Govt Action Needed to Offset Spikes in Fuel & Fertiliser Prices

IFA President Francie Gorman has written to the Tánaiste and Minister for Finance Simon Harris to set out the very serious impact that the Middle East conflict is having on farmers and to seek meaningful measures to address the crisis. 

Green diesel has increased by over 50% since the war with Iran began. “Apart from the extra direct cost for farmers, farm contractors who do a lot of work on farms are experiencing significant cost increases,” he said 

“Ahead of the Government announcement on Tuesday, we have written to the Minister for Finance requesting that he suspends the carbon tax on marked Gas Oil (Green Diesel and Kerosene). Government tax on green diesel is circa 22 cents per litre, of which 17c is carbon tax.”

“The only way the Government can make a significant difference to taxation on green diesel is to address carbon tax. There is no alternative fuel source for agricultural vehicles, so the tax cannot achieve its objective,” he said. 

“We are repeating our proposal for a suspension of carbon tax to lessen the impact of the war and to show support to farmers and farm contractors,” he said.

“Some politicians seem to see the carbon tax as some sort of sacred cow. However, the reality is that we have record tax receipts in the Exchequer and these should be used to fund the spending currently being funded by carbon tax,” he said. 

Francie Gorman said fertiliser prices are also surging for those who have not bought supplies. The conflict will add hugely to their costs. At EU level, the option exists to suspend the Carbon Border Adjustment Mechanism (CBAM) and this would help to mitigate price increases.

“The EU fertiliser market has been disrupted as a sizeable amount of global fertiliser travels through the Strait of Hormuz. It’s imperative that our Minister for Agriculture pushes the EU Commission for the immediate suspension of CBAM tariffs on fertiliser,” he said.

“The reality is that there will be significant increases in food prices to address these cost hikes unless the Government does something meaningful to mitigate the situation,” he said.