Q&A
Question & Answer
1. Why tax meat with a 'true price, including external costs of pollution and health'? For the consumer, the only real substitute for one type of meat is simply another type of meat, no?
2. Is TAPP not too short-sighted? The TAPP arguments used in the Farm-to-Fork debate, namely, to use quick fixing ‘silver bullet’ instruments to make the livestock sector more sustainable, and to help consumers to eat more sustainable and healthier doesn’t consider the EU agriculture sector.
3. How can the TAPP proposal be a game-changer towards the EU ambition in the Farm to Fork Strategy of reserving 25% of agricultural land for organic farmers?
4. Why use taxes as an instrument to influence consumer (products)? Tax has never had a good track record in terms of efficiency, no?
5. Does TAPP has evidence that tax is an efficient instrument to facilitate their transition?
6. Does a higher meat price negatively impact low income groups?
7. How can TAPP help the diverse and varied agriculture sector consisting not only of ‘factory farms’ but also small farmers at the countryside with marginal lands?
8. Will a tax on meat lead to a rural exodus if more farmers will stop?
9. Will a tax on meat export problems to third countries?
10. How can we avoid using cheaper meat products from abroad to compensate for the costs of tax?
11. Can a meat tax be applied at EU level without going against the spirit of treaties? Taxation powers rest with the national authority, no?
12. Does the TAPP proposal respect the EU Common Agriculture Policy aimed at assuring the availability of foodstuff supplies and assuring that foodstuffs reach consumers at reasonable prices?
13. How can the new TAPP coalition withstand the political and marketing agenda of the established agricultural sector?
14. Do we need any kind of feasibility study to analyze the effects of the TAPP proposal?
15. What is at the heart of the TAPP proposal that traditional/industrial livestock is lacking?
16. What is the anwser of Tapp Coalition to an opinion article 20th May 2020 from Copa Cogeca (EU farmers association) to the TAPP Coalition proposal for a fair price on meat at EU level?
17. Will organic or 'slow/quality' meat also be taxed in the same way as industrial meat production?
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Q1: Why does the TAPP coalition believe in rebalancing the price of animal proteins? For the consumer, the only real substitute for one type of meat is simply another type of meat, no?
A: Many people in the EU eat too much compared to healthy diets recommendations and an alternative is simply to eat less food including less meat. In many EU countries, meat consumption per capita is declining and millions of consumers find other alternatives, including vegetables with high protein contents (eg. beans, lentils), nuts, mushrooms and plant based or other meat alternatives. Consultants of A.T. Kearney stated (2019) that the market share of conventional meat will be reduced to 40% by 2040. Food corporations like Unilever started to purchase vegetarian brands such as ‘Vegetarian Butcher’ (Vegetarische Slager, 2019). Apparently, for the consumer, the future looks brighter and healthier than simply ‘another type of meat’. The EU Commission mentioned in the Farm to Fork Strategy that meat consumption levels are too high compared to dietary health guidelines: “Current food consumptionpatterns are unsustainable from both health and environmental points of view. While in the EU, average intakes of energy, red meat, sugars, salt and fats continue to exceed recommendations, consumption of whole-grain cereals, fruit and vegetables, legumes and nuts is insufficient. Reversing the rise in overweight and obesity rates across the EU by 2030 is critical. Moving to a more plant-based diet with less red and processed meat and with more fruits and vegetables will reduce not only risks of life threatening diseases, but also the environmental impact of the food system. It is estimated that in the EU in 2017 over 950,000 deaths (one out of five) and over 16 million lost healthy life years were attributable to unhealthy diets, mainly cardiovascular diseases and cancers. The EU’s ‘beating cancer’ plan includes the promotion of healthy diets as part of the actions for cancer prevention”. More info: p. 14 https://ec.europa.eu/food/sites/food/files/safety/docs/f2f_action-plan_2020_strategy-info_en.pdf
Q2: Is TAPP not too short-sighted? The TAPP arguments used in the Farm-to-Fork debate, namely, to use quick fixing ‘silver bullet’ instruments to make the livestock sector more sustainable, and to help consumers to eat more sustainable and healthier doesn’t consider the EU agriculture sector.
