Compulsory tag levy for farmers on the horizon

The introduction of a compulsory tag levy is on the horizon for farmers, industry sources have confirmed to AgriLand.

Last November, Irish dairy and beef producers were given the option to opt-out of the 38c levy applied on a set of tags. The monies collected through the levy are used to support the Irish Cattle Breeding Federation (ICBF).

However, in a u-turn of events, it has now been confirmed that the levy will become compulsory once again from the beginning of November of this year.

A return of the 38c tag levy seems like the most plausible scenario, with farmers expected to continue to be able to opt-out of the levy until the end of October 2017.

As it stands, farmers are able to choose whether or not they want to opt-in or opt-out of the tag levy.

But a deal between the ICBF and the Department of Agriculture, Food and the Marine would see all three cattle tag suppliers collect the levy from farmers.

Since farmers were given the option to opt-out of the tag levy, thousands have voted with their feet and chosen not to support the ICBF through the levy-funding model.

Between October 1, 2016 and March 31, 2017, a total of 50,623 herd keepers ordered 2,057,116 bovine tag sets.

Out of this total, some 25,069 of them – representing 1,091,238 tag sets – opted not to pay the voluntary ICBF levy. This meant that just over 49% of farmers had opted against paying the levy in that six-month period.

Should the ICBF tag levy be made compulsory?

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However, the latest decision to reintroduce the tag levy contradicts the opinion of many Irish farmers on the ground.

The reintroduction of such a levy poses questions as to how the ICBF is viewed by farmers and how the supposed benefits it brings to the Irish beef and dairy industries are held by farmers.

In an AgriLand poll carried out last November, some 63% of readers voted in favour of opting out of the tag levy – once it was no longer compulsory.

In 2014, the ICBF collected in the region of €855,000 through the levy. In the ten years prior to 2016, it is estimated that farmers paid more than €750,000 a year to the ICBF when ordering cattle tags.

‘A farmer-led body’

Commenting on the reduction of tag levies witnessed during the 6-month period between October 1, 2016 and March 31, 2017, Minister Creed said that it had lead to “major uncertainty” with regard to funding.

“The ICBF was established in 1998 following a number of years of industry consultation among all stakeholders in the cattle breeding industry.

“It is the only body approved under EU legislation to carry out testing, genetic evaluation and publication of breeding values for Irish dairy and beef cattle.

“The objective of the ICBF is to achieve the greatest possible genetic improvement in the national cattle herd for the benefit of Irish farmers and the national dairy and beef industries.

It is a ‘farmer-led’ body receiving its funding from a number of sources including farmers, the breeding industry and with state support. A critical funding source has been the tag levy.

In April of this year, Minister Creed added that solutions to the financial issues within the ICBF were being explored.