While levies by their nature appear small per litre or value of output, when totalled across the sector more than €50m was collected last year. Dairy levies made up the largest amount, accounting for €24.6m, beef €21.5m, sheep €2.1m and tillage about €0.5m.

Our investigation finds that many levies have good governance in place where the amounts collected from farmers get passed directly to the collecting organisation. However, in other instances, there is no direct flow of money, which leaves the process open to manipulation.

Some levies are, in effect, voluntary for the farmer or the milk processor so there are differences between farms and processors.

Dairy

There are seven significant levies on milk and, typically for those farmers, paying all the levies it amounts to about €25 per cow per year.

For a farmer milking 80 cows it means a figure over €2,000 is going on levies. Dairy farmers paid almost €25m in levies in 2015.

Ornua levy

The Ornua levy (formerly Bord Bainne & Irish Dairy Board) is the most significant levy at 0.14c/litre on manufacturing supply to the farmer’s processor. It is a mandatory levy. For a 5,000-litre cow, it amounts to about €7/cow/year. It amounts to €7m per year.

The processor passes the full amount on to Ornua. It is on the full volume of milk processed by the other co-ops, even though Ornua is responsible for 60% of Irish exports. Ornua has visibility of the volumes processed by each processor and therefore has full control over the monies collected.

Given the current extremely low milk prices, Ornua suspended the collection of the levy earlier this year. It will reconsider the suspension of the milk levy when the Ornua Purchase Price Index returns to 103 (30.5c/l including VAT) for three consecutive months. All Irish processors are members of Ornua except Kerry Group, which funds and markets its own product. The levy goes into the bigger pot of funds to promote Irish dairy abroad and develop markets. Ornua pays a member bonus back out to each processor member which was €14m in 2015.

NDC levy

The National Dairy Council (NDC) levy is 0.07c/l. For a 5,000-litre cow, it amounts to €3.50 per year. It is a voluntary levy collected on liquid and manufacturing milk. Within a given processor, every dairy farmer may not contribute to the levy. The levy collects €2.9m per year for NDC. Currently 70% of the national milk pool contributes to the levy. Three major processors don’t fund the NDC – Lakeland, Tipperary Co-op and Dairygold. Dairygold stopped collecting the levy in 2006 when it stopped selling in the Irish milk market. Lakeland is actively involved in selling liquid milk in Northern Ireland and hence doesn’t necessarily want to promote dairy from the republic over Northern product. The levy is used to promote Irish dairy (milk, cheese and butter) in Ireland.

Dairy research levy

The dairy research levy is 0.036cpl and is administered by Dairy Research Ireland. For a 5,000-litre cow, it amounts to €1.80/cow/year. This is a voluntary levy and is collected on the full supply. Some of the smaller co-ops and liquid milk suppliers don’t contribute to it. The levy generates an annual contribution of over €1.6m collected from approx 95% of the manufacturing milk pool. The money funds research mostly based at the Animal and Food Research Centre near Fermoy, Co Cork.

Bovine disease levy

The Bovine disease levy is 0.06c/l. For a 5,000-litre cow, it amounts to €3/cow/year. This is a mandatory levy and is administered by the Department of Agriculture. It has full visibility of the litres produced by the processor. In 2015, the Department collected €3.8m from this levy in dairy. It was introduced to collect a farmer contribution towards the cost of eradicating TB and brucellosis. Ireland has successfully eliminated brucellosis while TB is ongoing.

Department inspection levy

The rate of the levy is 0.1c/l. For a 5,000-litre cow, it amounts to €0.50/cow/year. This is a mandatory levy and is administered by the Department of Agriculture. In 2015, €6.4m was collected under this levy. It is on all milk supplied to a processor. It is based on processor returns to the Department. Under the Milk (Miscellaneous Provision) Act, 1979, a levy is payable on all milk purchased for processing. The levy is intended to cover the cost of the Department’s inspection regime within the dairy sector.

