Select Committee on Environmental Audit Minutes of Evidence

Memorandum from The Pesticides Trust


  1.  The Pesticides Trust is grateful for the opportunity to submit evidence to the Committee. Our submission introduces the Trust and our interests, and goes on briefly to examine pesticides and their impacts, and the economic and political context into which pesticide taxes fit. We summarise the Ecotec proposals, and report on initiatives in other countries. These raise issues that we examine, and suggest an alternative approach. We specifically consider the possible impact of a pesticide tax on employment, and then make comments about the monitoring and assessment of pesticide impacts.

  2.  Our conclusions are these:

    —  We support the idea of a pesticide tax to help pay for the externalities of pesiticide use;

    —  Such a tax has to be seen in a European context, and also in the context of other economic instruments that affect farmers—particularly CAP, Agenda 2000 and support for "environmentally-friendly" farming;

    —  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 the sales of pesticides as a more straightforward way to raise revenue;

    —  A tax in whatever form should raise revenue that is returned to agriculture as support for research and information on non-chemical and lower input pest controls and organic systems;

    —  There will be costs imposed by a tax but the evidence is that there will also be opportunities for employment and innovation;

    —  There is a need for monitoring and assessment of the environmental impacts of pesticide use, and we suggest some indicators that may assist; and

    —  To support such a process a policy that goes beyond pesticide "minimisation" is needed. The aims should be to reduce pesticide use, dependency and impacts together with a mandatory reporting of pesticide sales by active ingredient and a mandatory requirement for users to conduct an environmental impact assessment on pesticides used.


  3.  The Pesticides Trust is a science-based charity, concerned with the health and environmental implications of pesticides. We were established in 1987 and have a comprehensive interest in all aspects of pesticides. We work on pesticides problems and solutions in the UK, the European Union and in developing countries worldwide. The aims of the Trust are:

    —  to reduce the hazards from exposure to pesticides;

    —  to improve sustainable livelihoods for farmers and growers; and

    —  to promote alternatives to pesticides in agriculture, public health and other sectors.

  4.  We are funded by UK charities, development agencies in the UK and Europe, European governments and the European Commission, and undertake consultancies where consistent with our charitable remit. We have work programmes in the UK, Europe and Africa. We produce the quarterly international journal Pesticides News which circulates in 90 countries, together with briefing papers and research abstracts. We produce information on pesticides for users and sit on the UK government Working Party on Pesticides Residues (WPPR), the joint MAFF/DETR advisory body Pesticides Forum, and the HSE body Biocides Users Group (BUG). We also carry out consultancies for the European Commission and attend a number of UN Expert Groups on pesticides issues. We also operate a "help" line for those who consider they have been adversely affected by pesticides.


  5.  Pesticides are different from many other chemicals. They are toxic, intended to harm living systems; they are the only toxic chemicals deliberately released into the environment. They are widespread—residues are found at the Poles, in air, sea, food soil and water. They have impacts at small quantities. Residues in food are measured in parts per million; residues in water in parts per billion; and parts per trillion of some pesticides have adverse impacts on marine fauna.

  6.  Because of the possibility of adverse impacts pesticides are controlled by law. There are over four hundred pesticide chemicals (active ingredients) approved for uses in the UK, and they are all different. In 1997, UK pesticide sales were £494.4 million, representing 25,236 tonnes, most of which was used in agriculture and horticulture[10].

  7.  Pesticides have brought benefits in the relatively short term to the production of food and fibre. These benefits are described extensively in the literature. What is at issue in this submission is the costs to the wider society to produce these benefits, and whether they are sustainable. The misuse, overuse, and abuse of pesticides can lead to adverse effects on human health, and the environment. One tablespoon of herbicide carelessly used near water can pollute drinking water for 200,000 people according to MAFF; and over 30 per cent of the UK arable acreage is sprayed by operators who have no training. However, the ordinary everyday legal and continuing use of pesticides according to current label directions is a more challenging threat.

