FARM LEADERS have hailed a government decision to postpone an increase in red diesel duty as a victory for farmers.

Farmers faced a 57% tax hike after the Chancellor announced in the spring budget duty would be raised by 2.42p per litre in Sept 2004.

But current pressures on the oil market have persuaded the Treasury to scrap plans for the increase until at least November.

National Farmers Union president Tim Bennett said the Treasury had “acted in the best interests of this country‘s agricultural sector”.

High oil prices were already threatening the profitability of many farm businesses, he said.

He also welcomed comments from the Treasury that it will consult interested stakeholders before any duty increase is implemented.

“We very much hope that the Treasury will use this consultation period to reassess the duty increases, given the background of continuing high and volatile fuel prices,” said Mr Bennett.