IFA funding threatened by fall-off in levies in beef sector

Levy payment is at centre of escalating row between Goodman firm and farmers’ group

The ABP group  last week ceased the automatic collection of the levy. Photograph: Owen Humphreys/PA Wire

The ABP group last week ceased the automatic collection of the levy. Photograph: Owen Humphreys/PA Wire

 

The Irish Farmers’ Association (IFA) is facing substantial losses in income with several beef processors reporting a major fall-off in levy contributions in the wake of recent pay scandals.

The Irish Times has learned that farmers and cattle dealers who supply up to 50 per cent of the beef to Ireland’s largest processors have opted out of the levy, which part funds the farmers’ group.

This compares to an average opt-out rate of less than 20 per cent at the same firms a year ago. The companies, which did not want to be named, account for the majority of beef processing in Ireland.

The fall-off in farmers paying the levy in the dairy and mart sectors is not thought to be as large. Two big dairy processors said the decline in levy payments, which are deducted from all farm sales to co-ops, processors and marts, was not significant.

Levy

In March, the IFA reported a 12 per cent decline in revenue from the levy across all sectors not just beef, but nothing like the mass opt-out some had predicted in the wake of organisation’s high-profile pay debacle last year.

Larry Goodman’s ABP group, however, upped the ante last week by ceasing the automatic collection of the levy.

In response, the IFA accused the Goodman firm of sabotaging its funding and cancelled the ABP’s authorisation to collect the levy, effectively jettisoning up to €300,000 in contributions from ABP suppliers.

There is growing concern within the IFA that other processors may follow ABP’s lead in shifting the onus on farmers to contact processors if they want to pay.

About a third of the IFA’s €13 million annual income comes from the European Involvement Fund (EIF) levy, which was ostensibly set up to fund the group’s lobbying operation in Brussels.

Rumbling disquiet about how the levy is collected has ratcheted up since the IFA’s pay debacle last year.

However, the fractious relationship between the beef industry and the IFA may also be factor in the variation in opt-out rates.

In 2014, the IFA organised blockades of meat factories in protest at what farmers claimed were low cattle prices and the significant variation between prices here and in the North.

The IFA also claims Mr Goodman’s move was motivated by the group’s opposition to ABP’s planned acquisition of 50 per cent of Slaney Meats. The claim is strongly denied by ABP.

Deal

The Slaney deal, if cleared by competition authorities, will give ABP control over a quarter of the beef processing sector in Ireland.

An IFA-commissioned report submitted to the competition authority is understood to suggest that the proposed Slaney deal is likely to weaken competition in the processing sector here by making co-ordinated effects in the relevant markets more likely.

IFA president Joe Healy said earlier this week that many farmers and processors had been in contact to express their support for the stance taken by the IFA.

The organisation is also facing a possible showdown with former general secretary Pat Smith, who is suing his former employer over a €2 million severance package agreed prior to his departure, which was subsequently withheld.