NFU has expressed deep frustration at the outcome of today's budget which will deal Wales' agricultural industry a blow with a 2.4ppl increase on red diesel duty, a massive rise of 50% coming into effect from September.
This increase will equate to an increase of 10% to the total price per litre, costing the Welsh food and farming industry millions of pounds a year.
Disappointment was also expressed that no preferential rate was given for a low-sulphur red diesel fuel alternative.
NFU Vice President Meurig Raymond, who farms in Pembrokeshire, expressed dismay at the increased tax on red diesel fuel. He said, "The chancellor was making much of how the budget would help small businesses reinvest and look towards the future, but this will increase costs to an industry that is only just showing signs of recovery.
More follows...
Another blow was also dealt with the Chancellor's announcement on bio-fuels. After NFU's call for a modest 28ppl reduction in fuel duty for biofuels, rates stayed the same at 20ppl, delaying any plans for the UK's farmers to help tackle climate change.
Mr Raymond said, "At a time of increasing public concern towards environmental and energy-supply, the chancellor's view on biofuels can only be short sighted.
"Biofuels derived from natural green crops such as oil seed rape, sugar beet and wheat offer a workable green solution. Today's budget leaves the fledging biofuel industry in limbo. Since the government has not given any tax concessions, it is now urgent they find another route to promote this vital industry.
"UK farmers are keen to see their products move from field to forecourt, and help tackle carbon dioxide emissions at a time of increased concern about global oil reserves, national fuel security, global warming and climate change."
Proposals to increase the Inheritance Tax threshold were greeted cautiously, as was the small hike in the VAT threshold to £58,000, which were only rises in line with inflation. Capital Gains Tax was frozen, with only a small rise in the annual exemption allowance.
Farmers who have incorporated their businesses could be hit by changes to the zero rate, with a 19% corporation tax charge on the first £10,000 if profits are distributed (the zero rate will continue to apply to retained profits). More follows.... The NFU was pleased that the government recognised the good progress made by farmers through the Voluntary Initiative as a positive alternative to a pesticide tax. The schemes in the initiative aimed at the responsible use of pesticides are delivering key environmental benefits that would not be delivered by a tax, which could cost the industry £125m pa.