Food prices face 'significant' rise to address costs from Iran war, warns IFA president

Oil prices and fertiliser prices rise in fallout of Middle East conflict

IFA president Francie Gorman has called for carbon tax to be suspended, amid surging energy prices faced by farmers, with the Government to announce reductions to energy taxes on Tuesday. Picture: Finbarr O'Rourke

Food prices will face "significant increases" to address added costs for Irish farmers and producers as the war in Iran endures, IFA president Francie Gorman has warned. 

The enforced closure of the Strait of Hormuz by Iran in response to attacks from Israel and the US has cripped movements of oil and fertiliser through the region, with a ripple effect for Irish producers.  “The reality is that there will be significant increases in food prices to address these cost hikes unless the Government does something meaningful to mitigate the situation,” Mr Gorman said.

Mr Gorman said green diesel for agriculture has increased by over 50% since the war with Iran began. “Apart from the extra direct cost for farmers, farm contractors who do a lot of work on farms are experiencing significant cost increases,” he said.    “Government tax on green diesel is circa 22c per litre, of which 17c is carbon tax. The only way the Government can make a significant difference to taxation on green diesel is to address carbon tax. There is no alternative fuel source for agricultural vehicles, so the tax cannot achieve its objective."

Mr Gorman said that fertiliser prices are also surging for those who have not bought supplies. "The EU fertiliser market has been disrupted as a sizeable amount of global fertiliser travels through the Strait of Hormuz. It’s imperative that our Minister for Agriculture pushes the EU Commission for the immediate suspension of Carbon Border Adjustment Mechanism tariffs on fertiliser,” he said.