IFA to draw on reserve fund to settle Smith case
Total cost of package for former general secretary will be in excess of €2m
The Irish Farmers' Association will be forced to dip into its special reserve fund to pay a settlement to former general secretary Pat Smith. The final cost is expected to be in excess of €2m including legal fees.
Mr Smith is to receive €1.55m for his severance claim and €350,000 in relation to his defamation claim after the case was settled on the steps of the High Court.
The controversy over pay at the IFA saw Mr Smith leave his post as general secretary in November 2015.
The IFA has net assets of €16.3m, but the full financial fall-out of the controversy will be felt for years to come as European involvement fund levies - an important source of income for the IFA - have declined sharply in the last two years.
Levies have fallen from €4.18m in 2016 to €2.95m last year, with the IFA instructing ABP to suspend the collection of levies after the processor announced plans to introduce an 'opt-in' model for farmers.
However, the IFA maintains that the number of farmers declining to pay membership and levies has stabilised in the two years since the controversy.
The Association does not yet know the full cost of the legal fees for the case, but estimates are that the costs could approach €500,000, which pushes the total cost of the settlement well beyond the €2m mark. The fees from Mr Smith's legal team will be sent to the Taxing Master at the High Court for assessment.