UNEP: Government must tax chemical fertilisers and pesticides

United Nations Environment Programme has told the government to help farmers use organic fertilisers and biological pest control instead of synthetic fertiliser and chemical pesticides. The government charges no tax on imported chemical fertilisers and chemical pesticides. Also, these agricultural inputs are sold without 16 percent valued added tax (VAT).

UNEP said chemical fertilisers and pesticides are harmful to nature and human health.

The UN agency said the misuse or overuse of chemical fertilisers and pesticides leads to pollution and worsening of soil health.

“Often with significant negative impacts for nature and human health,” said Joy Kim, UNEP’s green fiscal policy leader.

The government charges no tax on imported chemical fertilisers and pesticides. In addition, it doesn’t charge 16 percent value added tax (VAT) on chemical fertilisers and pesticides.

UNEP says the government is encouraging farmers to use chemical fertilisers and pesticides by not charging them taxes.

UNEP advises the government to tax chemical fertilisers and pesticides and use the money to help farmers use organic fertilisers and biological pest control.

Ms Kim said UNEP wasn’t urging farmers to stop using all chemical fertilisers and insecticides.

“But instead to transition towards organic fertilisers and biological pest control, which are better for soil health, nature and human health,” she said.

Kenya imported 758.5 million kilogrammes of chemical fertilisers in 2021, the government’s Economic Survey for 2022 shows. During the same year, the country imported 19 million kilogrammes of insecticides and fungicides.

Chemical fertiliser VAT-exempted, pesticides zero rated

Fertilisers are exempt from VAT. Agricultural pest control products and all inputs and raw materials manufacturers use to make agricultural pest control products are zero-rated.

Mr Nicholas Kathiari, a partner at accounting firm Fekan Howell, explained that if a good is VAT exempt it means VAT has no effect on that good. Also, a manufacturer of a VAT exempted good, such as chemical fertiliser, cannot claim from Kenya Revenue Authority any VAT they paid on their inputs, he said.

Mr Kathiari said zero-rated means the good is charged 0 percent VAT. It also means a manufacturer of a zero-rated good, such as pesticides, can claim from Kenya Revenue Authority VAT they paid for their inputs, he said.

‘Farmers should only use registered products’

Dr Esther Kimani, chief executive officer, Pest Control Products Board, said the government removed taxes on pesticides to make them affordable to farmers. She said pesticides are hazardous, harmful to humans, environment, and animals.

“That’s why their [pesticides] access and use is regulated,” Dr Kimani told Water Tower. “Farmers should only use registered products and as per the label.”

The government started Pest Control Products Board in 1985. She said the board was started because although pesticides help agricultural production, they could be harmful to human life and environment. The board controls importation, exportation, distribution, safe disposal and use of pest control products.

READ: Pesticides: ‘Kenyans need to use protective clothing’

Moving to more natural, equitable and efficient agriculture

Food and Agriculture Organisation (FAO), United Nations Development Programme and UNEP say that majority of governments’ support to agriculture had negative effect.

The governments’ agricultural support includes low or no import tax and other financial assistance, they say in a report released in September 2021.

The UN agencies say that the governments’ financial assistance for chemical fertiliser and pesticides are inefficient, distorts food prices, hurts people’s health, and degrades the environment. In addition, the financial help favours big agricultural firms against smallholder farmers, they said.

Governments must remove their financial support for “toxic pesticides and fertilisers,” they say. So, the governments must shift their financial support to more natural, equitable and efficient agricultural support, they say.

The report gives examples of countries that have started moving to more natural, equitable and efficient agricultural support.

1. Indian state of Andhra Pradesh started moving six million farmers cultivating eight million hectares from conventional synthetic chemical agriculture to natural farming.
2. In 2006 Chine started agricultural reform that supported decreased use of mineral fertilisers and chemical pesticides.
3. The United Kingdom removed Single Payment Scheme subsidies to farmers in agreement with the National Farmers’ Union.

Dr Kimani said Pest Control Products Board continues to encourage agrochemical firms to register biological pest control products. She said the board has written rules on how to register biological pesticides.

“The board has assessed, evaluated, and recommended for registration many biological pest control products,” Dr Kimani said. “The board through awareness creation encourages farmers to use biological pest control products.”