Carbon tax to ‘undermine the competitiveness of Irish exporters’

THE introduction of a carbon tax will undermine the competitiveness of Irish exporters, give advantage to imported food products and place more jobs at risk in the food sector.

Irish Dairy Industries Association director Michael Barry said a carbon tax will inflate the cost of domestically produced food products relative to imports.

“The imported equivalent will not be hit with the same taxes and will have a competitive advantage over domestically produced food,” he said.

Mr Barry said the tax will increase costs at all stages of the food production process. Farmers will pay a carbon tax on the fuel used in producing the food.

The transportation of raw materials will be taxed. Food processing will be subject to a carbon tax and packaging, storage and distribution will be taxed, he said.

“The dairy industry supports the ambition to create a low carbon economy in Ireland, but the revenues collected from a carbon tax must be used to reduce costs for business.

“This tax will do little to enhance overall sustainability and risks giving advantage to cheap food imports,” he said.

Fine Gael agriculture spokesman Michael Creed said the Government should have adopted his party’s proposal to exempt farm diesel from the carbon tax.

“Farming is a carbon heavy process where there is no alternative to farm machinery and vehicles. By failing to exempt agricultural diesel from this carbon tax the Government are merely taxing farm activity,” he said.

IFA president Padraig Walshe said at a time when high input costs are undermining the competitiveness of the exporting agriculture sector, the carbon tax will further increase farm production costs by €13 million in a full year.

Malcolm Thompson, ICMSA president, said the introduction of a carbon tax will add to costs for agriculture.