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Catherina Cunnanehttps://www.thatsfarming.com/
Catherina Cunnane hails from a fifth-generation drystock and specialised pedigree suckler enterprise in Co. Mayo. She currently holds the positions of editor and general manager at That's Farming, having joined the company in 2015.
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Changes to Green Diesel tax rate to push contractors’ costs up by €170m

“Adding more than 50c/L to the current high green diesel prices, which have already increased by over 55% since 2020, will further increase the carbon tax component of the diesel price.”

“This will push the diesel cost to Irish farm and forestry contractors up by more than €170 million annually.”

Green diesel prices

That is according to John Hughes, FCI national chair, who has hit out at the Tax Strategy Group’s green diesel proposals.

The group has called on the Department of Finance and the Government’s Tax Strategy Group to conduct a financial and technical assessment of the actual costs to Irish farming’s competitiveness of removing the excise duty differential between green diesel used in agriculture and white diesel used in the transport sector.

The association’s research shows that the farm and forestry contracting sector consumes upwards of 340 million litres of diesel annually.

Hughes pointed out that this is close to 62% of all diesel fuel consumed in Irish agriculture.

He stressed that contractors have no alternative power sources to the diesel engine to power their machines.

“They will be forced to pass any significant fuel cost increases on to their farming clients in the form of substantial increases in contractor charges in 2022.”

No alternative to diesel-powered tractors 

“There is simply no commercially available alternative to diesel-powered tractors and harvesters to achieve the government’s objective of de-carbonising the Irish economy.”

Hughes described FCI members as “environmentally ambitious”. He pointed out they have made “significant” financial investments in new machinery. He said they are utilising additional costing AdBlue technology to lower emissions from available diesel engine technology.

“There is no other non-diesel engine alternative commercially available in Ireland or indeed across the world.”

“Now is not the time for this government to use fuel taxation strategies to force farm & forestry contractors and their farming clients into a corner where there is simply no way out,” he added.

He warned the Irish farming and food industry, and the Irish economy will be the loser, as will the national balance of payments if the island is unable to produce food in a world competitive way sustainably.

Role 

The FCI National Chair believes that it is now time for clear acknowledgement of the role of farm & forestry contractors.

In practical and measurable terms, the 1,000 farm & forestry contractors now listed on the FCI database each work across an average of three Irish farms per day.

This amounts to:

  • 3,000 farmer and farm contractor interactions each day;
  • 18,000 farmer and farm contractor interactions each week of the working season.
  • Working year of an average of 30 weeks of direct farm mechanisation work: Over 500,000 farmer and farm & forestry contractor interactions each year, across 139,600 Irish farm holdings.

Furthermore, he said FCI members contribute to Ireland’s economic, environmental, and social fabric in rural areas.

“Without farm & forestry contractors, the agri-food system would simply not exist.”

“Fuel taxation strategies need to take this into account as over 80% of Irish farmers depend on farm & forestry contractor services to achieve their production targets,” he concluded.

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