New green taxes on fertiliser risk making UK crop production unviable, leaving swathes of fertile land unplanted, and will push up food prices, farmers have warned

Expansion of agricultural green taxes risks making UK crop production unviable, leaving swathes of fertile land unplanted, farmers have warned.

The levy on imported nitrogen-based fertiliser could push up food prices, increase dependence on imports and even potentially lead to shortages, it is claimed.

The National Farmers’ Union has called on the government to postpone January’s planned expansion of carbon levies to imported fertilisers – which have already soared in price due to the Iran war, because they are made using natural gas.

Farmers are currently making crop planting decisions for next year and the combined extra costs could be as much as £80 per ton of wheat, when it only sells for £170-£200.

British fertiliser makers only have enough capacity to cater for 40pc of demand, with 60pc imported.

One farmer said the government’s green agenda was simply ‘pushing production overseas where there are lower standards’ just so ministers can ‘feel good about themselves’ for meeting carbon targets in the UK.

Arable farmer Clive Bailye, who runs The Farming Forum website, said it could be a ‘shutting down the mines moment’ as the extra costs could cripple farmers who are already operating on only very slim margins.

He said: ‘It’s a huge threat to viability, especially for farms already tight on margins.

‘Many farmers simply won’t plant this autumn unless something changes, which would see huge parts of the UK arable area left unplanted – but making zero income from an area of land is better than making a loss.

‘Maybe that’s what government wants? If so, it really is a “shutting down the mines” kind of moment for British agriculture.’

Staffordshire farmer Mr Bailye said the result will be that ‘food prices will rise and import dependency will increase’.

He said farmers want the carbon tax on fertiliser to be ‘scrapped immediately’.

Soaring gas prices could see ammonium nitrate fertiliser double in price, from about £300 to £600 per ton, adding nearly £50 to the cost of producing a ton of wheat.

The carbon tax would add a further ‘£32 or so per ton of wheat’, Mr Bailye said.

He said the combined extra costs add up to ‘£80 extra per tonne’, adding: ‘On a 1,000-ton wheat farm, that’s an £80,000 hit. For larger farms, it scales up.’

Mr Bailye added there is a risk particular crop types will not be grown, as British products are already uncompetitive.

‘Legumes (pulses, beans and peas) are high risk in the UK and cheap imported genetically-modified soya makes them look like expensive proteins so don’t compete,’ Mr Bailye said.

Fifth generation Berkshire arable farmer, Dan Willis, estimated the new taxes could cost his farm around £40,000.

He said: ‘I cannot understand the need for it. We’re pushing our production overseas, where there are lower standards, we’re not supporting the rural economy let alone food security.’

Mr Willis said the risks posed by any interruptions to shipping and trading routes could leave us ‘dangerously close to running out of food’.

He has applied to put some land under the government’s Sustainable Farming Initiative scheme through £1,000 per hectare is paid for crops to be grown which are then unharvested to support wildlife.

He said: ‘It doesn’t feel morally right when parts of the world are starving to leave crops unharvested. But we’ve got to get money in, we’ve got to pay the bills.’

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Mr Willis, whose farm supports eight staff and up to seven more at peak harvest time, blasted what he called a ‘crazy’ green agenda dreamed up by ‘people who live in a concrete jungle and want to feel good about themselves’.

NFU Deputy President Paul Tompkins warned the levy – under the Carbon Border Adjustment Mechanism - ‘risks having a material impact on growers’ and farmers’ ability to produce food at a time when we must grow domestic food production’.

He said: ‘Every extra cost on fertiliser runs the risk of feeding through the food chain, increasing the cost of producing food and adding to inflation for consumers.

‘We believe the best option would be to postpone CBAM and conduct a market review in 12 months.’

The NFU said the only fair way of introducing the policy would be to also add carbon levies to imported food – otherwise it would ‘simply be penalising British farmers whilst giving overseas producers a free pass’.

The government said British fertiliser producers are not hit by the levy and that it was ‘investing a record £11.8 billion investment to support sustainable farming and food production’.

A spokesperson said: ‘The Carbon Border Adjustment Mechanism is not expected to add large costs.

'Instead, it will though stop overseas producers undercutting British firms and help cut global emissions.’