Without a tax, nutrients worth 25% of the CAP budget are lost to water and air every year

Without a tax, nutrients worth 25% of the CAP budget are lost to water and air every year

It’s startling to think that fertilizer worth 25% of the CAP budget is lost to water and air, bringing with it a wide array of environmental problems, perhaps the most visible of which is eutrophication – which typically leads to a slimy green coating of algae which compromises far too many of our lakes and rivers.

However, an EU-wide tax on artificial fertilizer would reduce these losses, first by boosting the value of natural manures / slurry for on-farm use, and second, by entrusting natural manures and slurry with a price, making them more worthwhile to sell to other farms and to bio-digestion plants.

But first, back to the finding that lost nutrients equate to 25% of the CAP budget. It comes courtesy of work by Professor Mark Sutton and his colleagues at the Centre for Ecology & Hydrology, based in Edinburgh, and part of the UK’s Natural Environment Research Council.

In a piece in co-authored in The Lancet: Respiratory Medicine in 2015 [1], Professor Sutton drew on the data outlined in the 2011 European Nitrogen Assessment [2], and pointed to the business case to reduce fertilizer losses.

Based on a fertiliser price of €0.80/kg nitrogen, losses attributable to agriculture (artificial and natural nutrients) sum to around 18 million tonnes a year, giving an annual figure of €14.4 billion. With annual CAP payments running to around €57 billion annually, this loss is equivalent to 25% of the EU’s agriculture budget.

The next question is what to do about it. From 1984 until 2009 Sweden levied a fertilizer tax. The measure was abolished during the financial crisis due to pressure from farmers who pointed to competition from farmers in EU countries not subject to such a tax.

But the case for a tax was – and remains – overwhelming. A 2014 study by Sweden’s National Institute of Economic Research pointed out that re-introducing the tax at its previous level (equivalent to €0.18 per kilogram of nitrogen) would stop 10,042 tonnes of nitrogen leaching into surface waters, delivering a 6% cut in total leaching [3]. The finding was backed up by a similar study undertaken at Lund University a year later.

With CAP reform moving up the agenda, and a growing appreciation of the need to farm in harmony with nature, perhaps it’s time to look at an EU-wide tax on artificial fertilizer?

If the revenue raised was re-invested in measures that enhance nutrient take-up and management on Europe’s farms, we could be looking at a win-win for agriculture and the environment.

References

1. http://www.thelancet.com/journals/lanres/article/PIIS2213-2600(15)00413-0/abstract

2. http://www.nine-esf.org/ENA

3. http://www.konj.se/download/18.42684e214e71a39d0722ed0/1436516834703/Milj%C3%B6+ekonomi+och+politik+2014.pdf

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