'Meat tax' could cost economy £250m a year, study warns

A UK 'meat tax' could also force grazing livestock farms out of the industry, researchers warn
A UK 'meat tax' could also force grazing livestock farms out of the industry, researchers warn

A tax on red meat to help curb climate change could do more harm than good, UK researchers have warned in a new study.

A 'meat tax' would cost the economy £242 million a year, agricultural research institute Rothamsted Research has said in a study published in Scientific Reports.

The same tax could also force grazing livestock farms out of the industry, even when grassland is 'the most sensible land use at that particular location'.

Conversely, the savings resulting from reduced climate emissions were calculated in the region of £100 million per annum.

Combined together, the report from the institute concludes a tax on red meat to help curb climate change could do more harm than good.

Dr Taro Takahashi, agricultural economist who led the research, said the economic losses would not only be borne by livestock farmers, but everyone in society.

"Solely from the climate change perspective, our results unambiguously support everyone else's finding: that a red meat tax can reduce GHG emissions," he said.

"But unfortunately, this is only half the story. As well as impacting consumers and farmers, the knock-on effects will be felt right along supply chains as well as rural communities that support and are supported by farmers."

Last week's National Food Strategy report called for a 30 percent reduction in meat consumption but steered clear of suggesting a meat tax, calling it "politically impossible".

The 288-page report, released on 15 Jul) by businessman Henry Dimbleby, said that, instead, alternative proteins must be developed on a larger scale.

But rather than a blanket tax, Dr Takahashi said a better solution would be to look at which areas of the UK are best kept as cattle and sheep farms, and which would be better turned to other uses such as cereal production and agroforestry.

"This would involve a more nuanced approach of weighing up the carbon savings against the amount of nutrients produced and the impacts on the economy, both locally and nationally."

Rothamsted's study modelled economy-wide impacts of meat tax and estimated that, even under moderate tax rates previously proposed for the UK (19% for meat and 11% for dairy), economic losses would amount to £24m per year.

These losses resulted from transfer of land and labour forces from livestock farms to arable farms and non-agricultural industries.

It found meat and milk production would decrease, with substantial greenhouse gas savings recorded both directly on farms and indirectly at connected industries, such as the manufacturing of agrochemicals.

Under the proposed tax, such climate change causing emissions were predicted to decrease by 2.5 Mt CO2 equivalent per year – equating to a monetised social benefit of £101m per annum under the same carbon price (£41/t CO2 equivalent) used to derive the assumed tax rates.

Advocates of a meat tax argue that economic models predict a significant reduction in GHG emissions as a result of taxation.

"However, many of these analyses do not consider wider effects of taxation beyond red meat and dairy markets, and as such the macroeconomic impacts associated with a shrinkage in the livestock industry were mostly unknown before this study," said Dr Takahashi.

The next step for the research team is to identify when exactly grassland should remain grassland for sustainable food production, a task Dr Takahashi describes as "critical" for the future of UK agriculture.

"Given that we currently consume more livestock products than nutritionally recommended, it is perhaps socially suboptimal to maintain all of today’s grasslands for grazing purposes.

"The question, then, is under what soil, local climate and other geographical conditions are they desirable to society?

"We absolutely need to answer this question before telling a specific farmer to stop rearing livestock, because otherwise some unintended consequences are very likely."