The financial accounts for the Irish Farmers Association (IFA) are back in the black as significant reductions in costs brought about by COVID-19 restrictions delivered over €2m of savings for the organisation.
The result for 2021 is an operating surplus of €1.54m, up from a deficit of €1.2m in 2020. The €2.7m turnaround has come mainly on the back of reduced costs with income remaining largely unchanged.
The most recent set of accounts published (to March 2021) show voluntary costs (money paid for replacement farm help for IFA officers) was down €700,000 to €431,878 as little or no in-person meetings took place.
Communications outlay dropped €232,000 to €264,645, while public relations costs dropped €400,000 to €151,866 – reflecting the fact that no public events or shows took place over the course of the year.
There were other big cost savings on items such as foreign travel, membership recruitment and the fact there was no presidential election during the accounting period.
IFA Telecom sales were up marginally, membership fees were up from €5.7m to €6.3m
As a result, total costs for the farmer organisation were down to €14.183m from €16.269m in 2020.
On the income side, overall income is up €535,000 to €15.73m.
IFA Telecom sales were up marginally, membership fees were up from €5.7m to €6.3m, while levies increased by €30,000 to reach €2.81m.
The membership fee increase reflects the first full year of the €10 per member fee increase.
Levies are calculated on the basis of €1.50 per €1,000 farm output. With commodity prices rising and milk output continuing to grow the fact that levies remained largely unchanged indicates a continuing decline in the number of farmers paying levies on top of their membership.
The accounts were accepted by IFA National Council at the December meeting this week
In 2016, farmer levies amounted to €4.2m. The 33% decline over the past five years comes despite a 70% increase in milk output from the dairy sector.
The accounts were accepted by IFA National Council at the December meeting this week.
Overall, we understand there was a general acceptance that the financial accounts reflect the exceptional nature of the year due to various lockdowns and that when normal expenditure resumes, the association would be just about operating at breakeven.
Fixed assets increased by €1.1m to €15.49m. Most of the uplift came from an increase in share values which had recorded heavy losses in the previous year’s accounts due to valuations being taken in the wake of a stock market collapse in March 2020.
Cash in hand increased from €1.586m to €3.170m, bringing net assets up €3.139m to €14.499m for 2021.
A significant chunk of the assets in the balance sheet is in the special reserve fund which was established in 1985 to be drawn down in exceptional circumstances only.
The fund now stands at €8.959m, up from €7.677m the previous year. In 2015, this multimillion war chest stood at €14m.
The margin from the IFA Telecom business has continued to narrow. At €5.7m in 2020, sales have fallen by 22% (€1.7m) over the past five years.
Over the same period, expenses associated with the business have fallen by 20% or €1.4m.
Overall, the financial contribution of the business (excluding share sale profits) to the IFA’s bottom line amounted to €150,000, a 50% decline on the year previous and down by up to €650,000 or 80% on the exceptionally strong performance recorded five years ago in 2016 (see Figure 1).
Competing in a highly competitive space and with big players such as Sky, Eir and Vodafone in the mix, the margin prospects for 2021-22 look challenging.
Additional restructuring costs involving a further three staff members cost the organisation €428,628, which was a follow-on from previous staff restructuring costs of €1.13m in 2020.
The remuneration committee agreed that the salary of the president should be €120,000 and that this would be reduced by any directors’ fees payable by outside bodies that came as a consequence of IFA office.
The deputy president’s salary is €35,000 and, again, is reduced by outside directors’ fees.