Carol Nolan Demands Action on Farming Contractors' Fuel Crisis

Minister, I want to ask you what measures you will take in order to address the unprecedented and significant input costs that our agricultural contractors are facing. I also want to stress that the Association of Farm and Forestry Contractors of Ireland have highlighted that they are very concerned for their viability. They have highlighted that the sector is under increased pressure and that also huge fuel costs, in addition to the supply issues, are making it impossible for them at present. It has actually gone into a crisis. So what measures are you currently taking to support this sector and what possible measures could also be taken by government? Minister Conlover. Thanks, Cairla, and thanks, Deputy Nolan, for posing this question. In the context of the Ukrainian crisis, significant implications are being seen across all sectors, as we know, including the agri-food sector. And as well as the immediate humanitarian crisis that we're all facing and that must take priority, we do need to take the necessary steps to ensure that food security is maintained throughout the time as well in the period ahead. The impact of the illegal war in Ukraine is having on our farm families as the number one priority for me and for the Department. At the Department and at the farm level, the crisis has been impacting significantly on the price of fertiliser, animal feed and fuel. Within the Department, I've established, Deputy, a rapid response team to actively monitor the impacts on the agri-food supply chain and to contribute to the whole of government response as well. I've also established the National Fodder and Food Security Committee, headed by Chugusk and Frank O'Mara and chaired by Mike McGann, and tasked it to prepare an industry response and to develop contingency plans and advice to assist farmers in managing farms and enterprises, their farm enterprises, over these months. I've announced, as you know, a number of measures over the past three months to assist the agriculture sector, and I'm currently considering and will continue to monitor what additional measures may be necessary. One of the main inputs for cost or for contractors is fuel, which of course has been subject to very significant price rises in recent months. While primary responsibility for taxation of fuel is with the Minister of Finance, I continue to work closely with them to ensure that the tax code reflects the government's priorities for the agri-food sector, and indeed, I'm working closely with Minister Hayden in relation to advocating in relation to that as well. Ireland's taxation of fuel is governed by European Union law, as set out in the Energy Tax Directive and the Finance Act 1999, and provides for the application of excise duty in the form of mineral oil tax. As the Deputy will be aware, gas oil qualifies for a reduced rate of mineral oil tax for marked green diesel, and it is usually referred to as marked gas oil, or green agricultural diesel. Minister, I thank you for your response. But the Ukrainian crisis isn't responsible for the introduction of carbon tax that has crippled agricultural contractors, and actually pushed many of them out, before the Ukrainian crisis ever erupted. So, I mean, this government either blames a crisis or they're blaming the EU, but you need to take responsibility and take clear measures that will support this sector. I want to ask you, have you actually met these contractors who are in deep crisis? Have you met the farm and the forestry contractors? And also, Minister, I want to highlight to you that these contractors are facing more than a doubling of price of marked gas oil, known as green diesel, since January 2022. This MGO is used in the machines that provide services to thousands of farmers in every townland throughout Ireland. And indeed, FCI research has shown that during 2021, its members were being quoted an average MGO bulk delivery price of 75 cents per litre, plus fat, with slight variations throughout the year. In the past number of weeks, the quotations have risen to over double that price, now averaging €1.30 a litre, plus fat. This is the highest price for MGO ever quoted in Ireland for farm and forestry contractors. And we need action from yourselves. Yes, thanks, Deputy Nolan. And listen, there's been very intensive engagement between my own team and the contractors on the issues that are facing them. Indeed, I'm meeting them very shortly to further discuss the challenges that are there. As you know, the challenge around green diesel, because of the fact that it is, that excise duty is much lower on it, the capacity to make changes to that excise duty is therefore limited. So while we would have made significant cuts to standard diesel and standard petrol in response to the fuel crisis, the fuel challenges there, we also reduced the agricultural diesel by a total of 5 cents, 2 cents first of all, and then 3 cents subsequently. But that represents, while it's small in relation to the impact it makes to the farmers and contractors, it represents the majority of actually the excise on it being actually removed. The other steps we've taken, and which is important for the year ahead, because a big contracting expense on farms is silage, and I've introduced the 1,000 euro support to farmers as well to help cover the costs, because obviously there's increased costs involved in terms of contracting prices as well, and that's a significant measure which I certainly hope will help in that regard, Deputy Nolan. Minister, you made reference there to limited capacity to reduce the excise duty on agricultural diesel, but that suggests to me that you could have gone further than what you did 2 cents on it, that you could have gone further. So I'm asking you to go further and make sure that you take measures that will assist this sector, which as I said is in deep crisis. In addition, Minister, I'd also ask that the following be considered. The contractors, the FCI, are requesting that the farm and forestry fuel sector fuel supply requirements are prioritised in terms of what their demands are, they need supply, and these need to be prioritised as essential in the event of any national fuel shortages. It fears that the national silage harvest could be compromised, leading to a fodder shortage in winter 2022 and spring 2023. They've also asked that the Irish government immediately remove the carbon tax from MGO, used in agriculture and forestry by farm and forestry contractors for a period of five years, in order to reduce costs and allow adequate time for the international machine development and supply sector to provide alternatives to internal combustion engines. So I just ask you to consider those measures, please. Thanks, Deputy Nolan. So listen, obviously we've been monitoring the situation closely and the challenges that are there that are facing the farming community. That's why I came forward with the tillage scheme, providing 400 euro a hectare for each additional hectare of cereal that's grown this year. It's also why I've come forward with the 1,000 euro payment to farmers to help with the cost of making silage. One of the key costs involved in that, alongside fertiliser, is contractor costs, which obviously are increased because of the challenges that are there. So that certainly should help in relation to farmers and contractors with those bills. It won't cover them all. In relation to the removal of excise on green diesel, so there isn't any more room to change that. We have now removed it all in relation to agricultural green diesel. So the first two-cent move reduced it by 40% to take from the national exchequer. Obviously that's small in relation to what it means for farmers, but it was 40% of the total. We then proceeded to remove it all. So there's now no excise duty on green diesel for the foreseeable future as a step to actually support the sector as well. So listen, we're conscious of the pressures that are there and we're working closely with the sector and we'll continue to monitor as well, Deputy Nolan. We now move to... We now move to...