| 24 June 1999 David Kemp Esq
Tax Policy Team
HM Treasury
Parliament Street
London
SW1P 3AG
Dear Mr Kemp
'Options for reducing the environmental impact of pesticide use'
- extension to Veterinary Medicines
NOAH represents the manufacturers of animal medicines in the UK. Our members supply approximately 90% (by value) of all the
licensed animal medicines sold in the UK, including an even higher proportion of the
products used on-farms.
NOAH fully supports the aim of reducing the environmental impact of
Veterinary Medicines. To this end we have been very pleased to work with MAFF and DETR, VMD and EA
as well as other representative organisations over the years, not least through groups
such as 'Pesticides in the Environment' and TAPS - both chaired by the Environment Agency. This
aim is furthermore supported by all individual animal medicine companies, who have
introduced their own measures and customer advice.
Although we have been aware for many months that a pesticide tax was
under consideration, and we did write in general response to the 'Economic
Instrument' consultation on 5 February 1998, we have only recently been alerted to the
suggestion, in DETR's consultation
paper of 24 March that the proposed 'Pesticide tax' should be extended to include
certain veterinary medicines. Thus we have been unable to give the ECOTEC findings such a
detailed study as they deserve. We do, however, note that in Section B2.3 they reject the
application of the tax to veterinary medicines, and so we were surprised to see the
subject re-opened by DETR.
We remain of the opinion that any form of Pesticide Tax would be
impractical and counter productive:-
- The Licensing system already includes environmental
safety.
- The Groundwater
regulation needs time to prove its worth, while its cost should also be considered an
existing 'Tax'.
- International competitiveness would be damaged and illegal
imports encouraged.
- Education, and enforcement of existing rules, needs attention, aided by better
interdepartmental co-operation.
- Companies which invest in environmentally friendly projects should be encouraged and
rewarded.
- The key purpose of animal medicines - to protect and treat animals and so enhance animal
welfare - must be understood - a Welfare tax is not the answer.
In response to the specific questions raised in DETR's paper and with particular
reference to veterinary medicine:-
a. Does it meet the principle of a good environmental tax?
No.
As indicated below we believe it would not meet the objective of
reducing environmental pollution, while there would be undesirable side effects and damage
to international competition.
The 'distributional impact' would be seriously unbalanced, as it would
affect all users of the targeted products - whether or not they were guilty of causing
pollution - this is manifestly unfair.
The poor state of UK livestock farming is already well publicised. An
additional tax which did not apply to the overseas competitors of UK farming would only
add to the problem and make it even more difficult for UK to compete - not just in
international markets, but in our home market against imported produce.
Furthermore, although a few EU countries already impose a
"Pesticides tax" - none apply it to Veterinary Medicines.
b. Factors to reduce environmental impact:
The principle potential environmental impact of livestock
products is to water quality via disposal of equipment washings, waste dip etc.. In
reality the number of incidents is very small when compared to the number of farmers
involved (90,000 sheep farmers, for example). The Groundwater
Regulation, introduced earlier this year, is designed to further reduce this small
number of incidents, time is needed to assess the effectiveness of this regulation
before further measures are introduced. The Groundwater
Regulation itself imposes high fees on farmers - a tax by another name.
The two real keys to reducing pollution are:
i. Education - the Certificate of
Competence for Sheep Dips requires sheep farmers to be trained and examined before
they may purchase sheep dip - training includes environmental awareness and safe disposal.
Animal medicines may only be sold by trained and qualified vets and
other distributors.
ii. Prosperity - Farmers are at present unable to invest in better
animal handling or waste disposal systems. A tax on animal medicines would only add to the
problem by siphoning-off money which could be spent on environmental improvements.
The need to treat will remain, so there can be no reduction in usage
without a welfare impact.
Furthermore, a tax on the purchase price of the product provides
no incentive to farmers to behave properly or to invest in disposal systems etc.
c. Coverage of tax
A clear, science based definition is needed. The term 'pesticide' is a functional
not chemical description. It has no bearing on the environmental impact of a
substance.
d. Should it apply to veterinary medicines?
i. In EU law veterinary medicines are, by definition not
'pesticides' - they are applied to the animal and only enter the environment indirectly.
ii. Under EU and UK law veterinary medicines are licensed as being
safe, when used as directed to the animal patient, the user, the consumer and
the environment - an environmental impact study is a mandatory part of the licensing
process.
The key scientific advisory committee on animal medicines - the
Veterinary Products Committee, has included environmental experts for many years,
furthermore DETR staff sit as
observers/advisors at VPC meetings
Thus to impose a tax on veterinary medicines implies:
iii. Veterinary medicines, particularly those likely to be targeted as
'pesticides' are used solely for the positive purpose of animal welfare -
for example to protect and treat animals afflicted by external parasites. The terrible
financial state of livestock farming does not permit needless use - indeed there are
already concerns that animal welfare is suffering through farmers' financial difficulties.
Under such circumstances a Pesticide Tax would simply become a Tax on Animal Welfare.