A: No, the TAPP Coalition proposal is very sophisticated and is embraced by many scientists, stakeholders and the Dutch Ministries of Agriculture and Finance, who promoted the TAPP Coalition proposal for a true meat price tax (excise duty) in a letter from the Dutch Finance Minister Hoekstra to the Dutch Parliament 22nd of April 2020, to inspired political parties in their election campaign. The meat tax proposal is seen as a practical and realistic way to address future challenges with reducing GHG-emissions from food, reducing health care costs and improving health and biodiversity challenges. The Dutch government letter also mentioned the use of meat tax revenues to be used for payments to farmers, reducing the consumer prices for vegetables and fruits and compensate low income groups. More info: https://tappcoalition.eu/nieuws/13817/dutch-government-proposal-for--true-pricing--meat-presented-to-dutch-parliament-
Q3: How can the TAPP proposal be a game-changer towards the EU ambition in the Farm to Fork Strategy of reserving 25% of agricultural land for organic farmers?
A: The TAPP proposal includes payments to farmers shifting to organic agriculture and to farmers who already produce organic food, including subsidies for marketing and sales of organic food products to increase consumer demand. The payments will be paid from revenues of European taxes on meat (e.g. 3-25% of all revenues). Revenues of meat taxes also can be used for farmers adapting to higher standards for sustainability and animal welfare or shifting to the growing market of other protein products. The demand for these products is generated by critical consumers who also are conscious citizens (‘consumcitizens’) and farmers who want a true and fair price for their daily work.
Q4: Why use taxes as an instrument to influence consumer (products)? Tax has never had a good track record in terms of efficiency, no?
A: Sciences shows that taxes often are the most effective and efficient ways to influence consumer habits, more than information or nudging campaigns or subsidies. The use of fossil fuels, cigarettes and alcohol is reduced by imposing taxes in many countries. According to economics, prices should reflect all external costs, like GHG-emissions. Taxes are seen by TAPP Coalition as the best way to implement true prices in the future, including external costs like GHG-emissions in food products. The TAPP coalition realizes that tax (as such) is merely an instrument, not the end target. The intention of TAPP is firstly, to earmark tax revenues for making the agricultural sector more sustainable and resilient and to reduce consumer prices of healthy, sustainable food like vegetables. Secondly, our integrated tax proposal is intended to have a positive effect on greenhouse gas emissions, nitrogen and biodiversity losses and related EU policy ambitions, like improving public health and reducing health care costs.
Q5: Does TAPP has evidence that tax is an efficient instrument to facilitate their transition?
A: To fight obesity in all countries in the world, the World Bank last February asked governments to start taxing unhealthy foods like sugar and meat products: https://tappcoalition.eu/nieuws/13251/world-bank-asks-governments-to-introduce-taxes-on-unhealthy-food-like-processed-meat Evidence from country reviews (OECD, Working Party on Agricultural Policies and Markets, April 2019) suggests that policy incentives towards environment and resource sustainability need to be realigned, by removing environmental harmful subsidies, while using taxation or market mechanisms to meet environmental objectives. E.g.: Sweden was one of the first countries worldwide that introduced taxes on pesticides in 1984. Combined with other policy measures, the tax contributed to a reduction of more than 50% of pesticide sales nationally, and a large decrease in pesticide risks for human health and to the environment.
Q6: Does a higher meat price negatively impact low income groups?
A: If governments would start taxing meat, making meat 20-40% more expensive), special care is needed for the position of low income groups so they still can afford to buy the food they like. Neglecting this element would also make it harder to have public and political support for taxing meat. TAPP Coalition proposed to use revenues of meat taxes partly to reduce prices of other kind of foods, like vegetables and fruits and plant based proteins (e.g. by reducing VAT tariffs or subsidising healthy lunches with 80% vegetables, fruits). In addition to this, the TAPP coalition proposes to increase purchase power of the 20-30% lowest income groups with 10 euro/month, so the lowest income groups will be net benefitters if governments would start taxing meat. For instance, governments could increase state payments to elderly or sick people, students and other low income groups, or increase state payments for health care costs to low income groups. If EU countries would start taxing meat, health care costs would go down with 9 billion euro/year in the EU, according to an Oxford University report 'Health taxes on meat', because people will eat less meat and this will reduce numbers of patients with diabetes 2, cancer and cardiovascular diseases. Consuming less meat and more veggies is like stopping to smoke. It makes low income groups, communities and the society at large healthier and we all will have lower health care costs in the end. Which is most important for low income groups.
