The Association of Farm and Forestry Contractors in Ireland (FCI) has said that agricultural contractors will be facing fuel bills in the region of €30,000/week once silage season gets underway.
Michael Moroney, research director with the FCI, told the National Fodder and Food Security Committee (NFFSC) today (Tuesday, April 9) that its members have only one third of the work they would normally have done at this time of the year.
He said this is leading to “huge cash flow restrictions” for some contractors.
Contractors
Teagasc is currently advising farmers to target the third week of May for first cut silage, where possible.
Moroney said that oil companies are concerned that contractors will not be able to afford large fuel bills when work picks up.
“In many cases, contractors may not have the funding or the working capital to allow them to provide contracting services this year,” he told the NFFSC meeting.
Moroney also said that farmers may become very impatient and anxious to get field work underway once the weather improves.
“So we’re urging department advisors, farmer organisations to show some patience and understanding and understand that the commitment of the contractor has always been to get the work done in the best possible conditions.
“We understand that machines have the capacity for high workrates, but humans will not survive exceptionally long workdays.
“Farmers need to manage their expectations now from the contractors with due consideration and considering the safety of our operators, which is our top priority,” he said.
Finance
The FCI has written to Minister for Agriculture, Food and the Marine Charlie McConalogue calling for a Strategic Banking Corporation of Ireland (SBCI) finance programme to allow cash flow from farmers to contractors.
“That needs to be specifically designed for farmers to pay their contractors.
“Then we need working capital funding from SBCI through the pillar banks to be available as well, specifically for the sector.
“Without working capital, the kind of funds that are required and the lack of cash flow because two thirds of the work has been lost, are huge impacts in terms of ability to continue to deliver services,” Moroney said.
Data from Teagasc for 2022 shows that the average spend by farmers on contractor services was over €7,000/farm.
The FCI called on the minister to develop a contractor compensation scheme based on work completed this year compared to last year.
“The industry has never had it so difficult, survival is an issue for many people. Cash flow and funding is going to be a priority,” Moroney said.