The IFA has confirmed recently its intention to not pay back levies paid by malting barley farmers through the compulsory levy collection scheme it has with major player of the market, Boortmalt.
The agreement is said to have been agreed between the IFA and Boortmalt just as the company began its operations in Ireland, and included a compulsory levy for farmers.
Currently the levy stands at 39cent per tonne and is part of every contract that Boortmalt has with Ireland’s tillage farmers. This means farmers have no choice but to allow the company to collect said levy on behalf of the IFA.
Last year, according to figures released by Boortmalt, the company bought in excess of 125,000tonnes of malting barley from Irish farmers. This is said to account for almost €50,000 of levies collected by the IFA last year. Boortmalt suppliers have the levy imposed on them, whether IFA members or not.
Previously the IFA had suggested that farmers could look to recoup levies paid however recently although they now say this will not happen. However, Deputy President of the IFA, Richard Kennedy, said these cannot be claimed back from the IFA. He said "Farmers cannot claim back the levy. A contract was agreed between Boortmalt and IFA when Boortmalt was set up in Ireland and part of that is a compulsory levy. The money cannot be got back now."
He added that the IFA felt they were entitled to collect and keep levies as they had carried out extensive work to help improve the tillage sector in the country, "IFA has grown the industry and farmers have benefited from the work IFA has done.”
A number of Ireland’s tillage farmers say they have written to IFA in recent years, with the idea of trying to claim back their levies, but that they have as of yet still received no response.
The 39cent per tonne levy already sees a 19c per tonne contribution being made to the IFA. 12c/t of this is given to UCD and Teagasc research while the remaining 7c/tonne is used to promote farm to farm trade through the IFA.
This news comes after the new IFA President, Joe Healy, announced earlier this year that any farmer not satisfied paying the compulsory levy could reclaim them, a statement which has been since gone back on. Mr Healy said at the time that “There is a process there and there is a time period on it, which has always been there, of a year…but there is a lot of people out there who want to pay a levy.’ , adding that “The new structure will give everyone the opportunity to pay the levy or opt out of paying the levy.”
The collection of the levy is written into the IFA’s contract with Boortmalt and they claim that “Every grower is made aware of the levy”.
Last year the IFA collected almost €5million in levies, including some from a European Involvement fund levy (EIF) which is collected for product sales to co-ops, meat factories, and livestock throughput at marts. The rates of above being 15cents per €100 made, and they were deducted from farmer payments.
These recent announcements or reneging of promised repayments come after the IFA announced losses in overall revenue for last year of 1.4million euros.