Select Committee on Environmental Audit Minutes of Evidence

Examination of Witnesses (Questions 20 - 31)



  20. Do you think there will be a problem in formulating some kind of unilateral action here? We have seen the difficulties caused by bans on meat and bone meal which we had to do because of BSE and changing away from stall and tether because of animal welfare concerns, that doing it in this country has damaged the competitiveness of a particular sector of our farmers in relation to Europe and the world. Do you see a potential problem with a pesticides tax doing the same thing if we just do it in this country?
  (Mr Rayment) Our concerns about that have been reduced by the fact that there are several countries in the EU which either have pesticide taxes or are planning to introduce them. So we would not be on our own and UK farmers would not be on their own in terms of facing extra pesticide costs compared to the whole of Europe. We have heard that France, for example, is planning to introduce a pesticide tax; Denmark and Sweden already have one. Though I should be concerned if there were to be an adverse impact on competitiveness, the sums of money we are talking about and the scale of the impact on the farming industry, would not suddenly make UK arable farming uncompetitive.
  (Mr Buffin) Denmark, Sweden, Belgium, Norway have taxes and France's tax is proposed to start on 1 January. So there are several other examples. One of the points is also that some of the problems in farming, and one can look to the intensive nature of agriculture in relation to BSE, have led to some arguments in terms of deintensifying agriculture which would help some of the current problems. It is not entirely so but there is a component in there.


  21. You said it is all very difficult, very complex. You said we do not know the trends. You said we do not know the effects. There appear to be some differences in your views, although you have actually managed to get them together before the Committee. Why should the Government take you seriously?
  (Mr Buffin) You asked us to come together.

  22. I apologise for that and I am very grateful to you both for coming together. It is actually an opportunity for you to reconcile your views.
  (Dr Avery) We are very happy to be here together.

  23. Nonetheless there do seem to be some differences.
  (Dr Avery) Our views are about 90 per cent similar. Why should the Government take any notice of us? The Government does not need to take any notice of us, it needs to take notice of the commitments already signed up to. With declines in biodiversity, those declines are not going to be reversed unless there are changes in farming. This is an example of joined-up thinking.

  24. That does not necessarily demand a tax.
  (Dr Avery) It does not. Other measures could work, but other measures have been tried to some extent. We do see that a tax would give that nudge towards what is already economically sensible behaviour for many farmers. All the other measures, simple economic signals which ought to be working at the moment, are not working. There is still great overuse of pesticides; we think a tax would help. Another reason why Government should take some notice of the RSPB is that we do have one million members, most of whom are voters who are very worried about these issues.

  25. It may be a very good idea to pacify your one million members on behalf of the Government; they certainly need some friends in the countryside. Nevertheless, the fact is that a tax is a very serious thing. It has to be well thought out and quite clearly this has not been well thought out. You do not have any ideas how this would be implemented. You do not know whether it is going to be banded, simple, or, if it is going to be hypothecated, to what extent it is going to be hypothecated. You really have not thought it through. Why would you expect the Government to spend taxpayers' money on thinking it through for you?
  (Dr Avery) We should expect Government to think it through on the advice which it receives. Government is signed up to the polluter-pays principle. This is a tax which would fit very well with that. We have thought it through. The RSPB would support a hypothecated tax where the revenues raised from the tax went back into other measures which would help reduce pesticide use, partly because that is fair to farming, because the money is going back towards farmers and because we see it as a sensible way of solving the problem. The differences in terms of whether you go for a banded tax or simple tax? You could do either. We said that. Either would be better than no tax at all.

  26. The history of other environmental taxes is that you put a tax on and the producer has to pay and then you hypothecate the revenue to some good things but very often the producers have found that the good things are not very forthcoming. They are at the behest of officials who decide who should benefit from them. In effect they are paying more money and there is a very uncertain benefit at the end of the day. Would not some farmers' scepticism be justified? I do know that farmers are nearly always sceptical, probably with good reason but on this particular case excessively so.
  (Dr Avery) We could be sceptical about whether Government will get its act together to grasp the nettle of introducing this tax and put enough thought in it to make it work well. We have no doubt that a well designed pesticides tax could work and it is a good model for a green tax.

  27. You would nonetheless agree, would you, that the devil is in the detail. You use the word "well-designed" all the time but that does beg the question. There is an awful lot of work going into the whole business of "well-designed".
  (Dr Avery) There is.

  28. Probably several years' work.
  (Dr Avery) Certainly a year or two. The fact that other European countries have gone down this route already and have introduced slightly different taxes, does give us an opportunity to look in more detail at what they are doing and see how their experience could feed into the UK. I would still say that having a pesticides tax would be a step forward and we should not be put off by the difficulties of thinking it through. There are always difficulties in thinking things through. It is the detail that matters, but there are many ways the tax could be implemented and could have a good effect environmentally and little harm on farmers' incomes.

