Farm Ireland

Tuesday 12 December 2017

Factory insurance charges costing farmers millions

ICSA's Edmond Phelan
ICSA's Edmond Phelan
Louise Hogan

Louise Hogan

Farmers should be fully informed on insurance charges at meat factories which are taking millions of euro out of beef cheques.

The ICSA has called for more information on the deductions. Factory dockets currently contain only scant details on insurance terms and conditions.

ICSA beef chair Edmond Phelan said the charge imposed is generally around €2.50 per animal, with some factories charging more.

"Cows or other animals won't be insured, or in some cases, are subjected to a much higher fee of €5 upwards," said Mr Phelan.

According to the ICSA, the charges may be costing farmers as much as €3.7m a year.

This is based on around 1.2 million prime cattle killed each year with an average insurance charge of €2.25, along with a further 200,000 cows at a charge of €5.

It stated charges varied at plants across the country, with some putting it at €1.50, others €2.50 and some charging €5 for cows.

"The benefit to farmers from this scheme is limited to carcase adulteration, which is highly unlikely in prime beef.

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"We want to see full transparency over how many animals have been covered by this where a problem arises," he said.

Mr Phelan said it was frustrating that factories have complete discretion over which animals are insured and which are put through at owner's risk.

The ICSA also said a new post mortem contingency charge of around €2.50 was being imposed by a number of meat factories.

However, Meat Industry Ireland (MII) said the charge was another name for the insurance and was made at the point of slaughter as a protection against the full loss of value in the event of condemnation of the carcase by officials.

It states the charge also covers instances where condemnation losses occur after the farmer has been paid in full. It stated the deduction has been "part and parcel" of trade at plants for years. "The deduction is not underwritten by an insurance company," it said.

"It is applied to the vast majority of animals."

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