Bjerregaard examines levies to control Union’s use of pesticides

Date: 23/07/1998

By Chris Johnstone

ENVIRONMENT Commissioner Ritt Bjerregaard has ordered her officials to study the possibility of introducing a pan-EU tax on pesticides in an effort to stem a rising tide of national levies.

The controversial move comes as an increasing number of governments are considering whether to impose their own charges in response to flagging EU-level efforts to cut the use of pesticides.

Bjerregaard was prompted to act by fears that national pesticides taxes could fragment the single market, although she is said to be facing fierce resistance to the idea from the Directorate-General for agriculture (DGVI).

Denmark already levies a tax of 36% on the sale price of insecticides and 17% on herbicides, and the Dutch authorities are drawing up equivalent proposals. The British government recently launched industry-wide consultation on a potential pesticides tax, causing howls of protest from chemical companies and farmers. Suggested levels for the UK tax have varied from 25% to 130%.

The Commissioner's decision to look into the issue follows the failure of a meeting of national experts in May to agree on whether to harmonise value added taxes or impose direct levies on pesticide use.

Commission interest in the idea of a pesticides tax is taken seriously by producers. "I think this is a runner. The Commission is seriously looking into what is possible," said a spokesman for the British Agro-Chemical Association (BACA), representing major European manufacturers such as Zeneca, which obtains annual revenue of 3 billion ecu from the sale of pesticides.

Industry observers believe Bjerregaard may use the study to push through a controversial proposal against the might of DGVI. "Environment officials badly want some sort of legislation even if the case has not been proven," said an industry lawyer.

"We have already seen proposals like this for fertilisers which never came to anything," said a Commission farm policy official. "These sort of taxes just handicap European producers."

Officials say that while Nordic countries would line up in favour of a tax, France and other large agricultural exporters would probably resist a move which would hit their international competitiveness.

MEPs have welcomed the proposal. "This is vital if we are going to have sustainable development," said Danish Liberal MEP Lone Dybkjær, vice-chair of the Parliament's environment committee. "Danish experience of using environmental taxes is that they tend to change attitudes and behaviour. This is good news."

The European Crop Protection Association, which represents pesticide producers, said it could live with a low tax, but a levy nearing 100% of the cost price would cut pesticides sales by between 30% and 40%.

Big-name pesticide producers such as Novartis, Monsanto, Bayer and DuPont question whether a tax would live up to its promise of encouraging farmers to cut their use of chemicals and thereby bringing environmental benefits.

Superficially, any such Union measure would be tackling a problem which is already receding. The volume of pesticide use in the EU fell by 30% in the ten years to 1995, according to the European Environment Bureau, although it adds that these figures hide the fact that the potency of pesticides has increased over the same period.

The agency's recently released assessment of Europe's environment revealed a picture of declining numbers and varieties of plants and animals in western Europe, where pesticides and intensive farming go hand in hand, compared with central and eastern Europe where they are used much more sparingly.

The World-Wide Fund for Nature (WWF) believes existing Danish and Swedish taxes have been set too low to have dramatic effects.