A lower rate of fuel tax for red diesel must continue if farming businesses are to remain competitive, according to the Ulster Farmers’ Union (UFU) deputy president Victor Chestnutt.

Ahead of the UK’s upcoming budget, he said farming unions had been assured by successive governments that red diesel exemptions would remain, warning that this is essential to “precarious” farm incomes.

Competitive disadvantage

“The last thing they [farmers] need would be any moves by government that would drive up costs,” he said.

He also mentioned that such a move would be unfair and leave farmers at a competitive disadvantage to other countries, on top of falling incomes, weather problems and constant pressure on farmgate prices.

“The UK already imposes one of the higher fuel duty rates in the EU. Eliminating the red diesel tax rebate would increase costs by almost 50 pence a litre. Unlike those who can reduce fuel costs by buying smaller cars, that is not an option for farm machinery.”

He labelled the potential move as a “straight attack” on already weak or non-existent profitability.

"Overnight, it would make farmers less competitive against their counterparts in the EU or even the US and Canada, where all governments rebate farm fuel taxes,” said Chestnutt.

Read more

Parties tip-toe around CAP top up

The EU Commission needs to ‘get real’ on CAP - IFA

Origin Enterprises racks up €7.2m in half-year losses