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The IFA announced today it had reached a settlement with Pat Smith in respect of two legal cases he had taken against the association.
Smith, the association's former secretary general, will receive a payment of €1.9m.
The IFA will also pay legal costs for both sides, which is expected to amount to a six-figure sum.
But how will this affect the organisation's financial performance?
The most recent set of accounts for the country's largest farmer representative association is for the 12 months to the end of March 2017.
During this period, the IFA saw its income fall below its expenditure, resulting in an operating loss of €1.4m. The previous year it made an operating profit of just over €960,000.
The accounts also show that the association set aside €750,000 as a legal provision for the case against Pat Smith.
Once this is included, the association made an operating loss of €2.1m.
Income stream
The main reason for the operating loss was a €2.7m decline in the IFA’s income stream, which was €16.2m for the period.
The income decline was a result of a fall in farmer levies (EIF) collected over the 12-month period ending March 2017. These levies are collected on milk, livestock and grain sales from farmers.
Membership levels were maintained, with income from membership fees increased slightly to €6m.
Expenditure was in line with the previous year at €17.7m, with €5.2m relating to staff costs and €6m related to the running of IFA Telecom. Professional fees increased by 50% to reach almost €1m during the year.
While the association recorded an operating loss last year, it has a healthy balance sheet, with assets of €16m.
Most of this is in listed shares and includes around €5m of shares in FBD.
Some €12m of these assets is held in a special reserve fund which was established in 1985 to be used under exceptional circumstances.
The IFA also owns a 50% share in the Irish Farm Centre office building. The building is valued at €2m.
It is likely that the IFA will use its special reserve fund to pay for the settlement of the case with Pat Smith.
Exclusive: IFA-Smith settlement to cost €1.9m
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