Denmark: Load index now guides pesticide tax

With effect from 1 July 2013 a new pesticide strategy has been implemented in Denmark, writes Janne Hansen. The aim is to reduce the use of pesticides, particularly those that have a high impact on the environment and human health.

The most important change is the amended tax on pesticides. The tax will increase the cost of pesticides having a high potential impact on health and the environment. The intention is to motivate farmers and other pesticide users to reduce their use and the load of potentially harmful pesticides.
The pesticide strategy will continue where Denmark’s Green Growth programme left off and many of the activities that were originally planned as part of Green Growth continue.

The most important change ensuing from the new pesticide strategy is that the Treatment Frequency Index will be replaced by a Pesticide Load Indicator. This means that pesticides will be taxed according to their load indicator instead of a value added tax regardless of load.

Pesticide Load Indicator

The Pesticide Load Indicator aims to measure the potential impact on human health, environmental behaviour and environmental toxicity. The human health indicator provides a measure of the load to which the operator is exposed when handling and applying pesticides and takes into account danger symbols on the package and so-called risk phrases on the label (for example, 'potentially carcinogenic').

Environmental behaviour expresses how fast the pesticides degrade in the soil, the risk of accumulation in the food chain and the risk of leaching to groundwater. Finally, environmental toxicity provides a measure of the pesticide’s toxicity for animals and plants in the field (for example, earthworms and bees) and the surrounding nature (for example, fish and birds).

It is worth noting that these loads represent the innate properties of the active ingredients and do not take into account risk mitigation measures taken by farmers. Consequently, the pesticide load indicator represents potential impact rather than real effects.

According to crop adviser Jens Erik Jensen, from the Knowledge Centre for Agriculture, the new pesticide strategy will have far-reaching consequences for farmers and advisers.

“On the one hand the new pesticide plan visualizes the potential impact of pesticides on health and the environment much more clearly: the more risky the pesticide, the more expensive it is to use. That makes things easy to understand and will no doubt affect farmers’ and advisers’ plant protection strategies,” says Jens Erik.

“On the other hand, some pesticides will become prohibitively expensive. This may create de facto monopolies for some products, but more importantly this can give rise to problems with pesticide resistance in the long run. For years farmers have asked for a more fair tax but many farmers and advisers think the new tax has become too progressive.”

Higher taxes

Practically speaking, each pesticide has a base tax which is determined by the amount of active ingredient in the pesticide. Added to the base price are the three Pesticide Load Indicator taxes. This gives the total tax per unit (for example, litre, kilogram or tablet).

Table 1. Examples of 'old' and expected new prices for some widely used pesticides in Denmark. Source: Knowledge Centre for Agriculture, Denmark

Product name and active ingredient	Old price including old value added tax	Old price excluding tax	Expected new price with new tax
Ally ST (metsulfuron-methyl, 200g/kg)	3.90 DKK/g	2.92 DKK/g	3.01 DKK/g
Boxer (prosulfocarb, 800g/L)	85.00 DKK/L	63.75 DKK/L	173.75 DKK/L
Rubric (epoxiconazole, 125g/L)	353.00 DKK/L	264.75 DKK/L	484.75 DKK/L
Cyperb 100 (cypermethrin, 100g/L)	170.00 DKK/L	110.50 DKK/L	1,687.50 DKK/L
Cycocel 750 (chlormequat-chloride, 750g/L)	23.00 DKK/L	17.25 DKK/L	97.25 DKK/L

Taking the example of the sulfonylurea herbicide Ally (metsulfuron-methyl), it is only necessary to use 5-10g/ha, so the tax per hectare is virtually nothing. Previously, the tax was 33 per cent of the sale price, which made the product more expensive than now.

Boxer (prosulfocarb) is the dominant herbicide for controlling weeds in winter cereals in the autumn and a key herbicide in resistance prevention. The new pesticide load tax means the total price is now almost 100 DKK more per litre than before. Since farmers use 1-2l/ha the cost of using Boxer to control weeds in winter crops will increase dramatically.

"One fear is that the new price structure can lead to increased pesticide resistance. Boxer is a key product because it has an alternative and effective mode of action. Cheaper options all tend to belong to the same chemical group, which increases the risk of resistance. This is worrying as we are getting very few new products, if any, on the market over the next few years,” says Jens Erik.

Cyperb is a pyrethroid insecticide with a high environmental load. With the new tax, the total tax rockets up to 1,577 DKK/l. With a typical dosage of 0.2 l/ha against, for example, aphids in July, the hectare cost used to be 34 DKK/ha. The new hectare price is a whopping 338 DKK/ha.

"Insecticides like Cyperb belonging to the pyrethroid group can kill beneficial insects and, in surface water, daphnia. That is why the new tax is high - and rightly so. However, the high cost will create a monopoly for the cheapest pyrethroid, which will probably lead to a price increase. In addition, for many of the pests in question, pyrethroids are the only option allowed in Denmark,” says Jens Erik.

The challenge for advisers will be to advise farmers to use more environmentally friendly but effective products properly so that pesticide usage and load decreases. In this respect, the new tax set-up visualizes the environmental effect very well and can assist advisers in their efforts to argue for more intelligent plant protection.