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Farmers face rise in contractor charges

Farmers face a hike in contracting charges as prices are set to increase by 10pc.

A survey of over 40 contractors has revealed that many are planning to increase their charges significantly in 2013. High diesel prices and a squeeze on credit are all being blamed for the latest increase.

With diesel costing 94c/l, power intensive jobs such as ploughing and silage will be hardest hit.

Martin Murphy, from Tydavnet, Co Cavan, said that higher diesel prices are "going to cripple contractors and end up forcing them out of business."

Peter Farrelly, Federated Contractors of Ireland (FCI) secretary said that the Minister for Finance, Michael Noonan, had ignored repeated pleas to reduce prices for contractors.

"It makes no sense that the contractor cannot claim back carbon tax, but hauliers, bus companies and farmers can," he said.

Tom Murphy, director of Professional Agricultural Contractors (PAC) said that diesel accounts for 20pc of the prices being charged.

"Contractors find it difficult to pass on these additional charges to their customers, but we recommend that our members pass on a surcharge when fuel prices are high," he said.

Mr Murphy also highlighted the black market as a major problem, especially in border counties.

"The black economy is able to undermine contractors because they often have no insurance and negligible machinery costs," he said.

"Credit is another issue. Contractors extend much longer periods of credit to their customers. Very often, they will be expected to carry debts over from one season to the next, whereas most other industries expect to be paid within 30 days."

Ploughing looks likely to be hardest hit with a national average of €36/ac, but some contractors quoting up to €55/ac. All quotes were VAT exclusive.

Silage-making quotes are also set to jump, with early indications that the average cost of pit silage will top €115/ac.

However, with prices varying by as much as 30pc, farmers should shop around.

The survey shows that the cheapest quotes were typically found in the border counties, but the most expensive regions for getting work done appear to be concentrated in the west.

Farmers can expect to pay in the region of €44/hour for slurry spreading based on a 2,500 gallon spread-plate tanker, with the cheapest quote of €28 per hour in Donegal.

Cork was the best value county in Munster with rates close to €40/hr, but quotes throughout the rest of the province were closer to €50/hour.

Increased numbers of contractors are starting to spread slurry using the umbilical system, with a price range of €110-130/hr.

The cost of lime spreading varied by more than 40pc nationally. It is highest in Kerry, Mayo, Wicklow and Kildare at €6/t, with farmers in Donegal expecting to pay between €3.50-€4/t.

Average one-pass sowing costs hover around €31/ac. However, costs vary considerably, with quotes of €35/ac in Meath, Westmeath and Tipperary, while €26-€28/ac is the norm in Laois, Wexford and Carlow.

Irish Independent