The Association of Farm and Forestry Contractors in Ireland (FCI) has welcomed the proposed €100/ha silage-making grant announced by the Minister for Agriculture, Food and the Marine, Charlie McConalogue.

It is aimed at helping farmers to cope with the increased silage contracting costs during the harvest of 2022 and will be brought before the Cabinet this evening (Tuesday, May 3) for approval.

The FCIS said: “Focusing this grant aid on silage-making will ensure that farm contractors who provide a silage harvesting service can be paid the necessary fuel surcharges to maintain their operations, which are proving essential to modern Irish farming.

While the association said that it is concerned about the late announcement of the grant, the total amount of the grant at €55 million now mirrors what it claims is almost exactly the increased fuel costs for farm and forestry contractors this year, compared with the 2021 costs.

Silage contracting costs

FCI said that it believes that the silage grant should be focused on meeting the additional contractor costs, where contractors can provide invoices as records of where silage crops are harvested.

John Hughes, chair of FCI said: “The announcement of this proposed grant is a clear acknowledgement of the need to financially support farmers to help them to pay their silage contractors for the significantly increased costs, just one of which is fuel, now being incurred as we prepare for the 2022 national silage harvest.

“The proposed €100/ha silage grant will help farmers in some way to pay their silage contractor a fair fuel surcharge for the increased costs now being incurred primarily, not exclusively, due diesel cost increases.

“There are also other significant cost increases such as machinery parts, lubrication oils and the purchase of new tractors and machines that have pushed up contractor charges in 2022,” he added.

“The cost of the exorbitant agricultural diesel price increases during 2022 can now in some way be defrayed by the proposed government aid mechanism in the form of the silage grant, to allow farmers to meet the additional silage contractor charges for 2022.”

The FCI chair added that this can also support the viability of many grass contracting businesses that were facing huge and unsustainable cost increases for their services to farming this year.

Carbon tax

The FCI said that this harvesting grant has come at a time when farm and forestry contractors were “burdened with an additional 2c/L of fuel carbon tax cost at the start of this month, pushing diesel costs even higher”.

“At FCI we are still campaigning for equity in terms of the carbon tax double deduction under the 2012 Finance Act, which would allow farm and forestry contractors the opportunity to reclaim the carbon tax portion of their agri-diesel costs, as a tax credit, in the same [way] that farmers can benefit from carbon tax relief,” Hughes continued.

“We recognise the clear, but belated, understanding by the Department of Agriculture, Food and the Marine [DAFM] and Teagasc, as well as the farm organisations, of the huge cost increases incurred by silage contractors for 2022 and why the role of the farm and forestry contractor must be supported.”

The association has said that the national priority is now to ensure that Ireland has the largest silage harvest on record.

“That will demand a concerted effort, led primarily by silage contractors who will provide the skills, machines and energy to meet this national challenge,” Hughes stated.

“We appreciate that this silage grant will go some way in providing the financial support farmers need to ensure that they can pay their silage contractor a fair price and on time, for the work done, as we all plan to work together to avert a fodder crisis for the winter of 2022.

“We now urge the Department of Agriculture, Food and the Marine, to put a meaningful strategy in place that recognises the essential role of the silage contractor in this proposed grant aid programme,” he concluded.