Letter to the editor: Issues with foal levy need to be addressed

I read with interest the article about the thoroughbred horse breeder on February 22 last. There were two issues I was particularly interested in.

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Firstly, the unfairness of the way the foal levy is collected and the irregularities and poor ethics in the way it is distributed. Horse Racing Ireland (HRI) charges the levy on the advertised fee of the stallion which is a false figure in my opinion.

In many instances, stallions trade at 20% or 30% lower than their advertised price and in some cases, at even greater discount.

There are also situations where people buy shares and breeding rights in stallions. In these cases the breeder would pay no fee for the stallion as they would have a right to cover the mare free.

There are others who would negotiate a foal share where a breeder would have a good mare but couldn’t afford a top proven stallion, and the stallion owner would provide the stallion and they would share the proceeds of the sale of the foal 50/50. In this case, only the breeder pays the full foal levy, the stallion owner pays nothing towards the levy.

Then there are those who go to a stallion for a fee of €10,000 but the agreement would be if the mare had a filly, the fee would be €5,000 but the levy is still charged on the €10,000 fee.

Cost to breeders

Weatherbys are demanding that the levy be paid at registration, which must be paid by July 31 each year, putting an unnecessary cost on the hard-pressed breeder.

The big breeders who use the higher price stallions have a cut off levy of €650 which is a €30,000 covering fee. For instance, proven sires that are in demand could cost up to €100,000 or more and they still only cost a levy of €650 – this is not equally proportioned.

If an Irish breeder uses a top English stallion, which could cost in excess of £150,000, and the foal is born in Ireland, the levy on this foal will only cost €250 because it is an English-based stallion. If a breeder in Ireland goes to a stallion advertised at €12,500, and he deals for that stallion for €8,000, his levy will cost him €250, the same as the two UK stallions above. This is a typical example of how unfair the levy is.

Alternatives

There are two alternatives. The first one would be to pay the levy on the invoice price of the stallion.

Alternatively, a breeder could pay a 1% levy at the point of sale, which is the way all other agricultural sectors pay their levies. 90% of breeders would favour the 1% levy at the point of sale as everyone would pay their fair share.

Everyone in the industry will sell horses at some stage, so we would all contribute. This would bring the same revenue and maybe even slightly more.

Distribution of foal levy

I feel that the distribution of the foal levy money which is approximately €1.5 million per annum, has some irregularities and poor ethical practices in how it is distributed.

The foal levy committee which distributes the levy, consists of seven members: three members of the Irish Thoroughbred Breeders’ Association (ITBA); two members of HRI Irish Thoroughbred Marketing (ITM); one Irish Farmers’ Association (IFA) member and chairman Jim Beecher, who is a retired Department of Agriculture official.

This money is distributed in three ways: half to the equine centre; one quarter to the ITBA; and one quarter to the ITM, whether they need it or not. Should these organisations not have to apply for what they need and not just be given quarter or half because it is there?

If breeders pay a foal levy of €1,000, €250 of this goes to the ITBA, but the breeder is not entitled to any benefits from them. However, if a person pays €100 membership to ITBA, they are entitled to all the benefits… is this fair?

Foal levy committee

ITBA has approximately 700 members made up of the bigger breeders and stallion owners and some of them are not even breeders; this is approximately 12% of over 6,000 breeders.

There is no annual report from the foal levy committee and no financial statement, as I have requested it under Freedom of Information (FOI) legislation and have been told there is none.

I applied back in February 2019 under FOI for the minutes of the meeting for the foal levy committee for October 23, 2018.

When I received these minutes I was shocked to see how the meeting was conducted. First of all, it didn’t seem ethical to me for five beneficiaries to be on a committee to give their respective organisations money. While the money was distributed, apparently ITM and ITBA members left the room for recommendations to be determined.

There was no-one left in the room except for the IFA member and the chairman – how can this be proper procedure?

Application by Weatherbys

The most worrying thing in the meeting was an application from Weatherbys for €81,000 for a 30-day notification project. Weatherbys is responsible for the registration of thoroughbred foals.

Back in January 2019, breeders received a flyer in the post for 30-day foal notification, where it said it was mandatory to blood and chip the foal within 30 days, which was incorrect, as confirmed by Department of Agriculture, Food and the Marine (DAFM).

How could Weatherbys need €81,000? Even if you had to chip your foal in 30 days or more, it would still cost at most, €150 by the end of July.

How are irregularities, and what I feel are poor ethics, allowed to go on in a semi-state body like HRI? In the last few months I have written to Minister for Agriculture, Charlie McConalogue, junior ministers for agriculture, Pippa Hackett and Martin Heydon, and all have failed to address the issue.

Finally until these issues are addressed people should be aware that you do not have to pay the foal levy to register a foal and Weatherbys has to register your foal when you send in your paperwork and appropriate registration fee.

From Gerry Callanan, Co. Kildare.