The livestock levy dates from the 1970s, introduced to help carry the cost of the IFA’s Brussels office, seen then as a vital lobby for the Irish agri-food industry, following our accession to the EEC.
Hence its name, the European Involvement Fund (EIF).
Since then, it evolved into a major source of revenue for IFA, with a small portion going to ICMSA.
Now for the first time, farmers selling their livestock are being asked by the ABP meat processing group if they want to continue paying the EIF fund.
Farmers who want to continue paying the levy must reply accordingly to the letter sent by ABP; those who wish to stop paying the levy, or who do not respond to ABP’s letter, will no longer have the levy deducted from cheques they receive for their livestock.
There is a further complicating factor, in that IFA President Joe Healy has written to Larry Goodman, instructing him to suspend the collection of the levy on behalf of IFA, with immediate effect (ABP, which processes about 22% of Irish beef cattle, is part of the Goodman business group.).
Healy said farmers will not be dictated to by Larry Goodman on how IFA does its business — implying that dependence on ABP collecting a levy for IFA leaves the farmers’ organisation somehow beholden to ABP.
The IFA president made it clear that ABP Group is no longer authorised to collect any levy on behalf of IFA.
That gives farmers little choice but to ignore the letters they get from ABP, a course of action which results in the levy not being deducted from their livestock cheques.
As a result, there is a significant hole left in farmer organisation funding. This comes on top of IFA’s loss of funding due to members dropping out after the revelations last November of IFA’s internal workings, which resulted in general secretary Pat Smith and president Eddie Downey resigning.
Membership fell to 75,501, compared to 88,000 in 2013.
IFA said last March 528 members dropped out since November, and membership fees were overdue from an additional 4,000.
At the time, an estimated net decrease of 12% in levy funding for IFA was revealed. Furthermore, about 300 had asked IFA for a levy refund.
Levy payments come from more than 200 levy collecting partners, who deduct an estimated 15c per €100 from sales of livestock and farm produce.
This is estimated to generate between one third and a half of IFA’s annual income. IFA’s annual report stated an income of €12.9m for 2014, and levy contributions of more than €4.7m to IFA were reported for 2015.
Now the organisation has turned its back on levies collected by ABP.
It remains to be seen if other beef processors will make it easy for farmers to stop the levy deductions.
They will carefully watch farmer reaction, because they can ill-afford to lose any ground to ABP in the competitive business of procuring livestock for processing.
There is a possibility that the country’s 100,000 farmers with beef cattle will support the ABP decision.
These farmers have seen the levy deducted every time they sell an animal in the mart or to the beef factories.
Cattle traded a couple of times and subsequently slaughtered in Ireland will have generated three levy payments.
Many marts have stopped collecting the farmer organisation levy, and lower prices in recent years for milk and for grain have also reduced it.
Macra na Feirme President Sean Finan has raised the risk that the 20% of the levy on milk sales, which funds Macra, could be in danger.
That could certainly be the case if the country’s 18,000 dairy farmers were left to generate the vast bulk of farmer organisation funding.
Farmers’ organisations have to move decisively to halt the danger of their funding slipping away.
After its 2015 controversies, IFA concluded that levies and affiliation fees were still their best and fairest funding option.
In contrast, Irish Cattle and Sheepfarmers Association president Patrick Kent pointed out that levies only reduce livestock prices which already fall short of a fair share of the retail price.
Alternative funding sources must be explored.
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