Some farmers are struggling to secure payment for stock traded off the land. In cases, payment has yet to be received for animals that left the farm more than six weeks ago. The Irish Farmers Journal has been contacted by affected farmers. The level of financial and mental strain on these farmers is intense.

Most were under the impression that payment for stock was secured on the basis that they would receive a cheque from the mart with which the agent/buyer had developed a public association. While this type of brokerage arrangement has gained traction, farmers are now realising that it does little to safeguard payment.

Over the past two years, the majority of marts have tightened up credit terms in response to legislation introduced under the Property Services Act (PSA) 2012. However, it appears that a small number of marts saw the move as an opportunity to attract new business by offering some clients a much more flexible service.

In our opinion, this flexibility extends to sacrificing the very core principles on which the live mart system was established: a secure and transparent method of selling stock. We understand that in some cases animals were moving directly off the farm to the agent having never actually passed through the mart premises. In these cases, marts were merely acting as a broker, completing the movement of animals and issuing payment – a service for which the seller was charged a commission fee.

Obviously such an arrangement only works as long as the relationship between the agent/buyer and the mart remains in place. Farmers get caught in the middle if these relationships unravel.

As we highlighted in the Irish Farmers Journal, the PSA legislation only guarantees the seller payment where animals are auctioned through the mart. It does not apply where a mart is providing a weigh-and-pay service or to a brokerage arrangement.

The Irish Farmers Journal understands that where a mart is providing this brokerage service, a certificate of compliance is being used to transfer the animals from the seller’s herd to the buyer’s herd.

While a Department of Agriculture-approved process, the hard copy certificate clearly requires the signature of both the buyer and seller for the movement to be validated.

There is a clear onus on the Department of Agriculture to ensure compliance certificates are processed correctly. Any audit must ensure that in all cases the seller gave consent to animals being transferred from his herd. Where this was not the case, the mart facilitating the transaction without the clear consent of the seller has to be held liable for any payment.

The PSA regulator has a role to ensure all marts are complying with regulations. They have been in place for over two years and must be prepared to take action in cases of non-compliance. We cannot have a scenario where marts in compliance are at a competitive disadvantage. Nor can we allow marts to get around regulations by adopting a business model which leaves farmers fully exposed when it goes wrong.

If necessary, legislation should be amended to cover all business activities associated with the trading of livestock through the mart. Mart committees and auditors should be fully aware of their role in ensuring compliance.

Meanwhile, farmers opting to trade off the land need to put more value on security of payment. It is only when payment is in doubt that the value of such a safeguard is evident. There is no reason why any buyer/agent should object to funds being transferred electronically into the seller’s account before stock moving.

The Government should also explore the option of requiring registered dealers to be fully bonded.