IFA Farm Business Chair Bill O’Keeffe has warned that the EU’s Carbon Border Adjustment Mechanism (CBAM), imposed since the start of the year on imported nitrogen fertilisers from outside the EU, will have a severe negative impact on Irish farmers and food production.
Since 1st January this year, certain goods imported into the EU are required to pay a tax (CBAM) based on the greenhouse gas emissions associated with the manufacture of these products. Fertiliser, along with iron, steel, aluminium, cement and electricity are all impacted, but it is fertiliser costs that will have a severe negative effect on agriculture and food production across the EU and Ireland in particular.
“This EU taxation of a key agriculture input, especially for a grass-based country like Ireland, risks driving fertiliser prices significantly higher at a time when farm incomes are already under significant pressure,” Bill O’Keeffe said.
“Fertiliser is a critical input for farming in Ireland. The imposition of CBAM on non-EU nitrogen fertiliser imports has already increased the cost of all fertilisers for Irish farmers significantly and will continue to add additional costs year on year if the EU fail to understand the impact on farmers’ incomes and EU food production,” he said.
“The IFA are completely opposed to the imposition of CBAM on fertiliser, a tax that will ultimately be borne by farmers.”
“We are ultimately price takers in the food production model and there will be no opportunity to pass back this significant additional production cost. Irish food exports must compete on a global market with other food producing countries outside the EU who will not have this taxation imposed on their food production systems,” he added.
“The EU Commission must wake up and see that this policy will undermine the food production mode within the EU. A secure food production model within the EU is one of the underlying core principles that the EU is based on. We cannot allow our EU policy makers to forget this fact.”
The development and scaling up of the indigenous EU fertiliser industry is the right thing to do and IFA fully support the EU in assisting this sector to grow, but it cannot be funded by artificially increasing the price of fertiliser to farmers.
“Higher fertiliser costs will inevitably lead to reduced usage, lower crop yields and a contraction in output across both the tillage and livestock sectors,” Bill O’Keeffe added.
“This will be a direct hit on EU food production levels. The Minster for Agriculture Food and the Marine, Martin Heydon needs to do all he can to implement an immediate suspension of CBAM on nitrogen fertiliser across the EU.”
“At home, the Minister also needs to deliver on 200% co-financing to supplement the €15m already allocated from the EU under the fertiliser support package. This is vital to alleviate some of the costs already incurred due to CBAM over the past 7 months,” the IFA Farm Business Chair concluded.
