Ministers in talks over shelving carbon tax on fertiliser to curb food inflation

Ministers are in discussions about suspending a carbon tax on fertilisers, due to come into effect early next year, in an effort to curb food inflation. The move would be part of a package of measures, including the suspension of import tariffs on a range of foods including bread, biscuits and bananas. Government sources said they were looking at suspending tariffs on a range of fertilisers in order to discourage farmers from leaving fields fallow. But, they added, there was tension between the Treasury and the Department for Business and Trade (DBT), because the Treasury did not want to amend the Finance Act 2026, which it would have to do to suspend the carbon tax . The DBT is consulting on a range of ways to reduce the price of fertiliser for the agriculture sector and is working with farmers to assess all tariffs. Imports from some countries are currently subject to a duty of 6%. Farmers have been considering leaving their fields fallow because rising costs mean they risk selling their 2027 crop at a loss. This would increase food inflation, which is already expected to rise sharply as the conflict in Iran raises fuel and fertiliser prices. Sources at the National Farmers’ Union said a proposal was being discussed with the Treasury and DBT but nothing had been confirmed. Fertiliser costs have soared since the beginning of the Iran conflict , during which the strait of Hormuz has been closed. …