  8.  Government policy is to "minimise" the impacts of pesticides, but this is clearly not working. Although pesticides have been in widespread use in the UK for fifty years, increasing regulation has barely kept pace with increasing use and increasing pollution. The number of pesticides exceeding environmental quality standards (EQSs) in waters in England and Wales almost doubled in 1996 to 14 per cent of the total monitored by the Environment Agency. According to Ofwat, the annual cost of removing pesticides from drinking water is £1,000 million. RSPB and others noted an 89 per cent decline in sparrow numbers from 1969 to 1994; and 82 per cent for grey partridge and 58 per cent for skylarks—the decline is based on herbicide and insecticide use destroying the birds' food chains. Ther are many factors that have contributed to agricultural change, and pesticides are not the sole cause but are clearly implicated.

  9.  It may be said that newer pesticides are more targeted, and have no or minimal environmental impacts. It may well be the case that newer products are more specific. Nevertheless, farmers are tending to use more products. Newer molecules are active at lower doses but may have more environmental and non-target impacts weight for weight. As science progresses we are aware of more and different impacts of pesticides: endocrine disruption is one of the most recent. For a number of pesticides that have been in use for over forty years such as the insecticide lindane, the herbicide 2,4-D and some organophosphates data on environmental impacts are lacking. Although newer products might be more desirable from an environmental point of view, older more broad spectrum products which are out of patent will always be cheaper and remain in use.

    We are of the view that all pesticides, even the latest products and even when used properly, will have environmental impacts.


  10.  The current government has set in process discussion and consultation concerning pesticide taxes. The current position is that the DETR consultants' report has been published[11] (the ECOTEC Report). The Chancellor recently announced in his pre-budget statement that further discussions would be held with the agrochemical industry prior to the next budget on ways to meet the government's objectives to minimise the environmental impacts of pesticide use.

  11.  There is international authority for taxing pesticides. The European Union in its Fifth Environmental Action Programme proposed financial incentives and liabilities for pesticides use. OECD has recommended that governments consider taxing pesticides. Tax regimes operate in Norway, Sweden and Denmark. Proposals have been announced in France. In the UK a levy is already imposed on the turnover of the major agrochemical companies to fund part of the government's regulatory activity. The current levy is of the order of £7-8 million per year to support the pesticide approval and regulation work by the Pesticides Safety Directorate, the executive agency of MAFF. Farmers pay also levies to produce organisations such as the Home Grown Cereals Authority to support research.

  12.  Any tax change has to be seen in the context of the impact on agricultural incomes, which in recent years have gone down dramatically. Any tax should also be seen in the context of the Common Agricultural Policy (CAP) and the changes currently proposed in the Commission's Agenda 2000 document. Preliminary costing by MAFF suggests that the annual loss in terms of farm incomes may be £150 million per year compared with incomes that farmers would have earned before the reforms[12]. The public pays through the general tax system to support CAP subsidies to agriculture but only 3 per cent of the £3 billion spent on farm support in the UK is currently allocated to environmentally sensitive farming schemes. And although farm incomes depend of course on the farm's production and profitability, changes in the exchange rate of the green pound can dwarf the impacts of input costs and taxes.

  13.  There are also significant private initiatives that support farmers to reduce their use of pesticides and reduce the associated environmental pollution. The leading water company Wessex Water has offered farmers a subsidy per acre in an attempt to reduce nitrate leaching; other water companies are considering subsidising farmers not to use pesticides—some German water companies already offer farmers support for organic conversion.

    Any tax on pesticides has to be seen in the overall context of other economic instruments affecting farmers' income, and of European CAP Reform.


  14.  The purpose of the proposed tax outlined in the report of ECOTEC was to change user behaviour, and in particular:

    —  To secure reductions in pesticide usage;

    —  To achieve substitution either by less harmful pesticides or by alternative techniques;

    —  To increase efficiency in usage by improved targeting; and

    —  To provide incentives for environmental protection measures.

  15.  A number of options were examined: these included the consideration of firstly whether a tax should be "banded" on the basis of the toxicity of the pesticide active ingredient per kilogram weight. Banding was chosen as this appeared to relate environmental benefits more closely to taxes. An illustrative average tax of 30 per cent of the product price would raise some £85 million—£130 million which according to ECOTEC "broadly correlates with available environmental damage cost estimates."

