Fuel support scheme welcome as silage costs remain high

Sean Mannion, Teagasc Drystock Advisor, discusses the Fuel Income Support Scheme, which provides timely support for farmers and contractors as high diesel prices continue to drive up silage-making costs.

Rising fuel and machinery costs continue to place pressure on farm margins in 2026, particularly as silage harvesting gets underway on many farms. Following a difficult spring, slower-than-normal grass growth on some farms has added further pressure to silage supplies and feed costs. Against this backdrop, the Fuel Income Support Scheme represents welcome support for farmers and agricultural and forestry contractors facing increased diesel costs. Applications for the scheme close on May 27th.

The scheme has been introduced to support farmers and agricultural and forestry contractors facing significantly increased fuel costs in recent years. While the payment will not fully offset higher diesel bills, it should provide some welcome cashflow support during a challenging cost period.

Eligibility for support is based on the use of marked gas oil (green diesel) for agricultural or forestry purposes during the 2025 calendar year. Applicants must make a self-declaration of total fuel usage for 2025 based on receipts or fuel statements, which may later be subject to verification checks by the Department of Agriculture, Food and the Marine (DAFM).

To qualify, farmers must have been actively farming in 2025 and continue farming in 2026. New entrants who commenced farming in 2026 may also qualify under certain conditions. Pig and poultry producers registered with DAFM are also eligible to apply.

Agricultural and forestry contractors may also apply where they are VAT registered, tax compliant and providing agricultural or forestry services.

For farmers completing their own application through the AgFood online portal, or through their agricultural agents, the total litres of green diesel used during 2025 is the main figure required at application stage. While fuel receipts are not required initially, farmers should ensure all invoices and records are retained in the event of inspection or verification checks.

The final payment rate will depend on the total number of applications received. However, DAFM has indicated that payments are expected to be based on approximately 20c/litre of estimated fuel usage during the peak farming period from March to July.

For example, a farmer who used 2,550 litres of green diesel during 2025 will receive approximately €208 in support. A larger farm using 6,500 litres will receive a payment of €541, although final figures may change depending on overall scheme uptake. A minimum payment of €100 will apply under the scheme, meaning applicants using less than approximately 1,200 litres of green diesel in 2025 are unlikely to qualify for payment.

The timing of the support is particularly relevant given the continued high cost of silage production in 2026. Current estimates place the cost of making silage at approximately €44 per bale excluding land charges, rising to around €54 per bale when land costs are included.

These figures are based on Farm Contractors Ireland (FCI) contractor charges published earlier this year and could increase further if fuel prices remain volatile during the silage season.

Harvesting remains the single biggest expense at approximately €32 per bale, with fertiliser and slurry application contributing a further €10 per bale. Fixed costs, including reseeding and facilities, add approximately €3 per bale.

The estimates are also based on achieving 12 bales/acre from first-cut silage and 9 bales/acre from second cut. Harvesting costs include approximately €20 per bale for bale and wrap (including plastic), €7 per bale for drawing and stacking, and €4.50 per bale for mowing and raking.

These figures assume all silage operations are completed by contractors. Costs may differ on farms carrying out some work in-house depending on machinery ownership and individual farm systems.

Slurry application continues to play an important role in reducing fertiliser costs. Typical first-cut silage ground may receive approximately 2,500 gallons of slurry per acre, with second-cut ground receiving up to 2,000 gallons per acre, helping reduce the requirement for purchased nitrogen.

Rising silage and machinery costs again highlight the importance of maximising the utilisation of grazed pasture on livestock farms, with the competitive advantage of grazed grass increasing as feed and fuel costs rise.

While the Fuel Income Support Scheme is unlikely to fully offset increased machinery and contractor costs, it does provide useful support at a time when many farms continue to face pressure on margins. Farmers intending to apply should ensure applications are submitted before the May 27th deadline and that supporting fuel records are retained.