Sinn Féin, spokesperson on Agriculture Matt Carthy TD has said that the government’s “limited action” on agri-diesel costs will be undone just seven weeks after it was introduced. He shares his views.
In a move widely derided as insufficient, the government reduced excise on agri-diesel from €138.17 to €120.55 per 1,000 litres, or 2c per litre, from March 10th.
However, the carbon tax element of excise duty on the fuel is set to increase on the 1st May. This will bring the charge back to €138.17.
2c/L excise cut
The 2c per litre excise cut to agri-diesel was minimal and insufficient.
But 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 May 1st.
Minister Paschal Donohoe confirmed this at the Oireachtas Finance Committee.
He acknowledged that the excise take on agri-diesel will return to its March 9th level in May. It will then increase further to €158.50 in September when the temporary measure expires.
Government not war
These figures are not impacted by the criminal Russian invasion of Ukraine, by international factors, or by any other global influences.
This is the money that government is charging on agri-diesel that they could and should reduce.
Essentially, farmers and farm contractors have got seven weeks of a minimal fuel reduction at a time when input costs are pushing them to the brink.
Rebate for farm contractors
At the Oireachtas Finance Committee, I also sought clarification from Minister Donohoe that the review into the status of farm contractors regarding carbon tax rebates is finally underway.
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 carting out agriculture work.
Contractors have no choice but to pass on the charge to their customers. This effectively is making it an additional cost to farmers.
The Department of Finance promised a review in 2019, which the minister has repeatedly deferred.
The minister has now confirmed that it is underway, and he intends to complete the exercise before the budget.
Although when pressed, he would not commit to bringing forward measures in the budget arising from that review.
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.