Spat will hurt IFA but could ultimately heal wounds
Published 19/08/2016 | 02:30
Why has the country's largest beef processor decided to back away from collecting levies for the farm organisations; and what are the long-term implications? These are the fundamental questions being asked this week following the very public spat between the Irish Farmers' Association (IFA) and the Larry Goodman-owned Anglo Beef Processors.
The levy at the centre of the controversy is the European Involvement Levy (EIF), which was originally introduced in the early 1970s, after Ireland joined the then EEC, to support farmer representation and lobbying efforts in Brussels. It has since morphed into a major income source for farm organisations - particularly the IFA.
The levy is set at 0.1pc or €1 for every €1,000 in sales at marts and slaughter plants; and 0.15pc of all milk sales.
In 2015 the EIF levy generated €5.3m in income for the farm organisations, with €4.7m going to the IFA.
ABP is not refusing to collect the levy - but the company wants farmers to provide written clearance to make the EIF deductions from cattle payments on their behalf. In response to the move, the IFA called on ABP to suspend all collections of the levy.
The company insists it is responding to farmer opposition to the levies, which stemmed from the revelations regarding the salaries, bonus and pension packages paid to IFA.
Collection of the EIF levies by the meat factories has been a hugely divisive issue within the IFA.Indeed, the matter was continually raised during the IFA presidential race earlier this year.
But the IFA maintains that ABP's actions were in response to its concerted opposition to attempts by ABP to take a controlling stake in Slaney Meats - a major beef and lamb processor in the southeast.
IFA's claims regarding the Slaney Meats takeover have been described as "disingenuous" by ABP. The deal itself has been referred to the competition authorities in Brussels and a decision is pending.
This latest spat marks a serious deterioration in relations between the IFA and ABP, with both sides appearing to dig in.
The implications for the IFA are serious. It has already endured the proverbial year from hell and will be back in the firing line this autumn when the action taken by former general secretary, Pat Smith, for close to €2m in severance pay and damages is due to be heard.
That controversy rocked the organisation and has hit membership and finances, with the losses involved rumoured to be in the region of €500,000 from an annual revenue of over €12.5m.
However, as one industry observer noted, "not all of the powder is in Larry's pockets".
Farmers know they need a serious representative body. This might just be the war IFA needs to heal a divided and fragmented organisation.