Treasury Ministers have abandoned plans to introduce a pesticides tax on agriculture in the next budget.
Instead, they will rely on voluntary proposals from the British Agrochemicals Association (BAA) to improve the way in which farmers use pesticides and protect the environment.
With farmers protesting about an economic crisis, Tony Blair, the Prime Minister, told the National Farmers Union annual meeting that the tax had been dropped. But the Treasury statement does not rule out discussing the tax in future, nor does it make any reference to any similar proposals which could be introduced by the European Union.
Treasury statement
In November last year, the Government said that a tax or charge on pesticide use could be a useful tool for reducing environmental damage. Since then, the BAA has produced proposals for what Stephen Timms, the financial secretary to the Treasury, called a ‘partnership approach’. The Government, he said, thinks that a ‘… voluntary approach has the potential to take forward its objectives to minimise the use of pesticides consistent with adequate crop
protection.’(1)
Ever since the tax was first proposed, PAN UK has argued for a flat-rate tax on the sales of agrochemical products. ‘We accept the argument for a tax based on the weight or dose of pesticides sold in particular toxicity “bands”, but prefer a flat rate tax levied on pesticides sales as a more straightforward way to raise revenue,’ said PAN
UK in evidence to the House of Commons Environmental Audit Committee.
ECOTEC, a research consultancy, worked out a detailed pesticides tax-banding scheme for the Department of the Environment, Transport and the Regions (DETR). This would have based the tax on a product’s toxicity. In response to the Treasury statement, Dominic Hogg, an associate director of ECOTEC, said that one approach would have been to tell the farming industry to be ready for a pesticides tax once their incomes improved.
Companies taken aback
The BAA was surprised by the Treasury’s announcement and had not had a formal response to its proposals by early February. Richard Trow-Smith, the BAA’s spokesman, said its document highlighted three concerns: the environmental impact of pesticides and their potential effects on biodiversity and water quality.
‘We said we would address these in four areas of work,’ said Mr Trow-Smith. ‘The first is research, where although we put large data packages in on pesticide products for their approval, there is a lot more to be understood about the wider picture on the farm.’ Secondly, the right information had to be available for farmers so they knew precisely how and when to use a product. Thirdly, standards of advice and pesticide application had to be uniformly high; and finally, the BAA wanted to improve environmental awareness so that everyone from a company’s field staff and advisers up to managers was aware of the risks from pesticides and knew how to deal with them.
Sanctions possible
But Mr Hogg said to be of any value, this kind of voluntary agreement between the BAA and the Government would have to set targets for the agrochemical industry and introduce sanctions if they were not met. For example, the Dutch Parliament had made voluntary agreements to try to reduce energy use. ‘The Dutch experience is that there has not been the same level of reduction in energy use as there has been in the Nordic countries which use taxes.’
Conclusion
PAN UK is unhappy that Number Ten has apparently announced that it will consider proposals direct from BAA without consultation before deciding whether or not to include a tax in the next budget (see also page 19).
References
1. New partnership with agrochemicals industry welcomed, Timms, Treasury press release, 1 February 2000.
[This article first appeared in Pesticides News No. 47, March 2000, page 16]