A new study showing how taxation can be a tool towards a more sustainable, fairer and more transparent food system was launched today at the first edition of the Best Economy Forum.

In its study Taxation as a tool towards true cost accounting, Soil & More Impacts analyses the six potential mechanisms of indirect taxation as a tool to show the true cost of food. The study shows that a tax on non-organic plant protection products (PPPs) and/or fertilizers is the most realistic way to account for the true cost of food. Such a tax may also discourage the use of environmentally unfriendly PPPs. According to Inka Sachse, researcher at Soil and More Impacts, the cultural and economic context of these taxes are crucial. She stated: “Only a combination of policy, taxation, communication and providing realistic alternatives is effective, whereas the taxation might be of lesser importance”.

Eduardo Cuoco, IFOAM EU director, said: “The organic movement commits to finding solutions for a fairer and more transparent food system. To achieve this, all operators in the system need to collaborate. Together they should ensure that value and power are fairly distributed, and that costs and benefits of food production are equitably accounted for.”

He added: “We need a paradigm shift in thinking about agricultural practices where prices reveal the true cost of production and consumption, including so-called externalities, that’s to say hidden costs such as water pollution which society as a whole currently bears.”

IFOAM EU says it wants wishes to work with policy-makers to develop a unified framework of indicators for true cost accounting. This, it says, would make the “polluter pays” principle tangible and rewards practices that deliver public benefits. The European organic food and farming movement hopes that this study is a stepping stone to shape a more sustainable, fairer, and more transparent food system.