Mr. Michael Moroney:

I thank Senator Lombard for his comments.

The issues of sustainability are significant issues within the sector. To add to the Senator's comments about parts prices, tractor tyre prices have gone up by 50% in the past 18 months as well. Two of our members quoted for a set of tyres for a modern contractor tractor in October 2020 at €8,500 and the same set of tyres on the same tractor were purchased in October 2021 at a cost of €13,000. The costs are spiralling almost out of control at this stage and that affects the sustainability of the business.

Machinery costs are significant. Year-on-year machinery costs have been rising by between 5% and 10%. Some of them have been accounted for by new low-emission systems on tractors and the requirements for the manufacturers to adhere to the emission regulations as proposed by the EU. That has driven some of the cost increases, as has changes in the EU tractor directive whereby there was a requirement to change some of the design of issues, such as steps. All have added to additional tractor costs.

Significantly, in the Senator's area, in Cork, where there is a large number of contractors providing an excellent service to farmers, the investment that many of them have in equipment is now running into millions of euro. It probably brings into context the need for us to send a message as to why understanding costing is important.

That would probably lead us to think, if we are to be realistic about it, that there may be some changes and consolidation in the future. That is happening in other countries. We talked in particular to our colleagues in Denmark and Holland, where there is come consolidation whereby a number of contractors can come together in order to allow one of them to have an exit strategy. We would like to work with our membership in order to help them chart a way to that, if that is their desire. We will, realistically, see fewer people in the business because financially, as the cost structures stand in 2022, it is not sustainable at the rates that many of the contractors are charging. They are giving an excellent service to farms and they have given excellent value. They have given a service that is unique in terms of a customer relationship.

Mr. Hughes, our chairman, has mentioned that he has been in business for 74 years. The Hughes family has worked with generations of farmers over decades. They have developed a service that cannot be matched in any other sector. However, we are now at a point where the costs are beginning to be insurmountable. That is going to force some people to leave the business or consider consolidation and mergers because the only way they can bear the costs is by increasing the output from the same machines. That will necessitate significant change.