FEBRUARY 10, 2008: The NFU has hit out over plans to increase the fuelduty on diesel and petrol by 2p a litre from April 1 and urgedChancellor Alistair Darling to scrap the proposal.

In a letter to Mr Darling, NFU President Peter Kendall expressed “considerable concern” at the effect the proposal would have on the farming industry, which is highly dependent on the haulage industry for the delivery of goods and the distribution of produce.Mr Kendall said: “With fuel accounting for 35 per cent of haulage input costs, inflation in the haulage industry already runs at over six per cent and this cost has to be recouped through higher charges to the user. However, as primary producers farmers are inevitably price takers, not makers, so they cannot recoup their increased costs through selling at higher prices.”Rural communities already pay higher fuel prices than less remote parts of the country, and a further increase at this time will hit both rural businesses and communities particularly hard. Clearly oil prices are set in a global market, and we look to the Treasury to adjust its proposals to ensure UK industries remain competitive.”Mr Kendall said the NFU was dismayed that recent fuel duty increases had hit red diesel disproportionately hard.”Frankly I am puzzled by the justification for these increases – on the grounds of combating fraud and protecting the environment – and have to say I find them entirely unconvincing. Over the last five years farmers have faced a red diesel price increase of over 180 per cent, driven not only by increased oil prices but by the duty element, which has increased disproportionately compared with other fuel.”Although the profitability of cereal farms has improved, I am extremely concerned by the severe falls in income in the livestock sector, notably pigs, poultry, grassland livestock (cattle and sheep farms which continue to suffer from the effects of foot and mouth disease and bluetongue), and hill farms. At such a difficult time for these businesses a significant increase in fuel costs, both on road and off road, would be very damaging to their ability to recover to sustainable profitability.”

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