The government has U-turned on a £200-a-tonne plastic tax for silage wraps following extensive lobbying efforts by farming industry groups.
HMRC issued guidance over Christmas that listed silage wrap as ‘packaging’ for the first time, and subject to the Plastic Packaging Levy.
Treasury officials confirmed the change in early January, amid fears within the industry that the cost would be passed on to farmers.
The NFU, alongside NFU Scotland and other industry groups, challenged the decision in briefings to MPs.
While supportive of efforts to reduce farm plastics, the NFU had stressed that the primary role of silage wrap was to ensure silage fermentation, which exempted it from the packaging levy.
The union also argued that the function of silage wrap made more recycled or biodegradable wraps impractical.
In a letter of response to the NFU, the Treasury said that "following further careful analysis, HMRC has confirmed that silage film falls under an exemption."
"Representations made by you and others have demonstrated that (it) is a highly specialised product, the primary purpose of which is to enable fermentation," the Treasury added.
At an earlier Westminster Hall debate, Amber Valley MP, Nigel Mills, said the proposed reclassification had come at short notice.
“Industries have not prepared for it and the costs will fall directly on farmers at a very difficult time,” he said.
He added that while nobody would argue against the aims of the new tax, its application in this case risked undermining voluntary recycling efforts by many farmers.
He noted that some had been paying around £60 per tonne for used wrap collection, so adding extra costs would reduce participation in such schemes.
NFU Deputy President Stuart Roberts had also called for a rethink, noting that coffee pods and boil in the bag rice packets were exempt from the tax, despite often proving far harder to recycle and clear alternatives being available.
He added: “The NFU would like government to support improvements to domestic recycling of more contaminated plastic feedstocks such as silage wrap.
“This could improve the circular waste economy and minimise costs for recycling plastics used on farms.
“In the longer term, we are also calling for further support to develop affordable, technically suitable silage films produced with more recycled content, or from bio-based alternatives.”
NFU Scotland also welcomed the Treasury's U-turn, as it "properly recognises the the integral role that plastic wrap plays in the production of silage".
The union's environmental policy manager, Sarah Cowie said: “With input prices soaring, avoiding a taxation cost of £200 per tonne of wrap is also very welcome at this time.
“Appropriate alternatives to plastic wrap have yet to be developed but farmers and crofters remain committed to farming in the most environmentally friendly way.
"That sees widespread industry uptake of the schemes already available to collect silage film from farms, crofts and collection centres and recycle it."
