Increases in the cost of agricultural diesel are not being driven by the Russian invasion of Ukraine, by international factors or by any other global influences, according to TD Matt Carthy.
The Sinn Féin agriculture spokesperson claimed the additional cost on farmers and contractors will instead be driven by the planned changes in the carbon tax on the fuel from 1 May and September.
He said: “In a move widely derided as insufficient, the Government reduced excise on agri-diesel from €138.17 to €120.55 per 1,000l, or 2c per litre, from 10 March.
“However, the carbon tax element of excise duty on the fuel is set to increase on 1 May – bringing the charge back to €138.17."
Carthy described the 2c per litre excise cut to agricultural diesel as “minimal and insufficient”. He said at a time when “input costs are pushing them to the brink”, farmers and contractors will be “astounded to learn that the reduction will be undone after just seven weeks if the carbon tax hike goes ahead on 1 May”.
“This was confirmed by Minister Paschal Donohoe at the Oireachtas Finance Committee. He acknowledged that the excise take on agricultural diesel will return to its 9 March level in May and that it will then increase further to €158.50 in September when the temporary measure expires,” he said.
Rebate review underway
Carthy also noted that Minister for Finance Paschal Donohoe has confirmed that a review into the status of farm contractors regarding carbon tax rebates is underway.
He said: “The minister has now confirmed that it is underway, and he intends to complete the exercise prior to the budget, though when pressed would not commit to bringing forward measures in the budget arising from that review.
“Currently, farmers can avail of a rebate on the carbon tax if their income is sufficient. However, the same provision is not in place for farm contractors despite the fact that they are carrying out agriculture work. Contractors have no choice but to pass on the charge to their customers – effectively making it an additional cost to farmers.”
After the rebate review being promised in 2019 and “repeatedly deferred”, the Cavan–Monaghan TD warned that “there can be no further delays”.
“During a period of escalating input costs, farmers need support. One such support must be through a rebate of the carbon tax for those doing essential agriculture work, for which there is no fuel alternative yet,” Carthy said.