Q7: How can TAPP help the diverse and varied agriculture sector consisting not only of ‘factory farms’ but also small farmers at the countryside with marginal lands?
A: TAPP proposed that revenues from meat taxes stimulate alternative, green growth models for EU farmers with payments of 10-15 billion euro per year. EU livestock farms improving sustainability and animal welfare standards will profit, including small farmers at country sides with marginal lands. Examples are payments for carbon storage and improving soil quality, reducing GHG-emissions, planting trees, maintain or switch to organic farming, reducing livestock (and provide more space for animal welfare) or switch to alternative protein agriculture. These are additional payments from consumers of meat products to farmers not paid at this moment (redistributed by governments). Average EU livestock farmers will earn 5000 euro more per year with this new sustainable business model.
Q8: Will a tax on meat lead to a rural exodus if more farmers will stop?
A: No, a tax on meat in EU countries will not mean that more farmers will have to stop. It will be the opposite. Yes, EU demand for meat products will reduce (so some factory farms will have to stop and they can be encouraged to stop or reduce the numbers of animals per farm with subsidies or shift to making other products). However, demand for meat alternatives and vegetables will increase. Meat tax revenues (32 billion euro per year at EU level) can be used by at least 30-50% by paying additional income support to EU farmers for investments in sustainability, innovation, biodiversity and animal welfare, eg. in organic farming with a higher demand for employment. Bottom line, rural employment will grow if meat tax revenues are used in a proper way.
Q9: Will a tax on meat export problems to third countries?
A: No, meat production will not be relocated to other countries if a tax on meat will be introduced in EU countries. Revenues of meat taxes can be used to help farmers to reduce the number of animals to balance demand and supply and keep meat prices at desired levels. Imported meat will be taxed in the same way as meat produced in a specific country, so there is no incentive for third countries to export more meat to an EU country with a meat tax (excise duty or higher VAT tarrif).
Q10: How can we avoid using cheaper meat products from abroad to compensate for the costs of tax?
A: Imported meat products will be taxed as well, while the revenues ought to be redistributed to sustainable farming in the EU (and for compensations of deforestation and GHG-emissions in countries were EU animal feed is produced and cause harm, eg. In Latin America). The proposal is that EU member states introduce excise duty taxes on meat (per kg meat) for all kinds of meat sold at consumer level. No distinction is made in the origin of meat, while tariffs are only based on calculations of (average) environmental and other external costs per kg meat, differentiated in chicken meat, pork and beef. Alternative tax models could be border tax adjustment mechanisms to tax meat exported to the EU, based in environmental, safety and/or animal welfare standards.
Q11: Can a meat tax be applied at EU level without going against the spirit of treaties? Taxation powers rest with the national authority, no?
A: On general EU member states have the authority to decide what to tax, for instance meat producs (excise duty or higher VAT tariff). On the basis of article 113 and 114 (2) of the TFEU (Treaty on the Functioning of the European Union), the EU does have the power to harmonize indirect national taxes and to influence direct national taxes when this is necessary for the establishment and functioning of the internal market.
The EU Farm to Fork (F2F) Strategy (published 20th May 2020) announced tax incentives that could reduce consumption of food with high foot prints. The EU Commission wrote: “Tax incentives should also drive the transition to a sustainable food system and encourage consumers to choose sustainable and healthy diets. The Commission’s proposal on VAT rates (currently being discussed in the Council) could allow Member States to make more targeted use of rates, for instance to support organic fruit and vegetables. EU tax systems should also aim to ensure that the price of different foods reflects their real costs in terms of use of finite natural resources, pollution, GHG emissions and other environmental externalities”.
