Tax relief needed for sustainable production

By Noli Dinkovski

- Last updated on GMT

Soil degradation costs the farming sector £250M a year
Soil degradation costs the farming sector £250M a year

Related tags Sustainability

Food and drink firms should be given tax relief to help them invest in improving both production and the environment, a green think tank has claimed.

UK food production costs were being pushed up by the “poor quality environment”​ of UK farmland – and new government policies were needed to increase investment in its restoration – according to a Green Alliance report supported by Nestlé.

Unsustainable farming practices were reducing the efficiency of the UK food sector, the ‘Natural investment: futureproofing food production in the UK’ report found.

Soil degradation alone amounted to £250M of extra costs each year, mainly through increased fertiliser and tillage costs, it claimed. Water pollution and biodiversity damage, such as the loss of vital pollinators, meant the true figure was even higher, the report added.

Provide tax relief

The government should provide tax relief on capital investments in environmental restoration on farmland, as an extension of the existing capital allowance system for energy and water saving investments, the Green Alliance said.

Its second proposal was a ‘sustainable food pact’, bringing together food firms in a pre-competitive collaboration to reduce damage to farmland.

The government should set clear objectives around the improvements required, as well as the consequences for not delivering them, and support the initiative with expertise and resources, the study argued.

Currently, most environmental protection policies were targeted at farmers and land managers, yet over 90% of the money generated by the food sector (nearly £100bn a year) lay with non-farming food businesses, the Green Alliance said.

Industry-wide solutions

Anna Turrell, senior public affairs manager for sustainability at Nestlé UK, called on the government to support the creation of a “collaborative space”​ where farmers, manufacturers and retailers could come together to develop industry-wide solutions collectively.

“As a food manufacturer, we know that our business is dependent on preserving and maintaining healthy ecosystems that, in turn, provide us with the ingredients we need to produce our products,”​ she said.

“To ensure that the sector can provide food for generations to come, we need to address the environmental challenges we face today. Healthy soils, clean water and the preservation of biodiversity are all critical elements to ensure the long-term sustainability of our food systems.”

William Andrews Tipper, head of sustainable business at Green Alliance, said: “By running down our natural environment we have actually made our food sector more vulnerable and less resilient.”

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