Contractors Stung by €30,000 Weekly Fuel Costs, Says FCI

"Agricultural Contractors in Ireland Brace for €30,000 Weekly Fuel Bills as Silage Season Approaches, FCI Warns"

The Association of Farm and Forestry Contractors in Ireland (FCI) has raised concerns over the financial strain facing agricultural contractors as they gear up for the upcoming silage season. According to Michael Moroney, the research director at FCI, contractors are bracing themselves for fuel bills reaching around €30,000 per week once the silage operations kick into high gear. This worrying projection comes amidst a backdrop where FCI members are grappling with a significant reduction in workload compared to usual for this time of the year, leading to severe cash flow challenges for many contractors.

Moroney conveyed these apprehensions to the National Fodder and Food Security Committee (NFFSC) on Tuesday, April 9, underscoring the pressing need for support within the industry. He emphasized that the current situation could potentially hinder contractors’ ability to sustain their operations, as the financial burden of fuel costs looms large on the horizon. The advice from Teagasc to farmers to aim for the third week of May for the first cut of silage adds further urgency to the financial predicament faced by contractors.

The specter of mounting fuel expenses has prompted fears that some contractors may find themselves unable to afford the necessary resources to carry out their work effectively. Moroney cautioned that the financial strain could reach a breaking point for many contractors, jeopardizing their capacity to provide essential services to farmers. Additionally, he highlighted the potential challenges posed by impatient farmers eager to commence fieldwork once weather conditions improve, urging stakeholders to exercise patience and understanding towards contractors.

In a bid to address the pressing financial concerns within the sector, the FCI has reached out to Minister for Agriculture, Food, and the Marine, Charlie McConalogue, advocating for a tailored finance program to alleviate cash flow pressures faced by contractors. Moroney stressed the importance of establishing a Strategic Banking Corporation of Ireland (SBCI) initiative specifically designed to facilitate payments from farmers to contractors, alongside securing working capital funding through pillar banks. The absence of adequate working capital, compounded by the substantial loss of work opportunities, poses a significant threat to the sustainability of contractor services.

Recent data from Teagasc for the year 2022 illustrates that farmers typically spend upwards of €7,000 per farm on contractor services, underscoring the critical role that contractors play in agricultural operations. In light of the unprecedented challenges confronting the industry, the FCI has called for the development of a compensation scheme for contractors based on their work output compared to the previous year. Moroney emphasized the gravity of the situation, highlighting the existential threat faced by many contractors as they navigate the treacherous terrain of financial instability.

The plea for financial support echoes throughout the agricultural contracting community, as contractors grapple with the stark reality of dwindling work opportunities and mounting financial pressures. The survival of many within the industry hangs in the balance, with cash flow and funding emerging as paramount concerns. As the sector braces for the impending demands of the silage season, the call for targeted financial interventions to bolster contractor viability grows louder, underscoring the urgent need for collaborative efforts to safeguard the future of agricultural contracting in Ireland.

Matt Lyons

Matt Lyons

Matt Lyons is the founder of Forestry & Carbon. Matt has over 25 years as a forestry consultant and is invoilved in numerous carbon credit offset projects.

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