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Saturday 10 December 2016

Arrogance and hubris behind IFA pay scandal

A year ago, they denounced, denied and deflected when asked to reveal secret megabuck pay deals

Published 29/11/2015 | 02:30

Ignominious end: Eddie Downey resigned as president of the Irish Farmers' Association on Wednesday evening
Ignominious end: Eddie Downey resigned as president of the Irish Farmers' Association on Wednesday evening
Pat Smith, who quit as IFA General Secretary last Thursday week

Charlie Haughey was an arrogant young Minister for Agriculture in a sharp suit when he dismissed any notion of ever meeting the leaders of a fledgling farmers' group called the National Farmers' Association face-to-face. Haughey dismissed them as "pipsqueaks".

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The year was 1965 and Haughey's belligerence galvanised farmers around the country at a time when agriculture was on its knees. Some 30,000 farmers marched on the Dail. A hardy group of nine farmers staged a blockade of Government buildings for some 21 days and the government caved.

That was the birth of the Irish Farmers' Association - a grassroots movement founded on principles of giving farmers a voice, firstly at home, and, as the years went on, in the European corridors of power.

But somewhere along the line the once lean and 'people power'-driven ethos of the IFA changed. They became as far removed from the small West of Ireland farmer as the Italian-suited bureaucrats of Brussels sipping espressos in sidewalk cafes.

The organisation, now ensconced in a plushly-appointed fortress on the Naas Road, became as arrogant as Haughey back in the day and, unknown to its 88,000 members, key members of its executive were fattening themselves up like Charolais bullocks on the plains of Meath.

Now the IFA is holed at the waterline, brought down by hubris and self-regard.

Among the political class there is barely concealed glee. Ministers, shadow spokesmen, women and ordinary TDs became heartily sick of being summoned down to Buswells Hotel by the IFA to be kicked around the place. They kept their mouths shut at these regular humiliations, fully aware of the immense political power of the farmers.

The last 14 days have shattered that pillar of Irish life.

The drama that has played out on the airwaves over the last 10 days has captivated, exasperated and angered in equal measure.

It has resulted in the departure of the association's president, Eddie Downey, and general secretary, Pat Smith, and has brought the country's most powerful lobby group to its knees.

The reach of the IFA means that this is a truly national scandal.

It has 88,000 members spread across every townland and parish in the country. For the past week little else has been spoken of in rural shops and pubs from Carndonagh to Cahir. Marts have been packed - not just by those buying and selling weanlings, in-calf heifers and steers, but by farmers who just wanted to get the latest intelligence on the megabucks wages scandal and vent absolute fury.

Trust and confidence in the association's leadership has been shattered and farmer members appear intent on clearing out the current leadership.

Even so, shock waves pulsed through the sector when Downey bowed to the inevitable and resigned last Wednesday night.

His departure followed confirmation that Smith, who fell on his sword the previous Thursday, received close to €1m in pay, pension and bonuses for 2013 and 2014. The admission that the former general secretary also secured a €2m golden handshake before leaving sealed Downey's fate.

It has been a spectacular fall from grace for an organisation that just last January packed Dublin's Convention Centre for a glitzy celebration to mark the 60th anniversary of its founding.

That day the nation's great and good were among the 1,700 invited guests. They heard EU Agriculture Commissioner, Phil Hogan, laud the IFA as one of the most successful movements, not just in Irish society but in the "whole of Europe".

The association should be "held up as an example of how citizens can organise and unite to advance their common goals," he told the audience.

But while the quick-fire pace of events over the last 10 days has taken many by surprise, this was not a spontaneous revolt or a planned coup.

The truth was dragged kicking and screaming from the IFA and the events that brought down the IFA's leadership have been building for some time.

The controversy has its origins in the resignation of Con Lucey from the association's audit committee in 2014.

A hugely respected figure within the IFA, Clare native Lucey was the organisation's chief economist for almost 30 years. He retired in 2008 but returned to head up the body's audit committee.

In August 2014, Lucey wrote to Downey raising serious concerns regarding what he considered "unacceptable interference" by Smith in the running of the committee.

In a subsequent letter to Downey, Lucey warned of the lack of accountability in the setting of remuneration for the posts of IFA president and the general secretary. Lucey argued that he was left with no option but to step down after Downey failed to respond to his complaints.

The move sparked unease among both the IFA's hierarchy and rank-and-file members. The IFA hung tough. They sought to deflect, deny and denounce.

The association refused ­repeated requests at the time from the Farming Independent to furnish details of Smith's pay and benefits package, and also the level of compensation paid to the IFA president annually.

