This Wednesday, Minister for Agriculture Simon Coveney signed legislation giving legal recognition to POs in the beef sector – a key recommendation of the Beef Forum. Beef farmers can now band together and negotiate collectively with meat factories for better terms and prices for their cattle – without breaching competition law.

Setting up a PO

In order to set up a PO, the organisation should gauge interest among local beef farmers and other interested parties. A minimum of 20 members is needed to set up a PO, all of whom must be active beef farmers.

Once set up, statutes must be drafted and made available for adoption by members in a democratic vote. This sets out all the rules of the PO, from membership fees and budgeting, to nominating members to negotiate with a factory, and rule amendments.

Each member must have equal voting rights and an equal shareholding in the PO. The Department will propose an adjustment to the Rural Development Programme for funding to assist POs with drafting statutes and other startup activities.

The PO must then register as a legal entity with the Companies Registration Office and apply to the Department for recognition.

Running a PO

  • Annual membership fees, rather than a one-off payment, should benefit POs when starting up. This makes the process of joining less onerous on members and minimises disruption of cashflow. The minimum period of membership may not be less than one year.
  • It is strongly advised that the PO should request that members contribute a minimum of 75% of the cattle they dispose of annually to the PO. According to the Department, feedback from existing groups has shown that this is essential for PO cohesion and the success of the group.
  • Marts are already legal entities through their co-operative structure. POs should be aware where this infrastructure already exists and may consider capitalising upon it.
  • POs should consider appointing or hiring a dedicated employee to fulfil administrative, logistical and financial duties.
  • An AGM is the best way to communicate information to members. An annual report will help foster a sense of transparency among membership.
  • Members should be able to access information on past prices, bonuses, etc, achieved in order to compare with national prices. POs should also ensure that up-to-date information is distributed promptly to members regarding optimum weight, spec, age, etc. These could be distributed via a members-only website section, in an annual report or upon request.
  • Facilitating and encouraging activities not directly related to the sale of produce, such as training, group farm visits and discussion groups, can assist with incentivising loyalty and participation independently of market conditions.
  • A dedicated person to oversee kill days can provide added value and trust for members and provide a direct link with factories to discuss issues regarding specification.
  • Recognition is open to all beef farmers and PO members who wish to negotiate collectively with slaughterhouses. Protection is afforded under EU law.
  • Activities other than production can be outsourced (secretarial work, lairage, transport, etc) but the PO will remain legally responsible for the activity and its conduct.
  • PO/factory relationship

    Various approaches exist to the PO/factory relationship. Some groups will have an agreement with one particular factory, some will target a range of factories, while others might centre their relationship around a particular brand or product type (eg breed).

    Deciding on a clear strategy from the outset will make it easier for prospective members to evaluate the benefits of membership.

    No ‘‘one-size-fits-all’’ approach exists and the PO should tailor their activities according to the needs of their members and customers. They should also be conscious of the need to evolve, bearing changing market and industry conditions in mind.

    Public information

    POs must agree to inclusion on a register to be published by the Department. This register will contain information on geographic, breed or production details of the PO along with membership numbers and contact information.

    POs must facilitate periodic checks to ascertain that it is complying with terms of recognition on its activities by Department staff. It is envisaged that 5% of POs will be checked annually.

    For more detailed guidelines on setting up a beef producer organisation or to download an application form click here.

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    Producer organisations in the beef sector to be legally recognised