Losing Red Diesel

[Chris F]

I heard this week, and it was quite categorically stated that farming will be losing red diesel. This was discussed at the same time as BPS being phased out. This wasn't a might - but very much an it is happening.

It was stated by Dieter Helm who has been doing a lot of the work on Natural Capital that we are going to be able to apply for after BPS. So he tends to talk about what is happening and as such clashes with Minette Batters and @Guy Smith a fair bit.

A speech he did on Natural Capital:

Has anyone else heard this - its a big deal in terms of costs for farmers?

 

[Deereone]

They already use DERV on the continent and reclaim that which they use for agriculture.

 

[james ds]

They already use DERV on the continent and reclaim that which they use for agriculture.

The biggest problem would be the theft of road diesel from tanks and machines , it wouldn't be possible to keep it safe .

 

[Electronic]

It isn't just farming that uses red diesel, what about construction sites, engine driven refrigeration on supermarket lorries, trains, even rail replacement bus services are allowed to use red diesel.

I think there are a lot of people who will make a fuss but if the public think it is just 'rich farmers' who are privileged to use cheap fuel then it will probably go ahead...… Then they will complain the cost of food has gone up.

 

[Nearly]

It isn't just farming that uses red diesel, what about construction sites, engine driven refrigeration on supermarket lorries, trains, even rail replacement bus services are allowed to use red diesel.

I think there are a lot of people who will make a fuss but if the public think it is just 'rich farmers' who are privileged to use cheap fuel then it will probably go ahead...… Then they will complain the cost of EVERYTHING has gone up.

 

[Andrew]

It isn't just farming that uses red diesel, what about construction sites, engine driven refrigeration on supermarket lorries, trains, even rail replacement bus services are allowed to use red diesel.

I think there are a lot of people who will make a fuss but if the public think it is just 'rich farmers' who are privileged to use cheap fuel then it will probably go ahead...… Then they will complain the cost of food has gone up.

Food price won’t go up. Kit has gone up 60-80% in recent years and food price hasn’t. We’re too small a nation to make a jot of difference to world food prices, if we can’t compete the supermarkets will buy from abroad.

 

[DrWazzock]

It seems to be the case that every time I make a saving by cutting down on fuel usage for example by less cultivation, then they move the goalposts to put my costs back up to where they were before I started.

Treading water in this respect.

 

[Guy Smith]

I heard this week, and it was quite categorically stated that farming will be losing red diesel. This was discussed at the same time as BPS being phased out. This wasn't a might - but very much an it is happening.

It was started by Dieter Helm who has been doing a lot of the work on Natural Capital that we are going to be able to apply for after BPS. So he tends to talk about what is happening and as such clashes with Minetter Batters and @Guy Smith a fair bit.

A speech he did on Natural Capital:

Has anyone else heard this - its a big deal in terms of costs for farmers?

Dieter Helm wouldn't stop at taxing the diesel we use - pesticides, fertilsers, medicines would also be in his tightened tax vice on agriculture. He'd also lower or scrap inheritance tax reliefs on land aswell as scrapping support payments.

While the language around Natural Capital maybe new the proposals aren't - the NFU has been fighting such taxes proposals for years - the VI got set up to prevent a pesticides tax.

It's not difficult to counter his proposals. They would lead to one of two things - maybe both.

1. The increase in food imports and the diminution of UK farm production as we become higher cost producers and uncompetitive against foreign competition. The only way to protect against this is through tariffs and quotas on imports. That would be difficult politically in trade negotiations and under WTO rules but if it were achieved it would lead to

2. Significantly high food prices for consumers.

As for the concept of natural capital - it is an interesting attempt to monetarise non market goods. Note how he thinks you can put a value on landscape beauty. To my simple mind that will never be about market economics - it will always be about political policy.

He an interesting man Dieter Helm. He was the son of an Essex farmer just over the estuary from me at Tillingham. His brother has what's left of the family farm. Meanwhile Dieter went into academia and economics. For some reason when it comes to things like environmental impact he scrutinises agriculture in a way he doesn't scrutinise other manufacturering industries. Agriculture isn't the only industry to use fuel or chemicals or get support or tax reliefs.

I could go on.

