MEMORANDUM SUBMITTED BY THE NATIONAL FARMERS'
UNION OF SCOTLAND (V3)
SUMMARY
1. In summary, the Union's views are as
follows:
— Under the polluter pays principle,
the costs associated with the Integrated Pollution Prevention
and control (IPPC) should be recovered from those found guilty
of causing pollution, not as proposed from all producers in relevant
sectors.
— The scale of IPPC charges which is
proposed to be applied to intensive livestock units is excessive
relation to potential pollution, and to regulation costs.
— Much of Scottish agriculture, and
the intensive livestock sector in particular, would not be able
to pass on extra costs to their customers. Farmers and growers
cannot afford more charges and regulatory costs.
— It is unreasonable to regard raw
material handling (animal feed) and waste handling as a separate
component from the rest of an intensive livestock unit. This more
than doubles the total charges under the IPPC.
As low potential polluters, pig and poultry
units should not be brought under IPPC until the end of the implementation/transitional
period.
The concept of the proposed climate change levy
as an environmental measure is fundamentally flawed as far as
agriculture is concerned.
Were it to be introduced without further amendment,
its effect would be discriminatory against agriculture.
Rather than amend the proposal to deal with
the balance of employment and energy usage within agriculture,
it is recommended that agriculture be exempted.
INTEGRATED POLLUTION PREVENTION AND CONTROL
BACKGROUND
2. The UK Government opposed the extension
of the IPPC Directive to the agricultural sector. Its opposition
was based on the knowledge that:
— when compared with other industrial
activities, intensive livestock units were likely to have a trivial
environmental impact; and
— sufficient controls were already
in place.
3. Having failed to keep agriculture out
of the IPPC the Government gave assurances that it would seek
to minimise the impact on the intensive livestock sector.
4. Pig producers are currently losing around
£16 on every pig they sell. Many egg producers are also losing
money, and broiler unit margins are tight or negative. Regulatory
costs have made UK production uncompetitive and should not be
increased.
5. The Scottish Parliament is reviewing
the burden of regulatory controls—to reduce unnecessary
cost. It is inappropriate to impose further charges during this
review.
IMPLEMENTATION OF
IPPC
6. Potential benefits. Controls on agricultural
pollution are already in place. The IPPC will not improve environmental
protection. Energy requirements have been increased by welfare
legislation that has reduced stocking densities.
7. Scope. Government plans for the IPPC
would unnecessarily duplicate controls on the scale of operations
and safety. These are best left to the existing planning system
and the Health and Safety Executive.
COSTS
8. Principles. The proposed system of charges
breaches two principles. We believe that there is no "value
for money" to farmers. Under the polluter pays principle
those guilty of pollution should pay, not those who might pollute.
We also believe that the suggested charges on livestock units
would produce "profit" to subsidise the cost of installations
in other industries. We base this on the much lower costs of monitoring
by the quality assurance schemes.
9. Competitiveness. The level of charges
applied in other Member States, and the overall burden of regulatory
controls should be taken into account when setting charges. UK
industry should not be put at a competitive disadvantage in order
to meet Treasury guidelines.
10. Charging formula. It is unreasonable
to consider the handling of feed and dung as being separate activities
from the rest of the running of a livestock unit. This automatically
doubles SEPA's charges to a minimum of £7,894 for registration
plus annual charges of at least £2,674.
11. Data provision, Farmers should not be
required to provide data that forces them to purchase expensive
monitoring equipment, needing specialist skills.
TRANSITIONAL TIMETABLE
12. We believe that installations which
present the greatest risk to the environment should be brought
under the Directive first. Poultry and Pigs should be left to
the end of the period.
ENFORCEMENT
13. Under the proposed scale of penalties
an operator who fails to inform SEPA of a change within 14 days
could be more severely punished than one who fails to comply with
the requirements of his permit. This is illogical. Also, it is
proposed to shift the burden of proof onto operators accused of
offences. this is unjust.
CLIMATE CHANGE LEVY
ENERGY USE
14. Energy use within agriculture varies
considerably as between seasons and between branches of agriculture.
Identified significant energy uses, significant in terms of input
costs, are:
— glasshouse and nursery sector—space
heating;
— dairy—milking and storage equipment;
— arable—grain drying, when required;
— pigs and poultry—heating and
ventilation.
In addition, all agricultural activities require
energy inputs, particularly in the winter period which can be
longer in Scotland than in England and Wales.
15. Energy is one of several input costs
which have to be carefully managed. Depressed revenue across all
sectors, occasioned by the strong pound in large part, has concentrated
attention on cost reductions. Any scope for further energy economies
will have been examined and acted upon. Therefore, the imposition
of additional taxation would not serve any energy-saving objective.
16. Nor would this tax be capable of being
passed on by primary producers up the supply chain. Severe competition
from imports—actual or potential—has had substantial
revenue effects. This demonstrates that the industry is a price
taker. It would therefore be obliged to absorb these charges,
thereby weakening its viability even further.
EMPLOYMENT
17. The proposal to re-apply funds raised
by the levy through reduction in employers' national insurance
contributions would also discriminate against agriculture. Much
of the sector's employment generating effects are in upstream
and downstream industries. And employment within the sector involves
self-employment to a large extent. Therefore, the limitation to
employers' contributions would mean only a small inflow of funds
to the industry.
18. This problem of a potentially highly
taxed sector with little scope for refunds might be countered
by recycling funds wholly within the sector. However, the administrative
expense of allocating funds is liable to be considerable, given
that employers' national insurance contributions could not be
an equitable basis. It is therefore recommended that the industry
be wholly exempted from the levy and from the distribution of
proceeds.
ECONOMIC IMPACT
19. A further consideration is the effect
of the proposed measure on competitiveness.
In agricultural produce markets, the measure
would be sufficient to precipitate significant closures and contractions.
Loss of output would be unavoidable—as demand is transferred
to other sources of supply. This would have knock-on effects in
suppliers to agriculture and in processing and distribution of
output. The effect would be expected to be particularly severe
in rural areas with limited opportunities for alternative economic
activity.
20. The consequences would include more,
rather than less, transport of food — thereby contributing
to energy usage. Further depopulation of rural areas would have
implications for social infrastructure and pressure of demand
for services in the recipient areas of in-migration. Those adjustments
would also have effects on energy demand. These effects would
be entirely contrary to the intentions of the tax.
6 January 2000
| 
