Organic products should be given tax breaks throughout the European Union to help them compete with conventionally grown goods, a green lobby group proposed on Tuesday.
A study commissioned by the European Environmental Bureau (EEB), a federation of green groups in all EU member states, said some €2.6 billion would be needed to ensure that 10 per cent of EU farmland is devoted to organic production by 2006.
Gerwin Verschuur, spokesman for the Dutch-based Centre for Agriculture and Environment which carried out the study, said fiscal measures would help many conventional farms go organic.
"Instruments that stimulate demand for organic produce are particularly important and a VAT (value added tax) rate of zero per cent may be one of the options," he told journalists at a briefing in Brussels.
The EEB has presented the study to European Farm Commissioner Franz Fischler urging that the results be included in the Commission's plans on further reforms to the Common Agricultural Policy due in 2002/2003.
The EEB said a zero per cent VAT rate on organic goods would cause consumer prices to drop, increase demand by 10 per cent and bring into use an extra 300,000 hectares of farmland.EU member states such as Germany, Denmark, Austria and Finland with the highest VAT rates would see the biggest changes. Denmark, for example, levies 25 per cent VAT on food.
The EEB study also called for levies on the use of herbicides and nitrates, and for the money generated to be invested in organic farming.