Select Committee on Environmental Audit Minutes of Evidence


Annex 1

Report to the British Agrochemicals Association on Pesticide Tax Proposals by Professor Gareth Edwards-Jones

SUMMARY

  1.  This review was undertaken in response to a request by the British Agrochemical Association (BAA) to comment on Department of Environment, Transport and the Regions (DETR) proposals to introduce a tax on pesticides in the UK. The BAA requested that the review should focus on the banding schemes proposed for taxing pesticides and to comment on their scientific validity and likely impact on pesticide use in the UK.

  2.  Part A of the DETR report, which sought to lay out the rationale for a tax, was poorly researched and written. The rationale was over dependent on a few references, and made no attempt to differentiate between information derived from different countries. The types of crops, and methods for growing them differ between countries. For these reasons it is not appropriate to assume that data from countries like the USA, on issues such as pesticide residues in food, are relevant to the UK. Further the general coverage of Part A was rather biased towards the disadvantages of pesticide usage and did not present any information relating to the benefits of pesticide usage.

  3.  Both of the methods presented for banding the pesticides had inherent problems:

    —  The modified Kovach method is dependant on the availability of good data, and the arithmetic of handling these data are problematical. However, these issues are less important than that of deciding which impacts should be included in the index and their relative weightings.

    —  The label based approach depends upon "risk phrases" which are allocated during the registration process. These were then converted to a numerical score by experts. However, it is unclear how these risk phrases are developed, and it is not stated what the numerical scores represent.

  4.  It is also important to note that the label based approach is implicity dominated by operator safety, which as the report stated in Part A is not an important issue in the UK. Conversely consumer safety, which was emphasised in Part A as being important, has little influence in this method.

  5.  None of the proposed banding mechanisms can overcome initial differentials in prices and hazard between pesticides. This failure to develop a mechanism which gives clear signals and incentives to farmers to switch to less hazardous products is a major flaw in the proposals.

  6.  This issue is perhaps related to apparent confusion in the aims of the banding mechanism. The stated objective of tax was "to achieve substitution either by less harmful pesticides or by alternative techniques such as the reintroduction of natural predators." However, by the middle of the report it is stated that "banded instruments have the potential to cause switching to more benign pesticides. However, this is not the principal aim of the banding system. Its main function is to prevent switching in the opposite direction. That is to say it is a defensive mechanism." A clear, unequivocal statement of the intended purpose of the banding system would be useful.

  7.  Insufficient discussion is given to the existence of real alternatives for many pesticides. In practice label restrictions and differences in relative efficacy severely restricts the choice of alternative products. Even when alternatives do exist there is no guarantee that they would be in a lower hazard band than the original choice.

  8.  No mention is made of encouraging non-pesticide based pest management strategies, despite the importance of these being clearly stated in the objectives of the work.

  9.  The report makes no comment on taxing crop protection inputs to organic systems. This appears illogical as it is beyond doubt that crop protection inputs to organic systems do pose an environmental hazard. For this reason there is no logical reason for their exclusion from the tax regime.

  10.  Given these weaknesses, it remains unclear whether or not the proposed banding system would deliver significant environmental benefits in terms of product switching. Before any such benefits can be assumed several important scientific questions need to be answered about the structure of the two banding mechanisms, farmer comprehension and behaviour.

  11.  It is doubtful whether many farmers, and other users of pesticides, will clearly understand the basis of the tax system, and therefore they will be limited in their ability to respond to the proposals. Even if the signals to pesticide users were clear, the lack of real alternatives of a lower hazard banding will severely limit any environmental benefits which will accrue from the introduction of the tax.

  12.  It is also doubtful whether consumers would receive any major health benefits as a result of the tax being introduced. This is for two reasons. Firstly many consumers eat significant amounts of food products which are not derived from within the UK, and the introduction of a pesticide tax in the UK will have no impact on pesticide residue levels in these food stuffs. Second, neither of the two methods presented for banding pesticides included significant data on consumer health.

  13.  Whilst the economic rationale for internalising externalities is correct, and the need to keep pesticide use to a minimum is supported, it remains debatable whether or not a tax based on the hazard banding proposals presented will bring significant health or environmental benefits to the UK.

June 1999


 
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