Holly Cairns
Question:45. Deputy Holly Cairns asked the Minister for Agriculture, Food and the Marine what measures his Department is taking to assist small scale fishers with fuel costs. [8554/24]
View answerThursday, 22 February 2024
Questions (45)
Oral answers (8 contributions)
Small-scale fishers operate on very tight margins. The ongoing rise in fuel costs over the past few years has impacted these boats significantly. Other countries such as France and Spain have supported small scale fishers with high fuel costs through the European Maritime Fisheries and Aquaculture Fund. Will the Minister introduce a similar scheme to assist small scale fishers with fuel costs?
I continue to be particularly aware of the challenges being faced by the seafood sector and by fishing families and particularly the challenge we have had over the past couple of years around the increased costs of marine fuel. As previously stated in a response to this issue, I met with the industry’s representative groups a number of times to discuss this as well as other matters.
I also reported on the development of support schemes in line with the recommendations of the seafood task force, which I established. Members were primarily from fishing organisations. We created a number of schemes out of that, totalling an overall contribution of €305 million to the fishing sector across many schemes, including, importantly, the inshore sector, last year and the year before. We are finalising the next European Maritime Fisheries and Aquaculture Fund, which will see €258 million spent over the next number of years on several programmes and schemes to support the sector.
On fuel, marine gas oil is unlike most other fuels in that there is no Revenue charge on it at all other than VAT, which can be reclaimed. It is different from home heating oil or car or farm fuel in that there is no Revenue charge by the State on it other than VAT, which can be reclaimed. That can be more of an issue for smaller fishers because they may not be registered for VAT, which I accept. Particularly for the whitefish fleet, the second tie-up scheme I put in place had the objective of supporting the fuel pressures. There has been some easing although it is high by historical standards. Prior to the invasion of Ukraine, marine gas oil reached 62 cent per litre on the Rotterdam index, the international benchmark used to assess that. It then went as high as €1.11 per litre over the past few years at particular points during the war. It is now back to around 61 cent per litre. As of today, it is about 67 cent per litre, I think, on that index. It is a couple of cents higher than it was the week before the invasion. Prices have been higher. It is putting pressure on but the key point is, from a State point of view, we do not apply Revenue on it. Other than that, you are getting into a subsidy situation which brings significant condensations of its own account when you subsidise fuel, as opposed to removing Revenue charges the State might imposed, which we do not.
The Minister indicated that supports have been made available by the Government to fleets in the form of tax rebates. As he said, it is not accessible for the owners of smaller boats that do not operate on big enough margins to register for VAT. That is a support only in place for larger players. Small boats generally operate using petrol engines as opposed to diesel. There are no supports available to those fishers. The Minister says he accepts that, but what is his response? Rising fuel costs over the past few years have eaten into the marginal profits of small-scale fishers. If this is not addressed, it will drive inshore fishers out of business. In 2022, the European Commission activated crisis measures under the European maritime fisheries and aquaculture fund to support the sector in response to the Russian invasion of Ukraine. Other EU countries, as I said, like France, are using that fund to support small-scale fishers using petrol engines. I ask the Minister for Agriculture to do the same. The sector has been crying out for these supports for years. Will the Minister outline how much European funding to fisheries and the marine remains unallocated?
We are using it all up. We will not leave any of it behind.
Is it all allocated now?
I do not know offhand. I can ask my team to revert to the Deputy on that matter. It will all be used. In the coming weeks, I will announce about €258 million in different schemes that will come in over the next few years to support the sector, particularly inshore fishers. The price on 12 February for marine gas oil was 64 cent per litre. Just before the invasion of Ukraine two years ago, it was 62 cent per litre. It is back to the level it was before the invasion of Ukraine albeit prices then were a bit higher than what they would normally have been. We already do not apply any Revenue charges to the fishery sector other than VAT, which, for most fishers, is reclaimable. What the Deputy proposes is that we subsidise and pay for fuel and not only not charge tax but actually pay towards the cost of that fuel. That is a different space altogether. It opens up a set of new considerations, for example, once you start paying for and subsiding something, at what point is that withdrawn? Does it lead to uneconomical fishing and a situation that is less sustainable in the long term? The Deputy is free to put forward a specific proposal in this regard. It would be an entirely different space for the State to go into to subsidise fuel. I am open to hearing what proposals the Deputy would come forward with as to how that would work and the implications in the future.
It is just not good enough that larger boats are supported by Government in so many ways and that inshore fishers tend to be ignored. They pay a higher cost for fuel in the first place. Fuel costs in bigger ports are lower due to demand and supply for bigger vessels. Small boats operating from small piers and harbours have to buy it at local petrol stations at much higher costs. The small-scale fleet crucially accounts for the vast majority - more than half - of employment in the sector. It cannot continue to be excluded from all the schemes and fuel supports. All of these things are designed for the bigger players. Of course the Department can look for ways to support the inshore fishers and smaller boats in the sector as well. It does not have to be a case of saying that we are entering new territory and asking how we could possibly look at it. Generally, in the way schemes are designed, smaller players are excluded. This is a continuing trend. Something must be done about the disregard for vessels under 8 m in west Cork and other areas. As the Minister knows, salaries for small-scale fishers are low. They cannot be allowed to drop further. Other countries have introduced fuel supports for smaller boats. I ask the Minister to look at doing the same.
The Deputy is welcome to put forward a policy suggestion in this regard as to what such a scheme would look like. It would entail paying for and subsidising the cost of buying fuel because the State does not apply any Revenue charges. Her party does not have any policy in this area at the moment. Should she wish to develop a policy, I will look at it and see what she proposes. The State does not apply any Revenue charges except for VAT, which is reclaimable by many fishers but not all. VAT, as the Deputy knows, applies across the Common Market. What it is and is not applied to is standard and uniform across the European Union, so we cannot adjust that. There is no Revenue charge whatsoever on marine gas oil. We also oppose any moves at international level, of which there are a number, to insist that there should be a Revenue charge on marine gas oil. In World Trade Organization negotiations at the moment there is a push for that, for example. I am resisting that because I do not want to see any Revenue charge applied because it is important to the profit lines of fishers. Should the Deputy's party wish to develop a policy on this matter, we could consider but it would be getting into the space of not only not applying Revenue charges and tax on fuel but paying people and subsiding the buying of fuel.