IFA’s own financial worries on back burner as it works to get farmers through 2018 challenge

Like any disagreement, it will take time to work it out, says Joe Healy on ABP not collecting levy from livestock sales for IFA.

A rare day on his farm at Athenry, Co Galway, for IFA president Joe Healy.

Farmers make investment decisions based on what they see ahead, IFA president Joe Healy told a recent AIB-hosted seminar at Corrin Mart in north Cork, writes Joe Dermody.

With big unanswered questions hovering over Brexit, the CAP budget, Mercosur and climate change, many farmers are left wondering what lies ahead. Just one of their questions is will farm payments take a hit?

Joe Healy says that he is determined the CAP budget isn’t cut, with an upturn in the EU economy to offset any loss of UK payments.

There are many other questions. What market and commodity price challenges are coming down the line? What regulatory changes, and who picks up the tab for any national fines for failure to comply?

Healy leads Irish agriculture’s lobbying position on these and other issues, while looking over his shoulder at the uncertainty of IFA’s own finances. No meetings are scheduled for talks with ABP Food Group, which has not collected the EIF levy contribution from livestock sales for IFA, since controversy over IFA executive salaries broke out in 2015.

“We have met with the 200 collectors in the meat factories, co-ops, and grain distributors, and we will continue to meet them,” said Healy. “They understand that this is farmers’ money and that we’re using that money to fight for farmers’ issues.

“We have no meeting scheduled right now for the one group which is not collecting for us presently. It’s like any disagreement; it will take time to work it out. We’ve budgeted for a €1.4m shortfall this year. Right now, we’re using some of our reserves to cover the shortfall. That is what a rainy day fund is for.

“Ever since I campaigned for the presidency, the job has been about winning back people’s trust. That doesn’t happen overnight. Our members know how hard we’re working for them, and they tell us that they believe the levy is fair.”

The European Involvement Fund (EIF) is a funding mechanism used to fund farmers’ unions all across EU member states. As the largest Irish farmers’ union, the IFA effectively gets 15c for every €100 of sales by farmers, deducted by the co-op, mart or factory, unless a farmer specifically instructs them not to deduct.

Outraged by the then high pay packages of certain IFA top executives, some farmers have refused to pay since 2015. Some anger relates to non-IFA farmers not wanting to pay a levy to the IFA; some anger relates to the collectors getting a small share of the levy.

“There is a fee for the collector,” said Joe Healy. “That’s for facilitating the collection. It’s the most equitable way of collecting the money.

The bulk of the money goes to the IFA.

“We had a lot of big meetings in December, and they were all about fodder.

“When the levy was raised for discussion, we talked about it. At a meeting in Wexford, one man asked us to explain what a 0.15% levy on a sale meant, in money terms. When I explained that it was €1.50 for a €1,000 sale, he said he’d heard all he wanted to hear about it.”

Healy is keenly aware that many farmers see IFA funding as a sideshow to their personal concerns. Healy came to office vowing transparency and a willingness to discuss all issues openly.

This includes focusing on key bottom line numbers for farmers. For instance, farmers are watching to see if the pre-Christmas weekly beef kills of 37,000 to 40,000 will continue. Can kill numbers stay up? What, if any, are the price implications?

IFA’s main role is defending farmer profitability. It watches the beef kills and the beef price. It regularly meets Meat Industry Ireland to push for higher prices for cattle.

It also promotes the benefits of the genomic scheme for beef farmers, and higher profitability for better quality.

Live exports rose 30% to 190,000 in 2017, largely boosted by dairy bull calf sales.

IFA achieved a 50% reduction on transport costs, worth €1,100 per lorry. With an extra 100,000 head of live exports likely this year, this saving is significant.

In meetings with the banks, it negotiates low cost loans which save a farmer with a €30,000 loan €800 a year.

With the average dairy herd having jumped in size, pressure on labour is a growing issue.

A Teagasc study suggested 6,000 extra dairy sector workers will be needed in the next few years. IFA has asked Business Minister Heather Humphreys to ease the red tape for people from outside of the EU to work on Irish farms.

These are examples from the dizzying menu of issues around sustaining farm profitability, from covering big ticket issues in Brussels debates down to immediate concerns about animal feed and fodder distribution to areas in most urgent need.

Any progress is welcomed. “The importance of getting the nitrates derogation for Ireland cannot be overstated,” said Joe Healy. But it adds new rules, in addition to the existing calendar dates for slurry which “have to be looked at”, according to Healy. “We’ve had years when November has been very mild, and we couldn’t get out to spread slurry.”

He says farmers are playing their part in fighting climate change.

“Since 1990, Ireland’s agricultural output has grown by 40% while greenhouse gas emissions have fallen by 3.5%.

“Ireland is the most carbon-efficient producer of dairy products in Europe and the fifth most carbon-efficient producer of beef in Europe.”

The IFA President says the suggestion by the Citizens’ Assembly of a carbon tax to drive farmers away from livestock and towards planting forestry takes no account of the economic and social impact it would have.

Brexit, the CAP budget, Mercosur and climate change policies all impact on the farmer’s aim to produce food sustainably and profitably, for a global population heading towards 9 billion.

“The next 12 months will define our futures, in many ways,” said Joe Healy. “From this point, it looks like it will be a tricky path to navigate.

“Brexit still poses a significant threat to the farming and food sector. If the UK wants continued access to the EU market, the EU must insist that the UK will not be free to open their markets to low standard or low value products from outside the EU.

“North-south regulatory alignment will help to solve one problem of the hard border in Ireland. East-west regulatory alignment has the potential to deliver a lot more, to avoid major disruption for Irish food exporters to our largest market, Britain.”

Meanwhile, the EU Commission has yet to declare its plans for oversubscribed milk powder stocks, and many predict the milk price with soften, with a 30c per litre average accepted as a reasonable figure for 2018 dairy farm plans.

However, Joe Healy sees this year as very positive for dairy. “We hope we won’t need intervention this year,” he said. “There is huge demand for quality dairy product, and we’re barely producing enough currently to meet that demand.”

Nevertheless, IFA has urged Agriculture Commissioner Phil Hogan to ensure intervention milk stocks are rolled out cautiously, to avoid market disruption.

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