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LV Farmers: We are not rich enough to introduce dyed diesel
At the end of 2014, amendments were made to the Law "On Excise Duty", which stipulates that from July 1, 2015, Latvian farmers will have to purchase marked (labeled) diesel fuel. Most non-governmental organizations of Latvian farmers and fuel traders are categorically against the entry into force of the new norm and believe that now, when the law is open, the ill-considered decision should be repealed.
For several years, an effective and modern monitoring system for excise-free diesel fuel intended for farmers has been operating under the Rural Support Service. In order for farmers to be entitled to purchase the diesel fuel intended for them, they must meet a number of conditions. The new decision additionally introduces a completely ill-considered and unexamined requirement – marking (labeling) of diesel fuel, creating costs for both farmers and fuel traders, and the state as a whole. According to farmers' calculations, the price of marked (labeled) diesel fuel will increase by approximately 5-6 euro cents per liter. Costs will also arise from creating additional infrastructure for separate logistics and storage of colored fuel, as well as a control system from the state side.
In addition, no studies have been conducted in Latvia that would confirm that labeled diesel fuel does not have an impact on animals, the environment, tractors, and the engines of self-propelled agricultural machinery.
Juris Lazdins, Chairman of the Association "Farmers' Council": "The new legal norm has been imposed by force by the government, which will additionally cause significant financial losses for farmers. According to our calculations, at least a third of farmers (approximately 5,000 farms) who have applied for diesel fuel intended for farmers will be forced to purchase additional tanks for storing labeled fuel in the near future. If the minimum price of a tank is at least 3,000 euros, then we can very easily calculate that farmers will have to invest at least 15 million euros in the purchase of new tanks at a time when incomes have significantly decreased due to both climatic and political conditions."
Sandra Stricka, Chairwoman of the Board of the Association “Farmers' Association”: "When the discussion on the coloring of diesel fuel began, there was an agreement that it would not be limited. Currently, we see that the situation is different, because it is planned that diesel fuel will be both colored and limited, as a result of which many farms will still have to purchase additional diesel fuel without the intended benefits, because the allocated liters are not enough to ensure the basic operations of farms. Currently, the situation in the agricultural sector is, to put it mildly, complicated and the new regulations will not make farming easier. Limiting fuel will not have any effect, but will once again limit farmers with unnecessary bureaucratic obstacles. The state must use tools for effective control of fuel use, but in no case should it limit the farming process itself."
Chairman of the Board of the Beef Cattle Breeders' Association Rihards Valtenbergs: "Sheep farming and beef cattle breeding in Latvia are sectors where the largest proportion of farms operate with organic farming methods, use pastures and maintain them using diesel fuel in farming. If a new chemical is introduced for diesel fuel in agriculture, then an environmental impact assessment is mandatory to predict the expected environmental damage."
It is also very difficult for farmers to ensure that the marked diesel fuel is used only for work in the field, as it often happens that the same tractor is also used when driving to the forest to collect materials for building a barn. In that case, the marked fuel will have to be drained from the tractor, the tank rinsed out and unmarked diesel fuel poured in instead. Otherwise, the farmer may have to pay a fine of up to 7,000 euros and expect the tractor to be confiscated. I believe that the new system is ill-considered and must be changed.”
Association "Latvian Young Farmers Club", Raitis Ungurs:"Our task is to achieve the most favorable result for farmers – to abolish marked diesel and maintain the established rates: 130 liters for dairy farms, 100 liters for grain farms, and 60 liters for permanent grassland."
Mārtiņš Stirāns, Chairman of the Board of the Latvian Fuel Traders Association: "The introduction of the new system will create additional costs, which will inevitably increase the price of one liter of such marked diesel fuel. This will be due to the fact that it will be necessary to create additional reservoirs in excise warehouses for marking, as well as to purchase additional road transport units that will transport this diesel fuel, because this marking of diesel fuel will be both with paint and with a chemical element, and therefore it will not be possible to store and transport unmarked diesel fuel after it. Also, some fuel traders will most likely not be able to start marking by July 1, 2015, because the Cabinet of Ministers' regulations on specific marking requirements have not even been developed yet. Also, during the season, there will be problems ensuring prompt fuel delivery to farms, because the expected administrative procedures (for example, conducting analyses of marked diesel fuel) can extend the delivery of diesel fuel for up to a week from the moment of placing the order."
The new fuel labeling requirement has been opposed by non-governmental agricultural organizations such as the association "Farmers' Council", the association "Farmers' Association", the association "Beef Cattle Breeders' Association", the "Latvian Sheep Breeders' Association", the "Latvian Milk Producers' Association", the "Latvian Young Farmers' Club". The "Latvian Fuel Traders' Association" and the "Union of Fuel Traders and Producers" are also opposing the new fuel labeling requirement.
