Low tax fuels use of harmful chemicals

Low import duty on pesticides and other chemicals, including ripening agents, growth hormones and dyes, is a major reason for their increased use and food adulteration, according to a recent study by Bangladesh Institute of Development Studies or BIDS.

At present, most pesticides including growth hormones are subjected to just 5 percent customs duty, 5 percent advance income tax and no value-added tax.

While the low tax rate is justifiable for achieving food security, it also encourages excessive use of pesticides and subsequently raises the risk of residue in the food chain, said the study titled 'Food Safety in Bangladesh: Practices, impact, policies and institutions'.

Citing secondary data, it said the traces of the chemicals are found in tomatoes, carrots, potatoes and cauliflower as well as in water bodies, and warned about the risks to human health.

Calcium carbide, widely used by dishonest traders to ripen fruits such as banana, faces only 10 percent customs duty and the total import tax, including other charges, is 37 percent.

Textile dyes too have only 5 percent customs duty and the total tax at import -- if all other charges are taken into account -- may increase to 31 percent or so.

“This is a low rate of tax given the public health concerns,” said the study led by M Asaduzzaman, a professorial fellow.

Subsequently, the BIDS study, which was conducted in collaboration with the International Food Policy Research Institute, recommended increasing the import duties by adding VAT and imposing higher advance income tax.

“This way the price of pesticides will rise, demand will fall and there would be more demand for alternative plant protection techniques such as Integrated Pest Mana-gement.”

Customs duty on formalin is 25 percent and the import cost along with other charges goes up to 61.09 percent. Given that formalin use is widespread, a rise in the total tax rate to 100 percent or more might be desirable, the study suggested.

The suggestion for hiking import duties for these adulterant chemicals comes in the face of surging use of pesticides by farmers to protect crops from pest attacks.

“Unless the pesticides are sprayed, a lot of crop damage may take place and the farmers will incur losses. So there is a strong economic incentive behind such pesticide sprays,” BIDS said in the study.

The growth of pesticide consumption in the country had been phenomenal, said BIDS, citing that its use grew by 10 percent annually from 1977 to 2009.

Total sales of crop protection chemicals peaked in 2008, when it hit 48,654 tonnes/kilo litres.

Since then, it has been dropping, but was as high as 37,781 tonnes in 2013.

Of note are the rising sales of fungicide for storage purposes and falling sales of insecticides. “Obviously to the consumer this is cold comfort, as it is them who either way bear the ultimate burden of ill-health.”

Meanwhile, referring to other studies, BIDS said that nearly half of the farmers using pesticides reported at least one health problem including headaches, dizziness and eye irritation.

While there are no hard data on the effect of consumption of pesticide-laced food on human health in case of Bangladesh, the deaths of 13 children in homes near lychee gardens in Dinajpur are a stark reminder of what may happen, it said.

The children were playing in the lychee gardens where pesticides were used heavily.  They all convulsed, went into coma and died roughly within a median length of 20 hours of coming into contact with the pesticides.

However, the international literature is replete with the adverse effects of pesticides on human health.

Many pesticides and herbicides are known carcinogens, with some affecting the endocrine system and some impairing the nervous system. Others irritate the skin and eyes.

Presence of DDT and other pesticides and herbicides in the body provide markers for the increased risk of breast cancer.

The BIDS study, noting the use of several banned pesticides such as DDT here, said the government and the Bangladesh Crop Protection Association pretend that such banned pesticides are smuggled into the country from India.

The neighbouring country is the largest producer of DDT in the world and is still resisting the phasing out of DDT by 2020, it said. The toxic chemical can also come through formal channel through use of false invoices.

The study said formaldehyde may cause adverse respiratory responses in children and adults. It is known to cause cancer in laboratory animals and may cause cancer in humans. Also, it may cause birth defects.

In addition to tax measures, the study suggested for immediate formulation of a comprehensive National Food Safety Quality Policy and establishment of a Food Safety Framework.

“Such economic measures along with strong institutions with adequate regulatory powers and budgetary and technical resources and skilled manpower should be able to ensure a healthy food future for Bangladesh,” said the BIDS study.