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Friday 9 December 2016

Threat to pull IDB levy withdrawn by suppliers

Declan O'Brien

Published 31/05/2011 | 05:00

A proposal that farmers stop paying the Irish Dairy Board (IDB) levy from July 31 unless co-ops agreed to major changes in its shareholding and administrative structure has been withdrawn.

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The motion was proposed at a meeting of the Discussion Groups of Ireland in the Horse and Jockey Hotel, Co Tipperary, and led to some heated exchanges among delegates.

Kevin Twomey, chairman of the discussion group body, said the proposal had been tabled as a means of promoting debate and was now "off the agenda".

"We want to be constructive in the path forward," Mr Twomey said. "The important thing is agreeing the principle of an independently elected board."

A motion unanimously passed by the discussion groups' meeting called for the shareholding and board representation in the IDB to be transferred from its constituent co-ops to individual dairy farmers.

The proposal would see farmers pay their levy directly to the IDB, for which they would get a shareholding. Nine farmer members would be directly elected to the IDB board on the basis of 'one milk supplier, one vote'. This group would then nominate four additional board members.

The four co-opted members could be former dairy industry executives, who would have market and industry experience and expertise, Mr Twomey explained.

Executives working with companies and co-ops in the Irish dairy sector should not be considered, Mr Twomey added.

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He insisted that the board had to be independent and avoid the current situation where chief executives of co-ops sit on the IDB board but compete with it in certain markets.

Support for the proposal from both the IFA and ICMSA was now being sought, and Mr Twomey said he aimed to contact both organisations to meet with them and seek backing for the initiative.

Changes

A series of local meetings was being organised to inform discussion group members and build support for the changes, he added.

IFA dairy committee chairman Kevin Kiersey said the discussion groups' proposal was interesting. However, he cautioned that it should not become a distraction from industry consolidation.

"I share the frustrations expressed by the discussion groups' representatives about the slow progress with the industry consolidation project," Mr Kiersey said.

"I, too, want to see the IDB board have a single mandate for the overall industry without divided loyalties or conflicts of interests. However, it is a fact that few co-ops actually compete on markets against the IDB, which over recent years has increased its handling of butter to 70pc of national production, cheese to 80pc and powder to 50pc," he said.

"In a consolidated industry, we need a stronger link between the IDB and processors. Removing the representation of co-ops and plcs around the board table may weaken that link, unless it is done as part of a much broader industry agreement, which I believe is where the KPMG study must lead the industry," Mr Kiersey insisted.

The IDB refused to comment on the Discussion Groups of Ireland proposal.

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