Agricultural diesel tax increase
Deputy McGrath objected to the planned increase in agricultural diesel costs, saying farm contractors cannot absorb the extra burden. The Minister said contractors are important, but the Government has no plan to change the carbon tax or make budget adjustments.
The Minister present is the Minister for agriculture. We are talking all the time about the crisis in agriculture due to the weather. The Association of Farm and Forestry Contractors of Ireland has been appealing to the Minister and the Minister for Finance not to go ahead with an increase of 2 cent per litre, plus VAT, on agricultural diesel on 1 May, which is next week. The estimated cost to the farm contractors is €10 million. The association added that it will not be possible to pass on the increase to farmers because, as we know, they are struggling already. It brings into question the future viability of agricultural contractors and raises the issue of whether farmers will have enough fodder next winter. There is a ripple effect all the way along. We are rubbing our hands saying we will do something for farmers, yet we are imposing a carbon tax on 1 May, in addition to removing the rebates. This is putting the whole industry, including the farm and forestry contractors, in jeopardy because they will be unable to provide the services given the extra costs, which will result in a shortage of fodder next winter.
Comment on this
I attended the annual conference of the Association of Farm and Forestry Contractors of Ireland a couple of months ago. The contractors comprise an important part of our farming infrastructure and are under considerable pressure given the amount of work ahead – work that was not possible to do in recent weeks.
Generally, farm businesses are exempt from the carbon tax. There is a rebate system in place. Farm and forestry contractors are not exempt and the carbon tax does apply to them. The Government has no plans to adjust the tax or make any budgetary adjustments in this regard but it is certainly working hard to support the farming community and the sector.