National Milk Agency Levy

The rate of this levy is 0.115c/l. For a 5,000-litre cow, it amounts to €5.75. It collected €511,900 in 2015. It collects a levy on the volume of liquid milk purchased under contract, regulates the supply of milk for liquid consumption and ensures that contracts are fair.

EIF Levy

This levy is based the value of output. It is 0.15% of sales (litres produced by price). The EIF levy was introduced in the early 1970s as a means to fund farmer organisation activities in Brussels. The milk levy generates the largest share (37%) of the EIF, with €1.95m contributed by dairy farmers in 2014. The IFA receives 77% of this (€1.5m), with Macra receiving 17% or €330,000 and ICMSA receiving €117,000 or 6%. These amounts are net of a small administration charge held back by some processors to administer this levy.

Beef

There are six significant levies on beef and, typically for those farmers paying all the levies, it amounts to about €11/head/year. Beef farmers paid €21.5m in levies in 2015.

Veterinary inspection charge

This is a €5/head charge to cover the cost of veterinary inspection at factories. It amounted to €8m in 2015 based on a kill of 1.6m head. The EU has decreed that every country must charge a minimum of €5 for cattle. Irish factories pass this charge on to farmer suppliers.

Bovine Disease Eradication levy – BDE

The statutory BDE levy is €1.27/head. It amounted to €2.2m, based on the 2015 kill of 1.6m head. The bovine disease levy was introduced to collect a financial contribution from farmers towards the cost of the TB and brucellosis eradication programmes.

Bord Bia Levy – ABB

The Bord Bia Act 1994 provides for a levy on all cattle, sheep and pigs slaughtered within the State or exported live from the State. The rates of the statutory levies are €1.90 on cattle either slaughtered or exported live. It amounted to €3m, based on the 2015 kill of 1.6m head.

Insurance

This is a factory-imposed charge. Rates vary from between €1.90 and €3.00 on prime cattle and between €5 and €6 on cows. Based on an average price of €3/head, it amounted to approximately €5m based on the 2015 cattle kill. It is an arbitrary figure, charged by factories on cattle that they judge will be stamped by the vets on inspection as fit for the food chain.

EIF Levy

This levy is based the value of output. It is 0.15% of sales (tonnes by price). The EIF levy generated from beef (factories) amounted to €1.5m contributed by beef farmers in 2014. The marts collected a further €1m last year for the EIF levy (sheep and cattle).

The IFA receives €1.36m, with the ICMSA receiving a further €170,000. The IFA receives the entire EIF fund derived from mart sales.

Sheep

There are three significant levies on sheep totalling about 82c/head. Sheep farmers paid €2m in levies in 2015. Sheep farmers must pay a statutory veterinary inspection levy of €0.50/head.

This amounted to €1.3m in 2015, based on 2.6m head slaughtered.

The Bord Bia levy (AAB) amounts to €0.25/head and amounted to €650,000 in 2015.

There is also a statutory sheep Ireland breeding programme levy of €0.07/head which was €182,000 in 2015. The EIF levy figure is included in “other” but is similar at 0.15% of sales value.

Grain

There is only one significant levy on grain. This is the EIF levy which is 39c/t of grain produced. It is collected by the grain merchant/co-op and is optional.

A total of €150,000 was collected in 2015. The national crop is around 2.6m tonnes.

All of the money collected goes to the IFA. The IFA funds research with 15c/t going to Teagasc and UCD.

Read more

Levies back under scrutiny two months after June approval of status quo

Industry not following Goodman's lead

Levy collectors must stand over their accounts - Bergin

Levies back under scrutiny two months after June approval of status quo

Ongoing dispute sparks big reaction from farmers

Larry and the levies: the IFA responds

Don't reply to Larry's letter - Healy

Larry Goodman and the IFA - a history

The governance of all farm organisations

Editorial: ABP must now deliver full transparency