Sales tax urged on agricultural chemicals
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Farmers in 29 states are exempt from paying sales tax on agricultural chemicals.
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July 13, 1999
Web posted at: 5:48 p.m. EDT (2148 GMT)
Friends of the Earth and an alliance of environmental, farm and consumer groups are requesting that officials in 29 states impose a sales tax on agricultural chemicals such as pesticides and insecticides.
About $674 million is lost each year because of the exemptions, according to a recent report endorsed by the alliance members. That money, they say, should be used for sustainable agriculture, family farms and conservation education.
The alliance includes the Alabama Rivers Alliance, Environmental League of Massachusetts, Florida Certified Organic Growers and Consumers (Florida Organic Growers), Hoosier Environmental Council of Indiana, Massachusetts Public Interest Research Group, Safer Pest Control Project of Illinois and the Vermont Public Interest Research Group.
"Our strategy is getting the exemptions removed on the chemicals and earmarking the funds for sustainable agriculture and other programs that would support family farmers," said Valerie Frances, author of the report.
The report, Fair Agricultural Chemical Taxes: Tax Reform for Sustainable Agriculture, can be found at the Friends of the Earth web site.
One focus of the report is on the health and environmental problems caused by using pesticides and fertilizers in agriculture. Because farmers utilize the chemicals and they are a source of pollution, the coalition believes farmers should pay to clean up the damage from the chemicals. The report estimates nationwide health and environmental costs as a consequence of pesticide use to be about $8 billion a year.
"We are not worried about exemptions that have nothing to do with pollution," said Frances. "Friends of the Earth wants to see economic policies that affirm environmental health."
The report lists the 10 states losing the most potential revenue:
- Minnesota ($65 million);
- Texas ($62 million);
- Illinois ($59 million);
- California ($54 million);
- Florida ($50 million);
- Indiana ($45 million);
- Washington ($36 million);
- Kansas ($36 million);
- Ohio ($35 million) and
- Missouri ($27 million).
"If the overall amount of money lost was directed toward sustainable agriculture, it would be a huge boost," said Frances.
According to the report, of the $175 billion spent by U.S. farmers to grow crops in 1996, about $20 billion was paid to the agrochemical industry. About $11 billion was spent on chemical fertilizers and about $9 billion on pesticides. The report calculates that if an average sales tax of 5 percent were collected on these sales, about $1 billion aer year would be available to address problems created by the use of these chemicals.
The report also suggests several options for state officials to develop a sales tax to meet their state's specific needs. These include reducing property tax assessment rates on farmland; supporting successful estate transitions to the next generation of farmers; creating or increasing statewide programs which pay farmers to practice environmentally friendly farming and providing funding to help farmers transform their crops to organic.
Now that they have raised awareness of this issue, the next step for Friends of the Earth and the alliance is to help those states form state sales tax regulations. "It was Friends of the Earth's place to raise awareness of the issue. Now we will assist states and groups who want to take on the campaign," said Frances.
Copyright 1999, Environmental News Network, All Rights Reserved
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RELATED SITES:
Friends of the Earth
Hoosier Environmental Council
Florida Certified Organic Growers & Consumers
Natural Resources Defense Council
State Public Interest Research Groups
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