Farm and Forestry Contractors in Ireland (FCI) has called on the Minister for Finance Paschal Donohoe to postpone the planned increase in the carbon tax, due to come into effect on 1 May.

FCI has said its members are now experiencing significant cashflow difficulties as a result of the COVID-19 crisis.

This is now being converted into increasing debt to the many FCI businesses that the body represents and whch provide essential farm machinery services to more than 80% of all Irish farmers, it said.

There is huge uncertainty around farm product prices

“Our concern now is for the future impacts on many farm and forestry contracting businesses, as there is huge uncertainty around farm product prices,” said FCI chair Richard White.

“This will have significant consequences for payments for farm and forestry contracting services during 2020.

“It has been for this reason and against this ever-changing financial background that FCI has requested the Minister for Finance and Public Reform Paschal Donohoe to postpone the planned introduction of the proposed carbon tax increase of €6/t on all green diesel used for agriculture, which is due to be introduced on 1 May 2020,” he said.

Silage season

Due to the many unknown aspects of this COVID-19 crisis, some of the current restrictions will extend into the grass silage harvesting season, FCI has warned.

“The cashflow requirements of the silage harvest are enormous given the fact that a modern harvesting team will have a diesel fuel requirement of in excess of 3,000 litres per day.

“FCI has told Minister Donohoe that it is concerned about the longer term impacts of this new cashflow challenge on the farm contracting sector if farm product prices experience an ongoing reduction,” it said.


FCI claims that the €6/t increase from 1 May converts to an increase of €15 per 1,000 litres or 1.5c/litre extra, plus VAT, based on figures more recently supplied to it by the Revenue Commissioners.

For a typical contractor, whose fleet of modern and fuel-efficient machines consume in the region of 150,000 litres of agricultural diesel per year, this will raise the cost of agricultural fuel bill by at least €2,250.

Nationally, FCI contractors use in excess of 340m litres of green diesel each year.

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