Machinery contractors demand a U-turn on fuel tax hike
Farm contractors are threatening to take tractors onto the streets to protest over the imposition of higher carbon taxes on green diesel.
They have also warned of a 5pc hike in contractor charges next year as a result of the carbon tax hike.
Under plans announced in the Budget the carbon tax on green diesel will increase by €6/t from May 2020. This will add around 2c/litre to green diesel prices.
The Association of Farm and Forestry Contractors in Ireland (FCI) has written to the Minister for Finance, Paschal Donohoe, and the Minister for Agriculture, Michael Creed, seeking clarity following confusion on the issue of carbon taxes on green diesel.
Following Budget 2020 the FCI released a statement welcoming the fact that contractors would be able to get a rebate on the carbon tax when using green diesel.
However, it later emerged this was not the case, with the contractor body blaming Minister Creed for the confusion.
FCI chairman, Richard White, said contractors could not absorb the additional charges which the carbon tax will impose.
“Contractors should be allowed a similar annual carbon tax deduction/rebate as that available to farmers,” Mr White said.
The introduction of the carbon tax just as the silage harvest kicks off next May is a further source of contractor anger, he added.
FCI pointed out that the silage harvest accounts for consumption of around 214 million litres of green diesel, with total annual consumption by farm contractors exceeding 350m litres.
The hike in the carbon tax of 2c/l will cost the farm sector around €4.3m for the silage harvest alone, and close to €7m for the entire year.
“Next May is the month when the Government propose to enforce this penal stealth carbon tax on Irish farming. The timing could not be less appropriate,” Mr White said.
Alternative fuels
“Irish farm contractors do not have the option of using alternative fuels. Hybrid or LPG as alternative fuel options are not currently available to power modern agricultural machines,” he explained.
“Farm contractors are now so outraged by this further increase in fuel costs, coupled with the ongoing inequity of not being allowed to avail of a carbon tax rebate, that they will be forced to increase all contractor charges to Irish farmers for 2020 by 5pc,” he added.
Given that the annual turnover in the Irish farm contractor sector is in the region of €700m, the FCI estimates that a 5pc increase in contractor charges will cost farmers €35m.
Eamon Holohan, Errill, Co Laois with JD on board Eamon’s 1993 Belarus at the Errill 6th Annual Charity Tractor Run. This year the event raised funds for the Irish Kidney Association and the Cuisle Cancer Support Centre.
PHOTO: ALF HARVEY
A backlog on the cull cow kill could keep a ceiling on beef prices as the latest figures show that 40,000 fewer cows have been killed so far this year.
The cow kill is currently running some 12pc behind 2018 levels, with quotes ranging from €3/kg for Rs to €2.60/kg for P+3s. O grades are on €2.70-2.80/kg.
Reports from agents and those with stock to sell suggest that factories are backing up cull cows in the system as they concentrate on prime stock.
Fears are being expressed that if numbers of heifers and bullocks ease, the backlog in cull cows will be released, thereby preventing a lift in bullock and heifer prices.
It is also understood that processors are also ramping up pressure on suppliers in relation to weights, with reports that some agents have been told to put back heavy bullocks even if they are in spec.
While weight limits here generally begin around the 420kg mark, in Northern Ireland and Scotland some plants are now cutting at 380kgs.
Meanwhile, prices for bullocks remain firmly stuck on €3.45-3.50/kg, with heifers €3.55-3.60/kg.
It comes as official figures from the CSO revealed the full impact of the beef protests in September with the number of cattle slaughtered back 40pc when compared to September 2018.