Fuel subsidy scheme for farmers to be brought to Cabinet

A 100 million-euro fuel subsidy scheme for farmers that will see payments backdated to March is to go before Cabinet on Tuesday.

Agriculture Minister Martin Heydon has said the savings from the scheme, combined with previous measures announced by the Government, will reduce green diesel by 27.4 cent per litre.

The subsidy scheme is part of the 505 million-euro package announced by the Government in the wake of fuel protests and blockades that saw fuel supplies limited across the country.

It was unveiled less than three weeks after 250 million euro (£218 million) worth of measures were announced by government responding to the fuel crisis sparked by the war in Iran.

Construction contractors, quarry truck drivers and others driving vehicles deemed essential for construction are to be added to those who qualify for the package of fuel supports, following the leaders’ meeting on Monday.

The subsidy scheme aims to assist farm contractors, farmers and fishers who have been severely impacted by the increased costs of fuel since the start of the war in Iran and the effective shutdown of vital trading route the Strait of Hormuz.

As a result, the price of marked gas oil (MGO), also known as green diesel, has almost doubled since February.

MGO cost 97 cent per litre in late February, rising to 1.70 euro per litre by late March and is now at 1.80 euro per litre.

The 100 million-euro Fuel Subsidy Support Scheme, which includes 15 million euro for fisheries and aquaculture, will see payments covering the months from March to July, which is the busiest period for fuel usage on farms.

It is understood that around 120,000 farmers and 1,500 full-time agricultural contractors will be eligible for the payments.

To use the scheme, applicants will need to apply online and the size of the payments will be based on their fuel usage in 2025.

Mr Heydon said previously that the package for farmers was one he had been working on “for some time”.

He said the initial 250 million-euro package of supports from Government limited action on green diesel because while it had risen exponentially as a result of the war in the Middle East, there is “very little” excise on it.

“So what I was doing was designing the scheme over the Easter break, before the protests ever started,” he told RTE’s Today With David McCullagh programme.

“I had meetings in Government Buildings on Holy Week with the farm contractors of Ireland, with the IFA (Irish Farmers’ Association) and others around designing the scheme, which is the first time ever (we) will have had a scheme for our contractors directly.”

He said the subsidy payments would be backdated to March 1 and cover the five-month period from March through to July, covering the busy farming period including from the silage season and the cereals harvesting season.

“We had contractors who were seeing a 70,000-80,000 euro increase on their diesel bill alone and fear of it not being sustainable to carry that debt, but farmers not being in a position to be able to pay them,” he said.

He said the scheme would provide a lump-sum payment based on an application where applicants self-declare their fuel usage for last year.

He said there will be caps and ceilings in place that would be agreed with farm contractor representatives and that he had also discussed the matter with the banks “to allow for the fact that this money is coming”.

“I will do this as quickly as possible,” he said.