Farm contractors face credit crisis
Diesel costs increase 44pc as distributors tighten credit lines
SOARING green diesel prices are forcing some contractors to turn to farmers to fund the cost of fuel for their silage harvest.
The cost of green diesel is 44pc higher than last year, although the base price for crude oil is unchanged.
Distributors have also tightened up on the discounts being applied to farmers, the IFA has claimed.
In addition, credit terms to contractors have been tightened by oil distributors and some contractors are no longer able to carry the burden of diesel costs and are requesting farmers to supply the fuel.
"Some of the contractors are now asking the farmers to supply the diesel for silage cutting because they cannot afford to fund it," said Tom Murphy of the Professional Agricultural Contractors of Ireland (PAC).
"The distributors have also tightened on credit to our members this year and they are now under pressure for finance from all sides and cannot get oil on credit."
The cost of commercial [white] diesel is 17.7pc up on last year, but farmers are paying 30pc more for agricultural diesel, although the only difference in the product is the addition of a dye for excise purposes.
And the total increase in the farm gate price of green diesel comes to 44pc when the National Oil Reserve levy and Government Carbon Tax are added to the oil companies' price.