In September 2014, the IFA told the Farming Independent: "The association confirms that its financial procedures are robust and that the day-to-day affairs are carefully managed by the financial controller, with final sign-off on all ­expenditures by the elected national treasurer."

It also pointed out that the association's financial affairs were independently audited by Deloitte.

But the issue of staff pay would not go away and the absence of clarity around the matter was cited by ­Carlow IFA chairman, Derek Deane, as one of the ­reasons for ­tabling a motion of no ­confidence in Smith at a meeting of the association's 53-member executive committee in January this year.

Smith survived that challenge comfortably but the battle between the two erupted once more when Deane, at another executive meeting earlier this month, read out the now infamous letter claiming that the general secretary's remuneration package was worth more than €400,000.

A majority of committee delegates once again supported Smith in the vote that followed but, with close to 20 abstaining, it was clear the tide was beginning to turn against the leadership.

With mounting pressure for answers, the dam finally burst after Deane's statement was released to the national media.

Some within the IFA have questioned Derek Deane's motives for pursuing Smith so vigorously. Suggestions of a personal vendetta have been rubbished by the Carlow man.

He has continually insisted that his difficulties with the former general secretary centre on issues of financial transparency and performance.

Deane's views would be shared by many inside and outside the IFA. While there is an acceptance that Smith was excellent commercially, many would argue that he was weak on policy and had a tendency to be too soft when negotiating with meat factories and dairy processors.

It is somewhat unfortunate that his undoubted ability to drive membership and launch successful commercial ventures - such as IFA Telecom, which generated more than €500,000 in operating profits for the IFA last year and €30,000 in director's fees for Smith in 2013 - will be overshadowed by his perceived failings.

Although very personable, Smith is described as intense and at times abrasive. This approach, allied to a tendency to micro-manage, did not endear him to all staff or to those members of the organisation who argued against official policy.

That discontent, that key sectors within agriculture were not being heard by the IFA top table, led a number of small representative bodies to break away from the association amid accusations that their interests were not being represented.

Meanwhile, Smith's weakness on the policy front was crucially highlighted during last winter's beef factory blockade.

The dispute was prompted by farmer anger at the introduction of penalties and deductions on cattle prices by beef processors. And although co-ordinated by the IFA top brass in the Farm Centre at Bluebell in Dublin, some farmers believed that Smith and Downey's support for the protest was lukewarm at best.

Indeed, at the time, some farmers refused to leave factory blockades after the protest was eventually called off.

Smith also faced criticism for his performance at the negotiations which followed the dispute.

"There was a feeling he didn't have a grasp of the finer detail," one participant observed.

So where to now for the IFA?

The immediate concern is the election of a new president, which must take place before the third week in January.

Many farmers interviewed over the last few days have called for a total clean-out of the elected officers. This is unlikely to happen, however. In fact, the next president will probably come from the existing executive committee.

Already the association's deputy president, Tim O'Leary, has thrown his hat in the ring. Though popular in his native Cork, O'Leary will struggle to distance himself from Downey's presidency. In addition, he will have to explain how he voted in this month's crucial executive committee meetings.

There is a belief that the current treasurer, Jer Bergin, will also enter the race, and a few more could yet come out of the woodwork.

However, all eyes will be on Derek Deane. Having forced the departure of Smith and Downey, the Carlow man would have to be the bookies' favourite to take the crown if he decides to run.

Whoever wins the election, and it may not be any of the above, will face a huge challenge in rebuilding farmer trust in the organisation.

A policy of full transparency on the remuneration of all senior staff and elected officials will have to be introduced at a minimum.

Members will not accept a situation where the general secretary is on a salary of €295,000 plus pension and bonuses. That's finished.

Similarly, the president's total stipend will be slashed from the €190,000-plus currently on offer.

The organisation will also need to become more responsive to the views of its membership, and adopt a 'bottom-up' management style rather than the 'top-down' approach that has landed it in this mess.

The funding model for the association will also have to be addressed. In disputes with processors over the past two years members have questioned the feasibility of a system that sees beef barons and milk processors collect €4.7m in levies for the association.

Farmers are already making their own minds up on this issue, with marts and meat factories reporting a growing number of farmers cancelling IFA levies. Should that trend gather momentum then the implications for the association are stark.

Will the IFA survive?

The association is not sinking yet but the IFA has been hit with a torpedo.

It has lost the trust of its members and it has lost its moral authority to beat politicians around the place in Buswell's Hotel on behalf of the "poor farmers".

Sunday Independent

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