Farming News - ICSA: Fuel Costs Are Pushing Farmers To The Limit
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ICSA: Fuel Costs Are Pushing Farmers To The Limit
ICSA Rural Development chair Edmond Phelan has said the escalating cost of fuel is pushing farmers to the edge, with the cost of carrying out basic farm operations becoming increasingly unsustainable. "Farmers are being squeezed from every direction and fuel is now becoming a crippling cost of producing food. Budget 2027 must deliver real action to bring down the cost of fuel and protect the viability of food production," he said.
Mr Phelan said, "Farmers cannot simply use less fuel because prices have gone up. The tractor still has to run, livestock still have to be moved, slurry still has to be spread and essential work still has to be done. But farmers cannot pass these rising costs on in the marketplace. There is a very real danger that the cost of production is becoming unsustainable for more and more farmers. Government has to recognise the seriousness of this situation and act. This is not about giving farmers a little extra help. It is about whether farmers can continue to produce food when the cost of doing the basic work of farming is becoming too high."
ICSA submitted a detailed set of fuel and cost-of-production demands to Taoiseach Micheál Martin, Tánaiste Simon Harris, Minister for Agriculture Martin Heydon and Minister for Public Expenditure Jack Chambers last week, ahead of Budget 2027.
ICSA is demanding:
1. ABOLISH CARBON TAX ON AGRICULTURAL DIESEL
The carbon-tax component of Mineral Oil Tax on agricultural diesel used for food production should be abolished. If full abolition is not delivered, ICSA is demanding an immediate reduction of at least 80%. At an absolute minimum, there must be no further increases in carbon tax on agricultural fuel while farmers face high input costs and weak margins.
2. CAP THE GOVERNMENT TAX TAKE ON FUEL
Government should introduce an overall cap on its tax take from fuel. Farmers should not face both rising fuel prices and a rising tax bill, with VAT receipts increasing as the underlying fuel price rises.
3. REDUCE VAT ON AGRICULTURAL DIESEL
The 13.5% VAT rate on agricultural diesel/marked gas oil should be reduced to provide immediate relief on an essential cost of food production.
4. INTRODUCE PERMANENT AGRICULTURAL FUEL TAX RELIEF
Government should establish a permanent and transparent tax relief for fuel used in food production, giving farmers greater certainty over production costs instead of relying on temporary measures.
5. INCREASE THE AGRICULTURAL DIESEL REBATE
The Agricultural Diesel Rebate should be urgently reviewed and substantially increased. The maximum rebate is currently 12 cent per litre but is due to fall to 7.5 cent from October 1. ICSA cannot accept a reduction in support while farmers continue to face high fuel and input costs.
6. REOPEN AND EXTEND THE FUEL INCOME SUPPORT SCHEME
The Fuel Income Support Scheme should be reopened and extended to at least March 2027 with significantly improved terms. Of the €85 million allocated, around €27 million is expected to be paid, leaving approximately €58 million unspent. ICSA is demanding that this funding stays within agriculture to support fuel and production costs, with no minimum fuel-usage threshold that excludes smaller and lower-input farmers.
7. REDUCE VAT ON KEROSENE TO 9%
VAT on kerosene used as heating oil should be reduced from 13.5% to 9%, bringing it into line with the VAT rate applying to gas and electricity and providing relief to rural households reliant on kerosene for home heating.
8. PROTECT FARMERS FROM ADDITIONAL CBAM COSTS
ICSA is demanding that Budget 2027 fully protects farmers from additional fertiliser costs arising from CBAM. Where these costs cannot be avoided, they must be fully offset for agriculture.
Mr Phelan said ICSA is also concerned about the potential for fuel availability to become an issue. "If supplies tighten, farmers must be treated as a priority for access to fuel. Food production cannot be allowed to grind to a halt because farmers cannot access or afford the fuel they need to keep their farms operating."