You also ask if the tax should be applied to 'pesticides used for non
agricultural purposes'; while you do not mention pet medicines or human
medicines you will be aware that a number of 'pesticide' ingredients are used to treat
external pet animal and human parasites. We are unaware of any allegations of
environmental damage associated with such uses and as stated above, pet medicines also
have to undergo an environmental impact
assessment before being granted a licence.
e. Imports
It is currently illegal to import an animal medicine for sale in the UK
without a parallel import
licence linked to an existing UK Marketing Authorisation.
However the strength of the Pound, coupled with financial
difficulties described above have resulted in a small but high profile illegal trade.
Anything which exacerbated the cost difference between UK and elsewhere would only act as
a further incentive. A Pesticide Tax would encourage illegal imports.
f.
No comment in view of our total opposition.
g. Reflecting "Hazard" or "Harm"
As above, other than to point out that a tax intended to assist the
environment could only, logically, be linked to the environmental impact of the individual
product, (not the active ingredient or weight or value etc.) - this would seem an
administrative, legal and scientific minefield.
h/i. Adverse implications - Banding
As implied in 'g' - Environmental impact relates to the product
- its formulation, use etc. To link a tax solely to an active ingredient would be
both naive and grossly unfair to those companies endeavouring to reduce the environmental
impact of their products.
For example, most Sheep Dip companies have recently developed systems to neutralise the spent dip-wash prior to
disposal - this work has been done voluntarily and at their own expense. A tax on active
ingredient would give no credit for this, nor any encouragement to farmers to use the
neutralising systems now available.
j & k.
No - see our comments under 'g, h, i'.
l. Farmers ability to change?
Although there are alternatives for most veterinary medicines, there is
seldom a simple or straight forward option - products may be active against different
parasites, not be suitable for use on certain farms, or introduce hazards of their own.
For example a popular alternative to sheep dips to treat scab - the
injectable "endectocides" have a different range of activity and are currently
and controversially banned by the National Trust for environmental reasons (but they are not
'pesticides').
m, n , o
See above
q. Alternative possibilities
Although outside NOAH's specific remit, we do question 'the governments
policy for pesticide minimisation'.
This sounds too much like prejudice to be the basis of intelligent
Government Policy.
- Both animal medicines and agrochemicals are licensed by Government as safe when used as
directed.
- The current financial state of farming precludes any unnecessary expenditure on farm
inputs.
- Each 'pesticide' product is different and should be assessed on its individual
properties.
We do, however support all the points suggested as alternative ways of
encouraging responsible, informed, use.
r&s. Views on other options
In addition to the Groundwater
regulation and Certificate of Competence already mentioned, may we draw your
attention to the 'RUMA Alliance' (Responsible use of
medicines in agriculture) which brings together representative organisations of farmers,
veterinarians, medicine manufacturers, the supply trade, retailers and consumers. The aim
is to foster best practice and to minimise the need for medicines by
producing and promoting guidelines on responsible use. While not specific to environmental
issues, these will be included where relevant.
The project builds on the Code of
Practice for the Responsible Use of Medicines in Agriculture, produced by VMD and launched by the Rt. Hon Nick
Brown MP on 26 April with the endorsement of 22 organisations.
Furthermore, at a time when 'joined-up Government' is the aim, we
believe that there is considerable scope for liaison and co-operation between relevant
bodies - MAFF, DETR, EA, HSE
and VMD etc. to ensure that clear and
consistent messages reach the farming community from the whole of Government - A pesticide
tax implies a lack of co-ordination.
To summarise
While accepting that there will always be scope for further reducing
the environmental impact of veterinary medicines, we do not believe that a tax based on a
naive prejudice against 'Pesticides' is the answer.
- The Licensing system already includes environmental
safety.
- The Groundwater
regulation needs time to prove its worth, while its cost should also be considered an
existing 'Tax'.
- International competitiveness would be damaged and illegal imports encouraged.
- Education, and enforcement of existing rules, needs attention, aided by better
interdepartmental co-operation.
- Companies which invest in environmentally friendly projects should be encouraged and
rewarded.
- The key purpose of animal medicines - to protect and treat animals and so enhance animal
welfare - must be understood - a Welfare tax is not the answer.
We would be very pleased to elaborate on any of the above points should
you find it helpful.
Yours sincerely
Roger R Cook (Mr)
DIRECTOR
c.c. Rt Hon Nick Brown MP
Mr Jeff Rooker MP
Mr Peter Luff MP - Chairman Select Committee on Agriculture
Mr Tim Yeo MP - Shadow Minister of Agriculture
Mr Charles Kennedy MP - Agricultural Spokesman - Liberal Democrats
Mr Richard Carden - MAFF
Dr J M Rutter - VMD
Prof. Ian Aitken - Chairman VPC
Prof. D H Lawson - Chairman Medicines Commission
Dr Ann Buckenham - Director, British
Agrochemicals Association
Dr Roger Dawson - Director, Animal
Health Distributors Association
Mr Jim Baird - Chief Executive - British
Veterinary Association
Mr John Thorley - National Sheep Association |
