Farm Ireland

Saturday 18 November 2017

Legality of IFA levy collection drawn into question again

IFA President Joe Healy leads farmers on a protest at the Department of Agriculture on Kildare Street. Picture: Finbarr O'Rourke
IFA President Joe Healy leads farmers on a protest at the Department of Agriculture on Kildare Street. Picture: Finbarr O'Rourke

Martin Ryan

Securing the future of the €4.7m income for the IFA from commodity levies could become a logistic challenge for the association as the legality of the current procedure is drawn into question.

Senior members of the IFA are now describing the deductions from farmer payments, without the consent of the producer as "a grey area" legally which the organisation will have to further address in restoring creditability to the collection of the funding.

"It has long been a contention among producers that the deduction of a non-statutory levy from their payments for produce by processors, without their consent, was at best legally questionable, and probably would not stand up in court"  a prominent farmer (who asked for his identity to be withheld) stated.

"They were taking money without the individual farmers consent, or a legal entitlement under statute, and that could not have been right, but they always got around it by claiming that any farmer who did not wish to pay could apply to the association for a refund, and some farmers who tried it found that it was not as easy as suggested", he added.

Munster Chairman, John Coughlan has now told farmers in the province that while the recent review of funding for the association found that the levy system should be retained "some changes in how the levy is operated" may be necessary.

The levy is currently collected on produce sales to co-op's, meat factories, and livestock throughput at marts, etc at 15 cents per €100 by deduction from farmer payments.

Going forward, Mr Coughlan says "we may have to canvass the individual membership to sign up to the levy" if it is to continue to be  collected.

While it is believed that some of the dairy processors requested written consent for the deduction of the levy at some point in the past, a spokesperson for one of the major processors dismissed its validity to-day.

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"There have been so many changes, including generational changes in suppliers, tracing any written authorisation that we got for the levy would be virtually impossible", they stated.

Some beef processors accepted written request from suppliers not to deduct the levy, while others insisted on making the deduction, to be passed on to the IFA, and advised any supplier objecting to apply to the association for a refund.

Three years ago, ABP, made available in each of their factories, a simple declaration for any farmer not wishing to pay the levy to complete, instructing the company not to make the deduction.   Last year ABP wrote to each supplier advising that the deduction would only be made if the farmer returned written consent.

Following the issues within the association in November 2015, the income from levies is understood to have declined by up to 15%.  While the drop in areas of the country with strong affiliation to the association was described by mart managers as "minimal" of less than 5% of farmers opting out,  the indication from other areas was that the number of livestock farmers paying the levy had declined to about one third.

The levy represents more than one-third of total income for the association and remains vital to the annual funding model to meet current expenditure.

If it is deemed necessary that the current 88,000 membership will have to be individually canvassed for to sign up for the deduction, the challenge for the association will be a formidable one in the current climate of adverse reaction to the issues on expenditure revealed in 2015.

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