09 April 1999
Rising fuel costs might threaten farmers pockets

By Robert Harris

Friday, 9 April, 1999

SPIRALLING fuel costs are forcing hauliers to push for higher transport rates which could leave farmers picking up the bill.

The governments fuel duty escalator which raises the price of derv each year by inflation plus at least 6% is to blame. This “green” measure, designed to cut emissions, resulted in a hike of 11.7% in last months Budget, more than 6p/litre.

Hauliers cannot afford it, says Penny Mordaunt of the Freight Transport Association. “Duty now represents 90% of the cost of fuel. The latest increase will add £625m to the transport industrys bills. Unless something is done, 26,000 jobs will be lost from haulage, and 53,000 from the wider economy.”

The extra duty will cost grain haulier D Christmas Transport of Aldington, Kent £40,000 a year. The company runs 20 trucks which shift 280,000t of grain annually.

“If we do not get an increase in rates soon, we wont be here,” says David Christmas. “We need a 6-7% rise just to stand still.” This would add 40p to the £5.75/t the company charges for a typical haul to Tilbury, Essex. “Farmers will have to pay a lot more unless they support us and lobby the government.”

Input costs could also be affected. John Taylor Transport of Ashford runs fertiliser, mainly from Avonmouth and Cheshire, to the south-east, for £8 and £12/t, respectively. “We have asked fertiliser companies for 8% more,” says Brenda Taylor.

Dalgety reckons the rise in fuel duty will lift haulage costs by up to 6%. “That is the equivalent of 24p/t across a range of bulk feeds,” says logistics manager, Andy Dowd.

Raw material hauliers supplying the firms mills are asking for 4-6% more, he adds. Whether the company recoups the cost from customers remains to be seen. “At the moment we are soaking this up. Ultimately, I suppose it always gets passed on.”

The NFU is so concerned it has joined the “Fair Play on Fuel” campaign run by the Road Haulage Association and the Freight Transport Association. “We take this threat very seriously,” says head of technical development Andrew Opie. “Transport costs are a major consideration for all growers. We appreciate the problems that hauliers are having, but farmers cannot afford to bear any more costs.

“There is real concern that if fuel costs continue to go up, there could be a shortage of hauliers at peak times,” he adds.

Transaction, the hauliers lobby group which brought central London to a standstill last month intends to repeat the exercise in several UK cities on Monday. “We think the government has made a big mistake. All we want them to do is rectify it,” says spokesman Frank Steers