Memorandum from The Pesticides Trust
INTRODUCTION AND
SUMMARY
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.
THE PESTICIDES
TRUST
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.
PESTICIDES AND
THEIR IMPACTS
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.
THE ECONOMIC
AND POLITICAL
CONTEXT OF
PESTICIDE TAXES
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.
THE ECOTEC PROPOSALS
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.
OTHER APPROACHES
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.
ISSUES RAISED
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.
AN ALTERNATIVE
APPROACH
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.
TAXATION AND
EMPLOYMENT
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.
MONITORING ENVIRONMENTAL
IMPACTS
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.
CONCLUSIONS
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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