  16.  There would be impacts on many actors in the chain, principally farmers and consumers. In the worst case estimate, the costs to farmers (£110 million) represents three per cent of farm income; the costs to consumers represent less than 0.1 per cent of total household expenditure on food. There would be differential impacts depending on the type of enterprise involved. The impact of a pesticide tax on gross margins is between one per cent and two per cent and is fairly uniform across farm types. The impact on profitability varies considerably, typically reducing net farm incomes by five per cent to 13 per cent. It is said that the overall effects on total sales from UK manufacturers is likely to be small given the significance of exports.

  17.  Farm competitiveness has many elements. It is the ECOTEC view that a pesticide tax is unlikely to be the principal determinant of competitiveness. The impact of a 30 per cent tax is typically equivalent to a two per cent reduction in output, which as indicated above is dwarfed by the implications for farmers of exchange rate movements and associated changes in the green pound. The revenue raised would be directed to financing services to assist users to minimise pesticide use.


  18.  Denmark has taxed pesticides for some years. In 1998 changes were proposed so that pesticides would be taxed at a rate of between 15 per cent and 54 per cent of the retail price, depending on the type of pesticide. This measure is expected to increase revenue from US $32 million in 1998 to US $55 million in 2000.

  19.  Norway taxes pesticides according to their toxicity and a factor that takes account of the standard dose used in relation to the area treated. Based on a tax of 15.5 per cent of the wholesale price, the tax raised about £1.8 million in 1996.

  20.  California, the world's fifth largest agricultural economy, has for some years imposed a "mill" tax pesticides. Recent legislation has set the tax at 17.5 mills (which represents 1.75 cents per dollar sales). The mill tax is expected to raise $26 million per annum.

  21.  Sweden and Belgium have pesticide taxes, and France is also proposing a banded pesticide tax. Scandinavian agriculture is generally a smaller sector of the economy than UK agriculture, and grows a smaller range of crops—but has almost no agrochemical producers. France and California have much larger and more intensive agricultural sectors and agrochemical industries.


  22.  It will be very difficult to measure whether taxing environmentally polluting products will achieve the object of the exercise in reducing environmental impacts. As previously indicated there are some 400 active ingredients involved, and analysis of residues in food and water and impacts on the environment and biodiversity is complex and expensive.

  23.  Pesticides can also be taxed by the number of doses bought, as given by the label directions. However, the same product may have different dose rates depending on the pest, crop and situation.

  24.  The banding issue is interesting. The ECOTEC Report contains a very helpful working out of the particular tax bands that a selection of active ingredients would occupy. The direct toxicity impacts to a number of species including trout, algae, worms, bees, quail/mallard ducks, and groundwater were compared. We ourselves looked at other aspects of toxicity that might be factored in to the equation, particularly indirect effects. These included whether or not chemicals exerted additive effects, or were potential endocrine disrupting substances, or broad spectrum products, or persistent, or where significant environmental data gaps had been identified. The result was that consideration of the indirect effects of pesticides according to the criteria chosen would effectively move half ECOTEC's sample of 75 active ingredients into one or two higher tax bands.

    A chemical-by-chemical approach is a difficult exercise; farmers need to reduce use of, the risks from and the dependence on all active ingredients, not just some. It is also important to monitor and assess pesticide impacts—irrespective of a tax.


  25.  There can be two reasons for imposing a tax—either to change behaviour, or to raise revenue. The ECOTEC approach and the banding proposals are principally aimed at taxing the most polluting active ingredients in order to persuade farmers to use other pesticides that were comparatively safer and less heavily taxed, hence cheaper.

  26.  We suggest another object of a tax regime might be to raise a revenue for a particular purpose, say to raise a levy for research and information into less chemically dependent pest control methods. The logic is that generating a revenue to support information dissemination and stimulate research will enable more farmers to reduce their use of pesticides, become less dependent on pesticides, and reduce adverse impacts from a greater range of pesticides.

