Contractor charges are up by 5% for 2019, according to the Association of Farm & Forestry Contractors in Ireland (FCI) annual price guide.

The association emphasised that this is only a guide and that charges may vary considerably.

The guide is put together by collating an average figure for each operation from a panel of FCI contractor members from across Ireland.

FCI noted that contractors will be quoting a 5% increase in charges to cope with increased machinery and labour costs.

The association noted that the recent increase in machinery costs are as a result of Tractor Mother Regulations (TMR), which have added to the cost of new tractors.

Payroll

The new Revenue payroll system that began in January has also had an effect, it said.

Employees must now be paid on a weekly basis and tax returns must also be issued weekly, contributing to additional costs.

FCI also highlighted that the cost of farmer credit is continuing to rise, with some contractors still having outstanding debt from 2018.

The association is encouraging all contractors to issue monthly or weekly invoices followed by monthly statements in order to help to manage cashflow. This level of long-term debt owed to contractors is estimated to be in excess of €60m.

FCI said this debt is costing the sector about €3.5m each year in interest, based on a 6% interest rate.