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
| 