Furthermore, one could define the meat replacing plant based protein market as the establishment of a new, green growth market, which should be supported.
Q12: Does the TAPP proposal respect the EU Common Agriculture Policy aimed at assuring the availability of foodstuff supplies and assuring that foodstuffs reach consumers at reasonable prices?
A: The TAPP proposal is aimed at making fruit and vegetables cheaper, hence making it available at a reasonable (even lower) prices. In contrary, meat prices will be corrected through an internalization of external costs, currently being paid by other sectors (healthcare, water companies etc).
Q13: How can the new TAPP coalition withstand the political and marketing agenda of the established agricultural sector?
A: The TAPP coalition has no intention to withstand any sector. Instead, TAPP is open for dialogue and new partners willing to generate ‘fresh air’ to future generations and to the beloved Agri sector.
Q14: Do we need any kind of feasibility study to analyze the effects of the TAPP proposal?
A: The TAPP coalition would warmheartedly cooperate in any feasibility and impact study. TAPP commissioned an impact study already, written by CE Delft Consultants in 2020: ‘A sustainability charge on meat’.
Q15: What is at the heart of the TAPP proposal that traditional/industrial livestock is lacking?
A: The TAPP coalition wants to revalue food through the introduction of true prices for animal proteins for a positive future!
Q16: What is the anwser of Tapp Coalition to an opinion article 20th May 2020 from Copa Cogeca (EU farmers association) to the TAPP Coalition proposal for a fair price on meat at EU level?
A: Copa Cogeca published an opinion article on its website one day before the Farm to Fork Strategy was published because the EU farmer organsation knew the EU would present plans to tax meat or to increase meat prices as an important part of the Farm to Fork Strategy (EU Green Deal). See: https://www.marketscreener.com/news/OPINION-PIECE-by-Joe-Healy-A-European-tax-on-meat-a-proposal-that-could-be-as-simplistic-as-count--30638770/
The questions 1-14 are derived from the opinion article so the answers can be read here. EU farmers do not have to fear a true, fair prices on meat, paid by consumers in the form of an excise duty per kg meat, and using revenues to pay farmers to increase standards for sustainability and animal welfare and farm income. This is why several Dutch farmers organisations including dairy farmer organisations support the TAPP Coalition proposal for fair meat prices.
Q17: Will organic or 'slow/high quality' meat be taxed in the same way as industrial meat?
Yes, and this does not seem to be fair, but yes, it is. Organic and other 'high quality' farms will benefit much morre from subsidies paid to farmers from the revenues of meat taxes, paid by consumers. In this way their income will increase considerably. Industrial farmers will not benefit or less (only if they switch to higher standards for animal welfare and sustainability). In addition, the price difference between organic/better meat products and conventional meat will become smaller instead of bigger, so people will buy more organic and 'better' meat (even if a true price, a higher price have to be paid).
A VAT increase on meat would increases the already very large price difference between organic meat and conventionally produced meat, while an excise duty per kilo of meat makes the price difference between organic meat and conventional meat a lot smaller. This also applies to other meat made with more attention to the environment or animal welfare.. For this reason, the German organic farming organization argues for an excise duty on meat and no VAT increase on meat like the Greens and SPD asked in september 2019. How does this work?
Imagine: conventional meat costs 4 euros per kilo in a supermarket and the same type of organic meat costs 7 euros per kilo. These proportions are now quite normal in supermarkets. Imagine there will be an excise duty for all meat products of approximately 20 euro cents per 100 gram of meat, or 2 euros per kilo. The result: conventional meat will be 50% more expensive and ... organic meat will be 'only' 22% more expensive. The relative price difference will become much smaller, organic meat will become relatively cheaper. With other numbers, the principle remains the same: if the excise tax becomes 1 euro per kg, conventional meat becomes 25% more expensive, but organic meat 12.5% more expensive. As a result, it is expected that consumers will buy quality meat more often, with more attention to the environment and animal welfare. When they eat meat, it will be made easier to eat less and better meat and enjoy the taste of it even more.
