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 , Professor Sutton drew on the data outlined in the 2011 European Nitrogen Assessment , 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 . 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.