A row has broken out between the Irish Farmers’ Association (IFA) and Larry Goodman’s ABP group that could have serious financial implications for the farmers’ organisation.
In a surprise move, ABP, the State’s largest beef processor, has decided to stop the automatic collection of levies from farmers, which go towards funding the IFA and other groups.
The company has written to suppliers informing them that from now on the European Involvement Fund (EIF) levy – also known as the factory-gate levy – will be operated on an "opt-in" basis, meaning farmers will have to notify ABP if they want to pay it.
The move is being seen by the IFA as an attack on its funding model in retaliation to its opposition to ABP's planned acquisition of part of Slaney Foods.
ABP described this interpretation as “disingenuous”.
The acquisition, if cleared by European competition authorities, would give ABP control of over more than a quarter of the beef processing industry here.
The IFA responded to ABP’s move yesterday by instructing the company to suspend the collection of the levy on behalf of the organisation “with immediate effect”.
"Farmers who are angry over the level of Goodman control of the beef sector will not tolerate his interference in how they are represented," IFA president Joe Healy said.
Mr Healy linked ABP’s move to a recent IFA-commissioned report, submitted to the competition authorities, raising concerns about the ABP’s Slaney acquisition.
“ABP will not dictate how IFA represents farmers or how farmers decide to support their association,” he said.
The EIF levy is automatically deducted on all farm sales to co-ops, processors, marts and merchants and equates to about 15 cent per €100 in sales.
ABP collects an estimated €400,000 annually in EIF levies, the lion’s share of which goes to the IFA. EIF levies account for about a third of the IFA’s annual €13 million budget.
The financial implications for the IFA of ABP’s move could be even greater if other processers follow suit.
In a statement, ABP, however, claimed the IFA was being “disingenuous” in linking its levy decision to the Slaney competition approval process.
The company said it was changing how it administered the levy in response to farmers’ requests.
“Based on farmer requests over the past several months regarding the collection of the EIF levy, ABP had decided not to make EIF levy deductions unless requested by the farmer to do so,” a spokesman said.
“ABP advised the IFA yesterday evening of its decision and a letter was issued yesterday to ABP’s farmer suppliers. It is disingenuous to link this decision to the Slaney competition approval process which is ongoing with the relevant authorities,” he said.
Farmers will receive a form from ABP to be filled in and returned. If the levy form is not returned then no levy will be collected.