The increase in fuel prices as a result of the conflict in the Middle East has led to a significant increase in costs for agricultural contractors.
The surge in the cost of green diesel is expected to increase farmers’ bills for contract services as the silage season approaches.
The Farm and Forestry Contractors Association of Ireland (FCI), as well as the Irish Farmers Association (IFA), have co-operated with the government over the rising costs of green diesel.
the The IFA has already published a range of potential proposals To offset costs. Now the FCI has published its own set of requests from the government.
It is known that these proposals were submitted to the Ministry of Finance At last week’s meeting.
The FCI made eight specific proposals.
Introducing a “targeted” agricultural diesel discount.
Current green diesel prices – around €1.50/litre before VAT – make contracting operations economically unviable, with sustainability thresholds falling between €88c/litre and €1.02/litre, the FCI said.
According to the group, a reduction of 50 cents per liter is needed to restore viability and maintain basic services, which should be provided in the form of a temporary energy subsidy scheme for agricultural contractors.
Suspension of carbon tax
The FCI wants to see a temporary suspension of the carbon tax on green diesel for the duration of the “fuel crisis”.
The organization also wants the carbon tax component of the diesel cost to be clearly identified and included as a separate line item on all supplier invoices.
Setting a ceiling on the price of green diesel
The FCI calls for a temporary cap on the price of green diesel to protect against further volatility.
Securing fuel supplies for agricultural use
The organization wants to see agricultural diesel prioritized and ring-fenced for essential agricultural activity in the event of supply disruptions.
In this case, access should be limited to FCI-registered agricultural contractors to ensure continuity of operations, the group said.
Classification as an essential service
According to the FCI, agricultural contracting should be recognized and included in official lists of emergency essential services.
The group said agricultural contractors “play a critical role” in ensuring the continuity of food production, especially during seasonal peak periods such as planting, harvesting and fodder operations.
“Any interruption in these services during emergencies could have significant and lasting impacts on agricultural production and food security,” the organization said.
Providing emergency capital support
The Foundation calls for accelerating agricultural contractors’ access to low-interest loans, with government guarantees to address eligibility barriers, especially for contractors who do not have land assets.
The group warned that the sector already receives significant funding to keep pace with the advancement of environmentally sustainable technologies, and is no longer in a position to extend credit to farmers.
Addressing input costs
The organization has called for temporary cost-offsetting support for other input costs that are also seeing inflation, including lubricants, spare parts and servicing.
Introduction to tax warehouses
Finally, the FCI called for farmers to be allowed to “buffer” tax liabilities so that funds can be redirected to pay for essential contracting services.
The group said it is aware of cases where farmers have chosen between using tax funds to pay for silage services, or keeping the funds allocated to meet tax obligations.
Meeting with the Department of Finance
The FCI said it is scheduled to meet with the Finance Ministry again next week “for an update on these issues.”
“Protecting the agricultural contractor and farm continuity is essential not only to maintain current production, but also to protect long-term food security, rural employment and the resilience of local economies,” commented Anne Gleeson Hanrahan, Managing Director of FCI.
