John Gormley (Dublin South East, Green Party)
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Question 36: To ask the Minister for Agriculture and Food her advice to farmers faced with a substantial rise in price from silage contractors due to a rise in diesel prices by over 30% in the past year. [17407/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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The cost of fuel and energy, driven by international oil prices, is an issue for all parts of the economy, including the agriculture sector. The CSO wholesale price index fell by 2.3% in the 12 months to March 2005 but within this auto diesel costs increased by 18.6% and gas oil increased by 35.5%. These changes in fuel prices have contributed to recent increases in the consumer price index. Fuel and lubricants, which include petrol, diesel and motor oil, account for about 3% of the total basket of goods used in the compilation of the consumer price index. The increase in this for fuels and lubricants was 9.5% in the 12 months to April 2005.

In the agriculture sector there was a similar pattern. The cost of all agricultural inputs, as measured by the agricultural inputs price index, increased by 3.5% in the 12 months to February 2005, the latest figure available. Over the same period the motor fuel costs item within the agricultural index increased by 15.1%. Silage contractors are likely to pass on these cost increases to their customers. It is important that farmers actively seek the best price available for these services.

Rising input costs and fluctuations in international oil prices underline the importance of ensuring that all inputs are used efficiently. Research suggests that while many farms are operating at impressive levels of efficiency, there are others where there is considerable room for improvement. I am sure that the change to the single farm payment system and the consequentially increased focus on market returns will underline these facts and will increase the attention paid to the efficient use of inputs.