Thursday 29 September 2016

IFA under fire on levy revelations

Presidential candidates back demands for reform of €5.3m fund

Published 16/02/2016 | 02:30

Reform is being sought by IFA presidential candidates on the controversial levies system.
Reform is being sought by IFA presidential candidates on the controversial levies system.

Farmers have demanded reform of the controversial IFA levies system following revelations that up to 10pc of monies collected by some organisations is going towards administration fees.

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The EIF (European Investment Fund) levy collected by marts, meat processors and dairies delivered €4.7m to the IFA last year and it has become a key issue at the IFA presidential election hustings.

"The current situation regarding the collection of levies for the IFA is totally unsatisfactory," presidential candidate Joe Healy has insisted.

"As a first step we should be more transparent in how we name the levy. It is called the EIF levy but in reality it is an IFA levy," Mr Healy told the Farming Independent.

"Confirmation that dairies, meat processors and marts are retaining differing percentages of the levy in administration charges confirms the urgent need for greater openness around this issue."

The other presidential candidates, Flor McCarthy and Henry Burns, have also backed calls for a reform of the levy system. Mr Burns said the levy was "controversial and that it does compromise us".

All three of the presidential candidates told farmers at the hustings in Waterford last week that they had understood that the factories weren't retaining a percentage of the levy.

Charges

However, the IFA, which received €4.7m out of the €5.3m collected under the EIF in 2014, clarified there were administration fees charged for the collection of the monies in some cases. A member of Cork Marts committee said the mart charges 10pc of the monies collected in administration fees, with €160,000 to €170,000 collected in levies last year.

ICOS confirmed there were administration charges in place to cover the collections of the levies and this was decided upon on an individual basis in each mart. Glanbia stated it deducts 3pc of monies collected to cover administration costs. ABP's administration charge is understood to be below 5pc.

The IFA confirmed levies received from outlets comes with scant information on the number of animals, volume of milk or grain levied.

However, despite calls for transparency from members on all funding, the association has refused to give details on any charges imposed by dairy processors or meat factories.

The farm body said that "a process of stronger controls" was being put in place and details would be given to the executive council running the IFA.

"Procedures have been established, which will provide further reassurance and transparency to our members regarding the collection and administration of fees while not compromising data protection rights," a spokesman stated. "Over 200 outlets nationwide provide a levy-collection facility for farmers and most charge no fee."

Presidential candidate Henry Burns said he accepted there was a problem with "perception" and that the levy was in some way "controversial and that it does compromise us".

However, he added alternatives such as a levy on single farm payments or tags would not work either so the options might mean a rise in membership fees.

A reform of the levy system was also supported by Flor McCarthy.

Mr McCarthy said that members want an organisation that is funded but perhaps not to the same level.

Mr Healy said there was no clarity on the levies and farmers require "absolute transparency".

"The levies were farmer members' money," he said. "Members deserve full disclosure on administration fees being charged. We owe it to members to examine it in detail and if there is an alternative way of collecting money then we go that way. I can undertake to absolutely examine an alternative way. Some have already spoken by stopping their levies," said Mr Healy.

"Farmers haven't a clue when they sell cattle if everything that is stopped on their cattle is being paid over to the IFA? Is everything that was stopped on the litre of milk being paid over to the IFA?"

The EIF levies - set up in the 1970s to help fund the IFA presence in Brussels - are automatically deducted but farmers can ask for them to be stopped.

An ICOS spokesman said there were administration charges in place to cover the collections of the levies and this was decided upon on an individual basis by the marts. All have different cost bases for collecting it with the charges varying from 3pc up to 10pc, said the spokesman.

A spokesman for Cork Marts said they have been collecting the levies for decades and it was a "high volume transaction". He said the fees charged by individual marts were mainly in the range of 7.5pc to 10pc.

In 2014, over €5.3m was collected in levies in factories, milk processors and some marts. Dairy accounted for €1.9m, with €1.5m from levies at beef factories.

The IFA took in €4.7m, while Macra received €332,000 from milk levies collected by the IFA.

The ICMSA received €1.4m through milk levies and memberships, with almost all farmers signing to have the levies deducted. It received €170,000 in levies at beef factories.

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