Mr Grieve

  29. Presumably other European countries are no further advanced than we are in assessing the impact on biodiversity of pesticide use, because if they were then it would presumably be something which could be translated immediately into the British setup. They are going blind into this in terms of what they are trying to achieve with pesticide taxation.
  (Mr Buffin) What most of these countries have is a pesticide reduction policy and you get into a lot of detailed argument as to what exactly that means when you go into it. We look at a pesticides tax very much as a declaration of intent and an overall message that you are going to reduce pesticide use. When you get down to the actual detail of analysing whether you are succeeding or not, it comes back to the difficulty of analysing the effects of pesticides which will always be there. Whether you have a very firm declaration of intent to reduce pesticide use or not, because we do not understand a lot of the subtleties of those chemicals sent into the environment, there is a political decision to pull back and that is the headline and then the detail is always going to be difficult to assess, whether you are looking at it in terms of a tax or whether you are just looking at the impact of pesticides per se.
  (Dr Avery) The lesson from other European countries is that even though they probably have less good information on the effects of pesticides on biodiversity, they have become convinced that over the whole range of pesticide impacts there is a reason for introducing a tax and they are a long way ahead of us in that they have either introduced a tax or in the case of France one is proposed to be introduced in just over a month's time. We are a year or two away from that being possible in the UK, but we ought to use that year or two to get on with that thinking, work out the details and introduce a well designed tax, which is the only type we would want.

Mr Blizzard

  30. Obviously this question of elasticity of a price of something is crucial here. I have seen in East Anglia, where I come from, that the fuel duty escalator, for example, did not result in any real decrease in the use of petrol because there was no alternative for people in rural areas so they just paid more for their petrol. Coming back to this proposed pesticides tax, is it not likely that the farmers would simply have to pay more? You said there was an alternative, but if the economics of that alternative were so advantageous then I cannot understand why hardly any farmers, if any, have moved down that route. Secondly, the Government has a policy which is making headway in Europe that reform of the Common Agricultural Policy away from subsidising production, which makes demands on more intensive farming, and switching the money into agri-environmental measures, if we can pursue that broad policy without getting into the details of this pesticides tax, is likely then to produce what we are looking for: a reduction in pesticides if we have less intensive agriculture because it is not fuelled by production subsidy.
  (Mr Rayment) On the first point of elasticity, most of the studies into the elasticity of demand for pesticides indicate that a 10 per cent increase in price would result in a three to five per cent reduction in use. Demand is relatively inelastic but there is some response caused by price changes. If we also consider some of the initiatives which can actually take place to increase that response, such as provision of advice for example to help farmers realise cost savings, then we can actually achieve significant reductions. On CAP reform, the direction of CAP reform, although for us it is too slow, will have some benefit for the environment in terms of reducing price supports and potentially therefore leading to a reduction in pesticide use, although it is very unpredictable and that depends a lot on future fluctuations in world markets. We could have a situation, as we had in 1995-96, where grain prices were at very high levels and incentives to use more pesticides were actually increased. You cannot rely on the crop market to achieve the right level of pesticide use and although CAP reform is a welcome thing, we need more targeted measures as well.

Mr Jones

  31. May I crave your indulgence and try to provoke the witnesses with a fairly fundamental question? Your objective is to try to sustain the biodiversity we currently have and try to restore some of the biodiversity we have lost. The thrust of this argument and other arguments which are made is that the best way to do this is to reduce the intensity with which farmers manage their land. Could it not be at least as well argued that perhaps the best way to improve biodiversity is to allow farmers to continue to intensify, given that there is a particular level of demand, whatever the demand is from time to time for food they produce? The more intensive some farmers are, the more land is then freed from farming altogether. I know that the farmers' lobby look even more worried by what I am saying than by what you are saying, but in terms of the environment, we could possibly gain far more for the environment overall by allowing more intensive farming in some areas than by preserving uneconomic farming across virtually all land at a less intensive level.
  (Dr Avery) It is an interesting idea. I hope you are going to ask the NFU their view on this as well a bit later. Most of the UK is farmed at the moment and biodiversity lives on farmland, in fact biodiversity needs farming. We often say this to the NFU and others. The difficulty we have is the intensification of farming which is removing biodiversity in almost all habitats in the UK at the moment and there are no wildernesses in which wildlife can survive. The future of wildlife depends on the future of farming. I would be prepared to go as far as that. However, we need the right type of farming to allow productive farming for farmers and productive farming for biodiversity to coincide.
  (Mr Buffin) If you are increasing intensity in certain areas it is not going to stop a potential increase in pollution and other potential adverse effects which may occur.

  Chairman: I am afraid we have overshot our time. That was a very interesting session with a very interesting end question. Thank you very much indeed for coming along.

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