Current policies on Value Added Tax (VAT) and agricultural subsidies are major hurdles to achieving a sustainable and fair food system. Though these financial tools were designed to promote economic stability and growth in the UK and EU, they now unintentionally contribute to inequality and environmental damage, favouring the traditional meat and dairy industries.
In the latest New Food Hub article, ProVeg International breaks down the current landscape for VAT and subsidies within the UK and EU and discusses how policymakers and businesses can work to create a fairer food system.
The problem with the current system
In many countries, the VAT system is stacked against plant-based foods. Meat and dairy products often benefit from lower tax rates or even exemptions, while plant-based alternatives are taxed at higher rates. This makes animal products cheaper to buy and can imply to consumers that they are better choices, even though their production is much more damaging to the environment.
On top of that, subsidies overwhelmingly go to those producing meat and dairy. In the European Union, for example, billions of euros are directed to these industries every year. These subsidies lower the production costs of animal products, keeping their market prices low and making it harder for plant-based foods to compete. As a result, people end up buying more meat and dairy than they might otherwise, which isn’t great for their health or the planet.
The case for change
Reforming VAT and subsidies isn’t just about money – it’s about doing what’s right. If we adjust these policies, we can help people make better food choices that are good for them and the environment. By lowering the VAT on plant-based foods, we can make them more affordable and attractive. This would also signal a societal shift towards valuing health and sustainability.
Redirecting subsidies from meat and dairy to alternative proteins would have big benefits too. It would encourage the development of more and better plant-based products, making them more available and appealing. Farmers would be incentivised to adopt sustainable practices, reducing agriculture’s environmental impact. Healthier diets would likely follow, with fewer chronic diseases as people consume more plant-based foods.
So, how do we make this fairer food system a reality? Head to the New Food Hub to read ProVeg’s latest article and discover the steps both policymakers and businesses can take to help level the playing field for alternative proteins.