  27.  As government has withdrawn from the areas of agricultural extension and information provision for farmers, the gap has been filled by private industry—often agrochemical companies. Research and information provision is frequently slanted in favour of pesticide use. There is a shortage of research and information for farmers on non-chemical pest control. For this reason it is our contention it would be helpful to hypothecate the revenue from a pesticide tax to benefit research and information dissemination for farmers.

  28.  A flat-rate tax on the sales of agrochemical products would be the most straightforward way to do this. A tax of five per cent would raise in the region of £25 million; 10 per cent £50 million and pro rata. In order to minimise impacts on competitiveness this should be a pan-European approach. Sales figures are not related to environmental impacts at the level of individual pesticide active ingredients. However a tax on its own is not necessarily the solution, and has to go hand in hand with other economic measures, information provison and impact assessment.

  29.  Increased farming knowledge and skill not only reduces inputs and risk to the environment but also maintains production. Reducing inputs means more than simply minimising pesticide use, or using pesticides according to label directions and following current best practice. There is a strong body of evidence from a number of trials and experiments showing that inputs of pesticides and fertilisers can be reduced by large percentages, whilst maintaining margins, and, because input costs are lower, maintaining or increasing profits.

  30.  Results from projects such as LIFE (Less Intensive Farming for the Environment) and other projects following an Integrated Farming Systems approach over a number of years show that gross margins can increase by 2.3 per cent to 5.8 per cent. Fertiliser costs are reduced by some 40 per cent and pesticide costs from 20 per cent to 80 per cent. Nothing comes without cost: such results at the farm scale require more education and training on the part of farmers, and a greater time spent on crop walking. The results of a number of projects are helpfully summarised in Pretty (1998)[13] including work in the UK, Europe and the United States from the late 1970s onward.

    We argue in favour of a flat rate tax on pesticide sales to generate revenue to support information dissemination and stimulate research. This will enable more farmers to reduce their use of pesticides, become less dependent on pesticides, and reduce adverse impacts from a greater range of pesticides.


  31.  The ECOTEC Report considers that overall two per cent of businesses (280 out of 15,000) might become unprofitable (which means they would go out of farming) as a result of the tax; and for many farmers this would typically reduce net farming incomes by five per cent to 13 per cent. Labour costs might be between 700 and 1,700 full time jobs. However, the Report also points out that labour requirements might be increased under certain cropping regimes.

  32.  There are other opportunities that can reasonably be expected. Organic farming increases labour requirements by some 30 per cent in comparison with conventional farming. According to a recent EU survey[14], environmentally friendly farming methods generate employment, in terms of certification and compliance procedures, technical advice, marketing, and increased labour costs and landscape management practices associated with agri-environment schemes (hedging, terracing, stone wall maintenance, etc).

  33.  In addition to the potential of organic farming, new opportunities will be expected to be created in sectors dealing with the provision of advice and information, and the manufacture and marketing of alternative pest control technologies. It is therefore likely to result in the stimulation of other market opportunities. Already some companies involved in agronomy and the provision of advice are expanding in anticipation of these opportunities[15]. Further up the food chain, there are likely also to be more opportunities for producers who can market assured produce.

    A tax on pesticides, provided it is returned to agriculture and provided it is designed to fit with other economic instruments affecting farm incomes outlined previously, can stimulate employment opportunities and alternative technologies.


  34.  As so many pesticide active ingredients are used and as monitoring is partial, it is difficult to establish what are the environmental impacts of use, and which chemicals might be responsible.

  35.  A number of specific resources are available. The government's Working Party on Pesticide Residues monitors residues on food. The Environment Agency, Drinking Water Inspectorate, and the Working Party on the Incidence of Pesticides in Water report on residues in drinking, fresh, marine, ground and river waters—so far as information is available. Human poisonings are reported to a number of agencies including the Health and Safety Executive and the Pesticide Incidents Appraisal Panel. MAFF and the Pesticides Safety Directorate report on the Campaign Against Illegal Poisoning of Wildlife. MAFF's Pesticide Usage Survey Group reports on aspects of usage. The Advisory Committee on Pesticides, the independent group of experts that advises Ministers, looks at different aspects of use and policy as required. In all sectors, more data is needed on monitoring and assessment of impacts especially in the aquatic environment, soil and biodiversity. In particular all professional users of pesticides should be required to record their use of pesticides, and that this information should be collated centrally by the government.

