Contractors to 'pass on costs'
Agricultural contractors say they will pass the cost of carbon tax on tractor diesel on to farmers next year.
Contractor charges are set to increase by at least 12pc this year, the Professional Agricultural Contractors (PAC) has warned. The rise is due to a combination of higher fuel and repair costs, and tighter credit facilities.
The price of tractor diesel rose by €46.87 per 1,000 litres, or 8.7pc, as a result of the Government's carbon tax announced in the Budget.
The tax is expected to generate an additional €330m in revenue for the exchequer in a full year.
The IFA has vowed to seek an exemption from the carbon tax for farmers on the grounds that there is no alternative fuel to use.
It is understood French farmers argued successfully for a rebate on their carbon tax on tractor diesel.
"The carbon tax will further increase farm production costs by €13m in a full year. This must be addressed," said IFA president Padraig Walshe.
But PAC director Tom Murphy said: "Contractors have seen their profit margins eroded to such an extent they have no choice but to increase charges."