IFA and ABP levy row escalates fast

The IFA has withdrawn authority from ABP to collect levies. The action comes swiftly on the heels of the Irish Farmers Journal’s revelation that Ireland’s largest beef processor, owned by Larry Goodman, was changing its levy system from an “opt-in” where levies were collected on the presumption of consent unless farmers expressly withdrew that consent.

The country’s largest beef processor is changing the way it administers levy collection – a hammer blow to the IFA and the ICMSA. Larry Goodman’s ABP Group is contacting their thousands of farmer suppliers to explain the new system, which will inevitably result in a significant reduction in the levies collected by the Goodman Group on behalf of the country’s two largest farm organisations.

The European Involvement Fund levy yielded about €4.7m for the IFA in 2015. ABP collects an estimated €500,000 annually, split between IFA and ICMSA. On average, it is worth €1.80/animal slaughtered.

It has always been automatically collected unless a farmer specifically instructs otherwise. In a departure from that practice, ABP will now only collect the levy if instructed to do so in advance by farmers who supply cattle for slaughter to them – an “opt-in” system. A form will be posted to farmers this week to be filled in and returned. If the levy form is not completed then no levy will be collected on behalf of that farmer.

Listen to Irish Farmers Journal editor Justin McCarthy discuss Wednesday's developments in our podcast below:

The issue of levies has been a vexed one among farmers for some time, certainly since the beef protests of 2014. They are collected by slaughter plants, marts, milk processors and grain merchants.

The IFA is the main beneficiary, with ICMSA getting a share and Macra benefiting from the dairy levy.

The future of the levy was called into question in the wake of the pay revelation that saw the departures of general secretary Pat Smith and president Eddie Downey last November.

At the election hustings this spring, levies were raised nightly by IFA members. An initial review of the system carried out internally by IFA has concluded that levies in conjunction with affiliation fees are still the best and fairest mechanism of revenue generation.

Controversial

The levy system has been controversial for years. The beef blockade of 1999 saw farmers in the High Court, being fined punitively for refusing to leave factory gates.

Since then, whenever farmers and factories are in dispute over beef prices, the potential for a conflict of interest over the factories acting to collect levies on behalf of the farm organisations has been raised.

This was especially true in 2014, when pressure mounted right through the year for a farmer campaign against the price factories were paying. Some farmers claimed at meetings that the levies were protecting the factories from farmer action. This year, there has been sharp disagreement over ABP’s purchase of a 50% share of Slaney/ICM, with IFA staging a protest at Slaney meats in Clohamon and lodging an objection to the deal with the EU’s Competitions Commissioner.

Focus

Levies have been in sharp focus since the IFA’s pay revelations broke publicly last October. There were immediate stories of farmers cancelling their levies in marts as well as with slaughter plants. IFA said in March that levy income was down 12% compared to the same stage in 2015. Processor sources have previously indicated a much higher level of levy cancellation. Now this.

Read more

Will others follow ABP?

What do the developments on levies mean for farmers?

History of the EIF levy

Editorial: War of words between IFA and ABP