Business Farming

Wednesday 3 September 2014

Transparency demanded in rules for quality bonus

Declan O’Brien

Published 11/09/2013 | 05:00

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ICSA's Edmond Phelan
ICSA's Edmond Phelan

Farmer representatives have demanded greater transparency in the operation of the beef factories' In-Spec Quality Assurance (QA) bonus scheme after it emerged that a two-tier base price was being operated by processors.

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Reductions in the base price for cattle of between 10c/kg and 30c/kg have been introduced by slaughter plants for stock that did not come from quality assured herds.

Plants in the west and south were quoting a base of 380c/kg last week for cattle that were not from QA herds. This was 30c/kg below their quoted base price of 410c/kg and cost some suppliers up to €130/hd on finished steers.

ICSA beef chairman Edmond Phelan has reacted angrily to the move. He accused the factories of financing the recent increase in the In-Spec QA bonus from 6c/kg to 12c/kg by slashing the price of non-quality assured stock.

Under the terms of the quality payment system (QPS) or grid, a 12c/kg bonus on top of the quoted base is to be paid for all In-Spec QA cattle. However, factories now appear to be working off one base for cattle from QA herds and another for non-QA stock.

"It is unacceptable that there is now two base prices for beef in some factories, without any statement to inform all farmers that the beef grid no longer operates as it has done up to recently," Mr Phelan said.

Speaking to the Farming Independent last week, a spokesman for Meat Industry Ireland (MII) attributed the pricing changes to the collapse in demand for non-QA beef as a result of the horsemeat scandal.

However, Mr Phelan rejected this assertion. He said the stance currently being taken by factories would give the impression that it was somehow the non-quality assured farmers "who put horsemeat in the burgers".

"The horsemeat scandal had nothing to do with farmers; it was caused by shady practices further down the line. Yet while we see no serious sanctions applied to those who allowed horsemeat into the food chain, farmers who are not quality assured are taking a massive hit," he said.

Mr Phelan said there was some confusion regarding the quality assurance bonus for cattle being bought in the marts.

Farmers believed that an animal had to be resident on their farm for 70 days prior to slaughter in order to qualify for the 12c In-Spec QA bonus. He said some customers at marts who are quality assured could buy quality assured cattle and get the bonus if they kept the cattle for just 21 days.

"The real question is why there is any 21-day restriction provided that the animal has spent the last 70 days on one or more quality assured units," Mr Phelan asked.

"Farmers and marts suspect that this is being manipulated to reduce competition and the number of heavy cattle sold at the mart," he said.

"In Northern Ireland, there is a 90-day residency period before slaughter but the 90 days can be made up of any combination of days on one or more farms," Mr Phelan pointed out.

"If we had this system here, then sellers with heavy continental cattle might be more likely to show them at marts in the knowledge that there could be more competition between factory agents, feedlot owners, etc. Instead, we have farmers who are convinced that the only option is to go direct to the factory and take what you are offered."

The Bord Bia QA scheme is based on cattle being kept on any number of QA farms for 70 days prior to slaughter.

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