Guy

 

[Clive]

Sounds like incentive for efficiency to me - can’t be a bad thing, things have to change and can’t continue as they have

But I also agree with Guys point above - we can’t continue to compete globally with an arm tied behind our backs

We need global agreement and change not local ........ which is unlikely

 

[milkloss]

Then they will complain the cost of food has gone up.

Funniest thing I’ve read all week!!

Does anyone else on this forum really believe the cost of food (or more accurately, the prices paid to us) will actually rise?

Let’s be realistic.

 

[Suffolk Serf]

Funniest thing I’ve read all week!!

Does anyone else on this forum really believe the cost of food (or more accurately, the prices paid to us) will actually rise?

Let’s be realistic.

It can happen. I've heard reports that the retail price of pork has recently DOUBLED in china, owing to their African Swine Fever crisis.
The point about the tax on DERV is surely that the tax helps maintain the roads (laughably) and that red diesel is largely used off road, just the rules get bent a bit too much sometimes.

 

[Still Farming]

Only the rain comes down !

 

[farmerm]

Funniest thing I’ve read all week!!

Does anyone else on this forum really believe the cost of food (or more accurately, the prices paid to us) will actually rise?

Let’s be realistic.

Not for one second. Measures that cause food price inflation result in the sitting government to hemorrhage voters like nothing else. The first world solution to many problems is to import the product and export the environmental impact of its production/disposal.

 

[Still Farming]

Not for one second. Measures that cause food price inflation result in the sitting government to hemorrhage voters like nothing else. The first world solution to many problems is to import the product and export the environmental impact of its production/disposal.

Down down down all we receive.

 

[farmerm]

It can happen. I've heard reports that the retail price of pork has recently DOUBLED in china, owing to their African Swine Fever crisis.
The point about the tax on DERV is surely that the tax helps maintain the roads (laughably) and that red diesel is largely used off road, just the rules get bent a bit too much sometimes.

The retail price of pork has doubled in China because they have lost half there national pig herd and they produce something like half the worlds pork! If the cost of production of wheat in the UK doubled or even tripled, it would barely nudge the world price, we only account for something like 0.2% of global production.

 

[Chris F]

Dieter Helm wouldn't stop at taxing the diesel we use - pesticides, fertilsers, medicines would also be in his tightened tax vice on agriculture. He'd also lower or scrap inheritance tax reliefs on land aswell as scrapping support payments.

While the language around Natural Capital maybe new the proposals aren't - the NFU has been fighting such taxes proposals for years - the VI got set up to prevent a pesticides tax.

It's not difficult to counter his proposals. They would lead to one of two things - maybe both.

1. The increase in food imports and the diminution of UK farm production as we become higher cost producers and uncompetitive against foreign competition. The only way to protect against this is through tariffs and quotas on imports. That would be difficult politically in trade negotiations and under WTO rules but if it were achieved it would lead to

2. Significantly high food prices for consumers.

As for the concept of natural capital - it is an interesting attempt to monetarise non market goods. Note how he thinks you can put a value on landscape beauty. To my simple mind that will never be about market economics - it will always be about political policy.

He an interesting man Dieter Helm. He was the son of an Essex farmer just over the estuary from me at Tillingham. His brother has what's left of the family farm. Meanwhile Dieter went into academia and economics. For some reason when it comes to things like environmental impact he scrutinises agriculture in a way he doesn't scrutinise other manufacturering industries. Agriculture isn't the only industry to use fuel or chemicals or get support or tax reliefs.

I could go on.

Guy

I see now why you weren’t at the Sustainable Food Trust event Guy! So you think we are losing red diesel then? Or is it just one of his ideas? The natural capital stuff is in the new Agriculture bill isn’t it?

 

[Suffolk Serf]

The retail price of pork has doubled in China because they have lost half there national pig herd and they produce something like half the worlds pork! If the cost of production of wheat in the UK doubled or even tripled, it would barely nudge the world price, we only account for something like 0.2% of global production.

And the Chinese situation has barely rippled the UK pig price either. Something stinks.

 

[deleted user 837354]

Too many other users of red diesel. Huge volumes used in construction and mining etc.

 

[Hampton]

Can’t see it going in my lifetime. Too many industries rely on it.
Interesting to see, yet again, that some farmers see this as an opportunity. Divide and conquer yet again.

 

[Tomr10]

Colour makes no difference the tax on it however, could be taxed per use difficult for checks then though