The increase in fuel prices as a result of the conflict in the Middle East has resulted in substantial rise in costs for agricultural contractors.

The spike in cost of green diesel is set to add to farmer bills for contracting services as silage season approaches.

The Association of Farm and Forestry Contractors in Ireland (FCI), as well as the Irish Farmers' Association (IFA) has been engaging with the government on the rising green diesel costs.

The IFA has already published a set of potential proposals for offsetting the costs. Now the FCI has published its own set of requests from government.

It is understood that these proposals were submitted to the Department of Finance at a meeting last week.

The FCI has made eight specific proposals.

Introduction of 'targeted' agri diesel rebate

The FCI said that current green diesel prices - around €1.50/L before VAT - are rendering contracting operations economically unviable, with sustainability thresholds lying between 88c/L and €1.02/L.

According to the group, a reduction of 50c/L is required to restore viability and maintain essential services, which should be provided in the form of a temporary energy support scheme for agricultural contractors.

Suspension of Carbon Tax

The FCI wants to see a temporary suspension of the Carbon Tax on green diesel for the duration of the "fuel crisis".

The organisation also wants to see the Carbon Tax component of diesel cost to be clearly identified and stated as a separate line item on all supplier invoices.

Cap on price of green diesel

The FCI is calling for a temporary price cap on green diesel to protect against further volatility.

Ringfencing fuel supply for agricultural use

The organisation wants to see agricultural diesel prioritised and ringfenced for essential farming activity in the event of supply disruptions.

In this case, access should be restricted to FCI-registered agricultural contractors to ensure continuity of operations, the group said.

Classification as essential service

According to the FCI, agricultural contracting should be recognised and included in official lists of emergency essential services.

The group said that agricultural contractors "play a critical role" in ensuring the continuity of food production, particularly during peak seasonal periods such as planting, harvesting, and silage operations.

"Any disruption to these services during emergency situations can have significant and lasting impacts on agricultural output and food security," the organisation argued.

Provision of emergency capital supports

The FCI is calling for fast-tracked access to low-interest loans for agricultural contractors, with government guarantees to address eligibility barriers, particularly for contractors without land assets.

The group warned that the sector is already heavily financed to keep pace with advancing environmentally sustainable technologies, and is no longer in a position to extend credit to farmers.

Addressing input costs

The organisation has called for temporary cost-offset supports for other input costs that are also seeing inflation, including lubricants, parts and servicing.

Introduction of tax warehousing

Finally, the FCI has called for farmers to be allowed to 'warehouse' tax liabilities so that funds can be redirected to pay for essential contracting services.

The group said that it was aware of cases of farmers choosing between using funds set aside for tax to pay for silage services, or retaining the set aside funds to meet the tax obligations.

Meeting with Department of Finance

The FCI said it is due to meet with the Department of Finance again next week "for an update on these issues".

Ann Gleeson Hanrahan, the FCI's managing director, commented: "Protecting agricultural contractor and farm viability is essential not only for maintaining current output, but also for safeguarding long-term food security, rural employment, and the resilience of local economies."