The Association of Farm and Forestry Contractors in Ireland (FCI) has expressed total disappointment at this week’s budget.

Budget 2023 has done “little or nothing” to support the viability of the farm and forestry contractor sector in Ireland, the association said.

It said the carbon tax proposals in Budget 2023 will mean a further burden to the sector where the value of the reduction in the National Oil Reserves Agency (NORA) levy from 2% to 0% will be insignificant against the background where the current excise duty reduction on green diesel will be removed in February 2023, followed by a further increase in carbon tax in May 2023.

This will add more than 12c/l to green diesel costs by then, it argued.

Actions 'have not been acknowledged'

The organisation said its members have embraced climate and biodiversity action through their investments in more fuel-efficient machinery, use of better operating systems through guidance technology and increased use of the diesel fuel additive AdBlue to lower harmful engine emissions. These actions too have not been acknowledged, it said.

FCI chair and Kilkenny-based contractor John Hughes said: “Farm and forestry contractors were excluded from any compensation for the significant increases in their energy costs.

"Green diesel costs have increased by 100% since the autumn of 2021 and there is no acknowledgement of how contractors have continued to deliver services worth more than €800m annually to farming with minimal support other than a small and temporary reduction in excise duty and the NORA levy.”

Reduction in VAT

The FCI request for a reduction in VAT was not included in Budget 2023, while newspapers received a €39m indirect Government funding by reducing VAT in the sector from 9% to 0%.

The FCI had estimated that the cost of allowing farmers to have a full VAT refund on all contractor services, at a time of huge challenges for the sector, would be a more meaningful support for the farming sector, putting in the region of €90m money directly back into farm family accounts.

There is no recognition of the actual day-to-day activities taking place on Irish farms

Hughes said it is clear that the ministers at the Department of Agriculture and the Department of Finance do not understand or acknowledge the role and the value of the farm and forestry contractor sector in Irish agriculture.

“There is no recognition of the actual day-to-day activities taking place on Irish farms and of the vital role that contractors play in delivering valuable services that have resulted in achieving increasing levels of output in a sustainable way on thousands of Irish farms,” Hughes added.

€8m liming scheme

The association has welcomed the new €8m liming scheme, as most of the lime spreading in Ireland is carried out by contractors.

Budget 2023 proposed a €500m Growth and Sustainability Loan Scheme (GSLS) to facilitate strategic investment by farmers, fishers and food businesses to ensure their continued viability and sustainability into the future. The FCI said it will encourage all contractors to seek access to the GSLS scheme for machinery investment.

The 12% increase in the forestry budget to €112m to fund the new national forestry programme due to be unveiled later in the autumn was welcomed by FCI. The organisation said it supports all initiatives to increase the national area under forestry.

The FCI welcomed the €10m in support to encourage maintenance and new planting in the tillage sector under the Tillage Incentive Scheme.

However, the organisation said it was seeking clarification from the Department that farm contractors will be eligible for the support so that they are not further discriminated against in terms of machinery investment where their skills and experience are vital to the sector.

The FCI also welcomed the increased resources for farm safety including a dedicated budget of €2.5m.