Association of Farm and Forestry Contractors in Ireland (FCI) chair John Hughes has said that now is not the time for the Government to use fuel taxation strategies, especially when there is no non-diesel engine alternative commercially available in Ireland to diesel-powered tractors and harvesters.
Hughes has called on the Department of Finance and the Government’s Tax Strategy Group to carry out a financial and technical assessment of the actual costs to Irish farming’s competitiveness of removing the excise duty differential between green diesel used in agriculture and white diesel used in the transport sector.
The chair commented: “Adding more than 50 cent per litre to the current high green diesel prices, which have already increased by over 55% since 2020, will further increase the carbon tax component of the diesel price.
“This will push the diesel cost to Irish farm and forestry contractors up by more than €170m annually."
Hughes was adamant that contractors will be forced to pass any significant fuel cost increases on to their farming clients in the form of substantial increases in contractor charges in 2022.
“Our FCI members are environmentally ambitious, they have made significant financial investments in new machinery using additional costing AdBlue technology to lower emissions from available diesel engine technology.
“There is simply no commercially available alternative to diesel-powered tractors and harvesters to achieve the Government’s objective of de-carbonising the Irish economy,” insisted Hughes.
“The Irish farming and food industry and the Irish economy will be the loser as will the national balance of payments if we are not able to sustainably produce food in a world competitive way,” he added.
The association’s research shows that the farm and forestry contracting sector consumes upwards of 340 million litres of diesel annually, close to 62% of all diesel fuel consumed in Irish agriculture.
According to Hughes, there are 1,000 farm and forestry contractors now listed on the FCI database, each working across an average of three Irish farms per day.
This amounts to 3,000 farmer and farm contractor interactions each day, or 18,000 farmer and farm contractor interactions each week of the working season.
Given a working year that comprises an average of 30 weeks of direct farm mechanisation work, this equates to over 500,000 farmer and farm and forestry contractors interactions each year, across 139,600 Irish farm holdings.
“Fuel taxation strategies need to take this into account, as over 80% of Irish farmers depend on farm and forestry contractor services to achieve their production targets.
“Without farm and forestry contractors, the agri-food system would simply not exist,” he added.