The IFA could be about to lose a big chunk of its funding
ABP Foods, the largest beef processor in the state, will no longer automatically collect a crucial levy funding the farming body.
IRELAND’S LARGEST BEEF processor has written to suppliers to inform them that it will stop automatically collecting the levies from farmers that help fund the Irish Farmers’ Association (IFA).
At the moment, beef processor ABP Foods automatically deducts a levy – called the European Involvement Fund (EIF) – of 15 cent for every €100 in sales from each of its suppliers.
ABP has written to suppliers to inform them that under the new system, levies will only be collected from farmers who opt in to pay the tariff.
Responding to the decision by ABP to change its levy collection methods, IFA president Joe Healy said he has written to the beef processor’s owner Larry Goodman and asked him to suspend the collection of the levy entirely.
“ABP will not dictate how the IFA represents farmers or how farmers decide to support their association,” said Healy.
He added farmers are angry at the level of control Goodman’s ABP has over the beef sector and “will not tolerate his interference in how they are represented”.
ABP commands a large portion of the beef processing industry in Ireland, with 22% of all beef processed by the group. This figure could increase to 28% if a proposed deal to acquire a 50% stake in Slaney Foods is approved by the Competition and Consumer Protection Commission.
Healy said he met with executives from ABP Ireland yesterday and talked about the IFA’s concerns over the group’s deal to buy Slaney, arguing that the deal could weaken competitiveness of the cattle buying market in Ireland. He added that he also discussed ABP’s collection of the IFA levy.
An ABP spokesperson told Fora it decided to change the system for collection of EIF levies from farmers based on requests from its suppliers.
ABP's Larry Goodman
IFA funding
According to the IFA’s annual report for 2015, the EIF levy accounted for about 40% of the association’s operational income and “significantly contributes” towards the representation of Irish farmers at an EU and international level.
The association’s most recent accounts show that it had an income of nearly €13 million in 2014, with the levy accounting for €4.7 million of its income. Other sources of revenue for the IFA included membership subscriptions and other business interests in insurance and telecoms services for farmers.
Other agricultural organisations also collect funding from the EIF levy, however, the IFA commands up to 95% of money generated from the tariff, while the Irish Creamery Milk Suppliers’ Association receives €100,000.
The IFA has been criticised in the past for the its reliance on the EIF levy collected by meat factories. It has been claimed by members of the farming body that due to the importance of the tariff to the IFA’s annual funding, the organisation has a weakened hand in negotiations it holds with processors on behalf of its members.
Earlier this year, the IFA predicted that income from levies will decrease by 12% this year due to farmers opting out of the voluntary EIF tariff. It said this will result in a €564,000 decrease in income for this year.
