Farm Ireland
Independent.ie

Wednesday 18 October 2017

IFA grid audit 'flawed' without 'full transparency' -- Thompson

Martin Ryan

The RECENT audit of the quality payment system (QPS) for cattle is "worthless" until the IFA delivers "full transparency" on the figures and methodology involved, Limerick vice-chairman David Thompson has claimed.

In a move which has the potential to cause serious rancour within the organisation, Mr Thompson called on IFA president John Bryan to stop the association "treating farmers as fools" on the controversial grading system.

The Limerick official told a county IFA executive meeting that farmers had major concerns about the audit because of what he described as "discrepancies and inadequacies" in the figures produced.

But the IFA has strongly rejected Mr Thompson's claims, with senior officials in the association standing behind the audit.

The audit was carried out by Deloitte on behalf of the IFA and found that the QPS grid had had a positive impact on cattle prices compared to the former grading system.

These findings have been questioned by Mr Thompson.

"The president was not involved in the drafting of this grid as I understand it, and if he wishes to say that it should be renegotiated that may be the way to go ahead rather than leaving it as it is. But I do think that the Deloitte report is trying to make fools of us," he said.

While the IFA/Deloitte Audit Report stated that the "actual kill" was used in the calculations, Mr Thompson pointed out that a large percentage of steers and heifers slaughtered during the six-week period of the audit earlier this year were not included.

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"There was more than 11,000 cattle between steers and heifers left out of the Deloitte report and that is a very large percentage of the kill. Let us have a breakdown of what they were and why they were left out of the calculations," he asked.

Mr Thompson also claimed that the manner in which the grade/price was published in the audit report was "totally unsatisfactory".

"It has been squashed into four prices and it is absolutely worthless as an audit if we cannot have full transparency," he added.

Figures

"There are 54 grade/prices on the IFA grid and they were pushed together into four prices in the audit. That is not good enough. We should have the price and number of cattle in each grade. Let us see the figures. We are entitled to have transparency."

However, Mr Thompson's assertions regarding the grid have been totally dismissed by IFA head office. In a detailed response, the IFA stated: "Deloitte has confirmed that the data used in the analysis is in agreement with the actual weekly kill numbers, weights and prices provided by the Department of Agriculture for the relevant conformation grades, U, R, O, P+, and fat classes 2, 3, 4L, 4, 4H and 5 for the period of the analysis, as outlined in their report.

"In addition, the Limerick IFA county executive has confirmed that the explanation provided at a recent meeting in Limerick fully satisfies any queries they had in respect of the Deloitte report.

"A summary of the Deloitte analysis confirms that for steers, the average price for U grades increased by €39.91/hd, or 9.32c/kg, under the QPS compared to the flat system. R grades increased by €13.21/hd, or 3.48c/kg, O grades decreased by €6/hd, or 1.83c/kg, and P grades did not change.

"The independent Deloitte analysis concludes the results of the analysis are conclusive and demonstrate that, for both steers and heifers, the total returns to producers, compared under two separate basis, are higher under the QPS than they would have been under the old flat system.

On the issue of the 11,000 cattle Mr Thompson claimed were missing from the survey, the IFA stated:

"The Department of Agriculture has confirmed that the differences between the official Department weekly periodic price report by category covering kill numbers, weights and prices provided to Deloitte and the published weekly kill figures are as follows:



  • The published weekly kill figures are based on 29 factories, whereas the official Department price report is based on 25 factories as four of the smaller plants do not report prices.
  • Reactor cattle are excluded from the official Department price reporting as they are not considered commercial cattle.
  • Factory-own cattle are excluded from the official price reporting data by the Department and if less than six cattle are slaughtered in any one category and grade, the data is excluded from price reporting.


However, Limerick IFA sources countered that the meeting referred to in the IFA statement was a 'private' meeting attended by a small number of selected farmers and not a formal meeting of either the Limerick county IFA executive or the county livestock committee. Farmers who attended the meting said that they had many outstanding issues with the QPS.

Deloitte declined to comment when contacted by Farming Independent.

Irish Independent