  36.  Although there are periodic snapshots of particular issues, there is so far no overview of the impacts of pesticide usage produced on a regular basis. This is an issue that the joint MAFF/DETR body The Pesticides Forum may get to grips with shortly but a brief regular status report drawing together the reports of the various agencies and working parties would be helpful.

  37.  The pesticide active ingredients themselves are subject to review by government to ensure their supporting data packages are adequate by current scientific standards—so far about half have been reviewed by PSD under the UK national programme. Superimposed on this is the EU review programme, under which all the active ingredients in use in the Community are shared out among different member states with a view to coordinating an EU harmonised review. Significant environmental data gaps for pesticides in current use must be identified.

  38.  There are other issues that might usefully support the assessment of environmental impacts. The Control of Substances Hazardous to Health Regulations (COSHH) lay duties on operators carrying out operations that involve chemicals that may be hazardous to human health. There is no equivalent duty to consider environmental safety. The parameters of human health are relatively constant, but environmental considerations vary greatly according to the nature of the particular site in question. We would like to suggest that there is a need for a parallel "environmental" equivalent of COSHH which would require the carrying out of an environmental risk assessment when pesticides are used.

  39.  It is also difficult to establish how much of what particular active ingredients are in use, or stocked. Industry supplies aggregated information by weight and value of herbicides sold, insecticides sold, etc. However, it is extraordinary that regulators and those concerned with assessing the impacts of pesticides are denied the knowledge of how much individual active ingredients are in circulation. How much chlorpyrifos or how much atrazine is sold or used each year? There should be a mandatory reporting of sales of active ingredients by industry.

  40.  Finally, it is part of our argument that reducing impacts of pesticides also involves increasing the skills and knowledge and access to information of users. To gain a regular picture of this it would be useful to know the relative numbers of conventional, organic or lower-input farmers; the ratio of independent advisers to farmers; the number of demonstration farms; the frequency of HSE advice inspections; the ratio of certified farmers; the proportion of checked and tested pesticide application equipment (principally spray machinery).

    There is a need for an overview of the impacts of pesticides on the wider environment, drawing together the reports of different working parties and agencies in the light of current concerns. Environmental gaps for pesticides in current use should be identified. We also suggest a mandatory environmental impact assessment at the point of use, and mandatory disclosure of production of pesticides and recording of use.


  41.  Further consultations may be needed as the Chancellor indicated. However we feel that a consultation with a wider sector of industry than the agrochemical sector would be helpful, as pest control depends on more than simply chemical pesticides. Other actors will stand to benefit from a pesticide tax. A tax also has to be seen in the context of other impacts on farm incomes, but we feel that most people, farmers included, would rather see farmers paid for environmentally-friendly farming that does not introduce pesticides into water, rather than pay water companies to attempt to remove pesticides from water at the other end of the chain.

November 1999

10   Annual Review and Handbook 1998. British Agrochemicals Association, Peterborough. Back

11   Design of a Tax or Charge Scheme for Pesticides. Final Report to the Department of the Environment, Transport and the Regions. ECOTEC Research and Consulting Ltd. DETR, London, March 1999. Back

12   Changes in support systems and the effect on arable crop production in the EU. K. Timms in 1999 Brighton Conference-Weeds. Proceedings of the British Crop Protection Council Conference. BCPC, Farnham, Surrey. 1999. Back

13   The Living Land, J Pretty, Earthscan, London 1998. Back

14   Agriculture, Environment, Rural Development Facts and Figures-A Challenge for Agriculture. Available from DGVI of the Commission and on the DGVI website (http://europa.euint/comm/dg06/envir/report/en/index.htm). Back

15   So far, so good for "advice-only" policy. Farmers Weekly 8 October 1999. Back

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