The Fuel Income Support Scheme has "failed to recognise" periods of heaviest fuel usage, the Irish Creamery Milk Suppliers' Association (ICMSA) has said.
Minister for Agriculture, Food and the Marine, Martin Heydon announced this week that payments have commenced under the scheme.
According to the Department of Agriculture, Food and the Marine, it is expected that the total final payments under this scheme will be approximately €27 million.
The scheme was designed to support applicants for the five-month period from March to July 2026.
ICMSA president, Denis Drennan said: "The case ICMSA is making is that the fuel scheme is flat and based on 5/12ths of total fuel usage for the year.
"But the reality is that diesel usage on farms is much higher during the March to July period and that should have been weighted along the lines of, say, 8/12ths of the total annual usage to reflect the much heavier outlay usage and much heavier financial outlay during this period.
“Fuel usage is always considerably higher from March to July, particularly with silage, slurry spreading and other essential farm activities going on.
"We just think that this hasn’t been recognised and that, essentially, lower fuel usage during the shoulder months of the year is artificially pushing down the average figure for the March to July period."
Calling for a review of the decision, Drennan also cautioned that the €58 million remaining from the scheme must be retained within the farming sector and paid to farmers.
"With the average farmer set to receive approximately €600, that money will be eaten up straight away," the ICMSA president said.
"It is akin to a sprinkle of rain falling on my fields at the moment - it won’t make any substantial difference either way.
"There’s a drought on farms, and there’s a drought in farmers’ bank accounts."
Drennan said for all farmers, fuel costs are a massive issue.
He said the support, while appreciated, is "only putting a plaster on a wound that requires major surgery".
"We desperately need meaningful measures that address the underlying costs of farming and ensure that farm families can continue to operate viable businesses into the future," Drennan said.
The ICMSA president added that the scheme design was a model of "straightforward clarity" and the Department of Agriculture should "certainly emulate that model where possible across their whole range of schemes".
"The scheme design was clear and good, but the amount is nowhere near sufficient, and the method of calculation was slipshod and incorrect," Drennan added.