Time to abolish Green Diesel and operate a rebate scheme for farmers

celebtastic said:

Fully agreed it should be abolished - with no rebate. Food prices and subsidies are too high as it is.

Farmers will always have the poor mouth on them

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Sorry, you are not making sense here. You are stating that food prices and subsidies are both too high as it is and recommend abolishing both including the mechanism that is designed to keep prices lower.
I am quite sure that many farmers would be happy for market forces to come into play where a fair price was paid for their product. The system in place was designed to ensure supply at a rate that people could afford. Anyone who knows anything about farming knows that many farmers are paid less than production prices for food and it is only the subsidy that sustains the system - quite a valid reason to "have the poor mouth" when they want to run a profitable business.
So by all means abolish the subsidies but be prepared to pay a fair price which will meaning paying a lot more - without having the "poor mouth on" of course.

Woodie said:

Sorry, you are not making sense here. You are stating that food prices and subsidies are both too high as it is and recommend abolishing both including the mechanism that is designed to keep prices lower.
I am quite sure that many farmers would be happy for market forces to come into play where a fair price was paid for their product. The system in place was designed to ensure supply at a rate that people could afford. Anyone who knows anything about farming knows that many farmers are paid less than production prices for food and it is only the subsidy that sustains the system - quite a valid reason to "have the poor mouth" when they want to run a profitable business.
So by all means abolish the subsidies but be prepared to pay a fair price which will meaning paying a lot more - without having the "poor mouth on" of course.

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We would have to remove the trade barriers that help keep the poorest people in the world trapped in poverty as part of the process but there's no way farmers would accept an open and level playing field, even though, in the long run, they might be better off.

Purple said:

We would have to remove the trade barriers that help keep the poorest people in the world trapped in poverty as part of the process but there's no way farmers would accept an open and level playing field, even though, in the long run, they might be better off.

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Fair point. Whilst there has been a lot done to improve trade, more can be done. But looking at how sugar was managed it does not breath confidence. It only illustrates the nonsense of making sweeping loaded statements about singular issues such as green diesel when there are a lot of complex issues at play here.

Excuse my ignorance on this, but how does this work, and is the black market internal or mostly cross border?

Purple said:

We would have to remove the trade barriers that help keep the poorest people in the world trapped in poverty as part of the process but there's no way farmers would accept an open and level playing field, even though, in the long run, they might be better off.

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Yes but to level the playing field Irish farmers must also be permitted to use the same practices as those in other countries which would be to the detriment of the ecosystems and the food we consume.
The regulations that are adhered to are a huge cost to production.
Brazilian beef being a case in point; it's a hugely unregulated market, Irish beef's traceable "farm-to-fork" system is a huge selling point on the international market.
The Nitrates directive and disposal of carcass' would have to be leveled with competing markets.
Emissions regulations and the use of Adblue would have to be removed also.

I think the claim back system would expand the diesel black market. As present to wash green diesel there is a significant investment required to set up the plant. If a claim back system was introduced, all that is required is storage, which is extremely easy to set up and conceal. Every farm countrywide would have the capacity to set this up and would be a farce to police. Another quango is not what is needed.

Just to clarify a few misconceptions re green diesel. It was introduced to help farmers at a time when they desperately needed it. They could probably get by as Brendan suggested without it nowadays but do you want tractors in O'Connel st again? Seriously though, tractors use app the same amount of diesel as lorries ie. 6/10mpg. Lorries use normal diesel and the cost of this also impacts on food prices.
Re security, it costs app €1500 to purchase a second hand lorry container and store fuel tanks in that. They can then be made vandal and thief proof. Many farmers and haulage contractors do this.

Farm subsidies are actually a subsidy to the consumer as food is sold nowadays at cost of production. Most commercial farmers make almost no profit but exist on the single farm payment. The diesel subsidy is significant in keeping food prices affordable but I agree it should be in the form of a rebate. Re the price of food. This has never been cheaper and food now constitutes app 10% of average working class household income. A century ago this figure was 70%.
And finally, have you never been stopped by the customs officers at a road block. They check your engine and if you are driving a diesel car or lorry or jeep on green diesel they normally confiscate it. The fines are also penal. If you are lucky you get a first offenders fine of €1000. They also dip tanks etc at cattle marts and other similar venues.

(On a point of fact, there is not a subsidy on green diesel. The truth is that this type of diesel is not subject to the same very high levels of taxes and VAT that other fuel types are, which makes green diesel less expensive. There is actually no subsidy in the proper sense.)

Where do the people who convert the green to white diesel get their supplies from? Is there not a simplier solution - focus on the sellers of the green diesel and where that goes? Would be much easier to 'police' the suppliers than hundreds of thousands of farmers and other buyers of lower rebate diesel. Make the suppliers more responsible, keep proper books and records, reconcile volumes in and out - they have to keep VAT records which does something very similar on other supplies. Audit the suppliers. If suppliers see unusual trends, eg massive volumes of green diesel going to a small outlet, a possible warning sign?? Any solution would need to be an all Ireland one, otherwise wouldn't work.

I agree in theory with the argument to eliminate subsidies but only if the price paid to farmers fairly reflects the costs, however in practice I doubt that will happen. Subsidies paid to MOST farmers are simply to ensure that consumers get cheaper food so in effect are a subsidy to the consumer. They were introduced at a time of real concern that food supplies would not be adaquate to feed the worlds population and to ensure food supply, quality, reliability and security of supply. They also allow food producers to compete with lower cost food from other regions which are not subject to the same standards of food production. If farmers were paid a proper price for their produce, allowing a reasonable profit margin, and a proper market existed, then there would not be a need for any subsidies. Alas, it doesn't work like that.

Gerard123 said:

Where do the people who convert the green to white diesel get their supplies from? Is there not a simplier solution - focus on the sellers of the green diesel and where that goes? Would be much easier to 'police' the suppliers than hundreds of thousands of farmers and other buyers of lower rebate diesel. Make the suppliers more responsible, keep proper books and records, reconcile volumes in and out - they have to keep VAT records which does something very similar on other supplies. Audit the suppliers. If suppliers see unusual trends, eg massive volumes of green diesel going to a small outlet, a possible warning sign?? Any solution would need to be an all Ireland one, otherwise wouldn't work.

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The new Revenue ROM system aims to do exactly this.

http://mcgibney.ie/2013/01/23/taxmans-big-brother-plan-to-tackle-fuel-criminals/

Gerard123 said:

Subsidies paid to MOST farmers are simply to ensure that consumers get cheaper food so in effect are a subsidy to the consumer. They were introduced at a time of real concern that food supplies would not be adaquate to feed the worlds population and to ensure food supply, quality, reliability and security of supply. They also allow food producers to compete with lower cost food from other regions which are not subject to the same standards of food production. If farmers were paid a proper price for their produce, allowing a reasonable profit margin, and a proper market existed, then there would not be a need for any subsidies. Alas, it doesn't work like that.

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Agree, well put. Recent weather has really put farmers on the back foot and it has still not abated yet we have witnessed no spikes in food price which would have ordinarily occurred due to increased housing and feed costs.