CONTRACTORS
conjunction with the merger of CEETTAR and the European Forestry Contractors Association. The society’s link with CEETTAR has been of great benefit over the years. “We’ve learned a lot from them,” he says. “If there’s a problem related to machinery we can email people and they can email us.” The various members of the European group also share ideas and events. In January of this year, the FCI held its first Confex – conference and exhibition – for contractors at the National Show Centre in Swords. The biennial event, modelled on a similar event run by the German Agricultural Contractors Association (BLU), attracted more than 700 people and included over 35 trade stands and 30 seminars. “The event was designed to be a forum for contractors to learn and to meet other contractors,” Moroney explains. Among the attendees at the conference was a delegation from CEETTAR in Europe, which included a presentation from the President of the organisation, Klaus Pentzlin, focused on European contracting. According to Moroney, the conference was a huge success. “It put us on the map,” he states. “It was seen as a valid and useful event.”
CONNECTING PEOPLE
As well as establishing good connections with other contractors, one of the main aims of the FCI is to promote good contractor/farmer relationships. As Moroney points out, the role of contractors in Irish agriculture has changed significantly in recent years, with contractors having greater input into planning production on farms. They play a key role, for example, in ensuring quality silage by timely cutting with modern machinery to facilitate fast and efficient harvesting. However, adverse weather conditions earlier this year have posed problems for many contractors in this regard. “Farmers were advised not to roll silage fields as weather conditions in March were poor,” says Moroney. This has had a negative impact on farm
contractors who are experiencing more stone damage than in previous years, adding significantly to machinery running costs. “Silage contractors have picked up everything from boulders to bed frames, with one contractor taking a full-size field gate into a brand-new mower,” he adds. That can be hard to swallow – Irish farm and forestry contractors invest more than €150 million in new machinery each year with more than €25 million invested in silage harvesting equipment alone. These workers also use in excess of 500 million litres of diesel annually during the course of their farming and forestry services, so their operating costs are already quite significant before adding repair costs to their bill. High fuel usage presents another problem for contractors in 2018, having witnessed a 36 per cent increase in diesel costs. According to research by the FCI, quoted diesel prices have risen from €0.55/litre in 2017 to €0.75/litre this year. It is believed that this has added in excess of €500 per day in fuel costs to the overall running costs for silage contractors. This increase in costs will most likely be passed on to farming clients, many of whom already experience cashflow difficulties on their own farms. This has a knock-on effect on the sustainability of contractor businesses who are dependent on client farmers for their living. As a result, the FCI has submitted two proposals to the government that would make silage harvesting more cost-effective for Irish farmers. “The first option is to reduce the VAT rate on agricultural contracting services from 13.5 per cent to 9 per cent,” Moroney suggests. “This is the easiest in an operational sense as it would just require the changing of [the] VAT rate on a form.” The association has proposed reducing the VAT rate to 9 per cent for a period of two years to facilitate farmers and contractors in dealing with forage difficulties presented by the spring of 2018. Based on FCI research, this decrease could
result in savings of €12 million to Irish farming, improving cash flow on farms while still allowing contractors to account for increased diesel costs in their charges to clients. An alternative suggestion is to remove the carbon tax from agricultural diesel used by these contractors to account for market price increases and to allow contractors to maintain charges at 2017 levels. Overall, this could secure savings of €14.4 million on diesel costs, they say. Moroney acknowledges that this would be more complex. “The second option is a little more difficult administrationwise,” he admits. “Contractors can’t get the carbon tax rebate so this would allow them to avail of it. However, it could result in more calculations when it comes to filing tax returns.” The FCI is still waiting for a response on both proposals but Moroney is hopeful that their suggestions will be taken into consideration. However, there are plenty of other projects on the horizon for the FCI, including a programme of regional meetings this coming winter that will take place in contractors’ yards rather than a hotel. “It’s a more relaxed setting,” Moroney clarifies. “There will be presentations from machinery companies, finance companies and other suppliers to contractors.” The FCI is also currently working on the development of further training programmes to enhance the skillset and knowledge of their members, including health and safety and risk assessment during contracting work. Moroney notes that they have already seen a lot of interest and are looking at steps around training for product updates, such as balers. In the immediate future, the key aim is to expand and develop the membership through the national database of more than 1,200 farm and forestry contractors. “Our long-term ambition is to develop the range of services and supports for this unique group of rural agri-businesses that can match the supports available for farm and forestry contractors across Europe,” he concludes.
