industry has an excellent safety record in using agrochemicals. Advances in technology, market forces, integrated crop management and retailer demands mean their use will continue to be refined and optimised.

&#8226 The UK has a first class regulatory system protecting operators, consumers and the environment. BAA is concerned that taxes will undermine the approvals process and distract farmers from the key priorities of operator safety and agronomic effectiveness.

&#8226 A tax imposed in the UK alone may encourage smuggling of unapproved and untaxed products from Europe. Uncontrolled imports and foreign language labels may jeopardise the UKs excellent safety record.

&#8226 The quality of UK water is good and continuing to improve. Minute levels of pesticides found in water pose no risks to public health or the environment.

&#8226 Wider CAP reform will have more impact on pesticide use and the environment than any agrochemical tax.

lWherever the tax is levied, the cost will be passed on to farmers. BAA believes a tax at 50-125 %, as suggested, would have a far more significant impact on farm incomes than has been identified.

&#8226 Evidence from two similar EU schemes is inconclusive on the merits of economic instruments and shows they have many complex interactions. BAA is also concerned about the quality of the data and research being used to justify the need for a tax and assess its impact.

"Many MPs have little or no idea about farming and the need to feed and protect crops," says Mr Goldsworthy. "Farmers should make the most of this summer to show their local MPs the vital role fertilisers and pesticides play in modern farming and explain that these inputs cost money and are not used indiscriminately.

"It would also be worth pointing out that a viable farm business is essential to support good practice and farm conservation. Too much financial pressure on farms will encourage shortcuts, risk bad practice and limit investment in conservation."

Dont imagine plans for input taxes are dead and buried – theyre still very much alive and part of the governments plans, warns the BAAs Patrick Goldsworthy.


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