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Calls for investigation into ‘unwarranted’ factory insurance deductions

Apr 29, 2016 | ICSA in the Media | 0 comments

Agriland 23 March 2016

The Irish Cattle and Sheep Farmers’ Association (ICSA) beef chairman Edmond Phelan has said that many farmers believe that the deduction is a ‘rip off’ and ‘totally unwarranted’.

Moreover, Phelan said insurance products are regulated by the central bank and ICSA wants to know if this product is properly licensed or regulated and if not, why it is allowed to continue.

“There is no information on factory dockets as to the terms and conditions of this insurance,” he said.

According to the ICSA, the charge imposed is generally €2.50 per animal but there are some factories charging even more.

It says cows or other animals deemed high risk won’t be insured or in some cases, are subjected to a much higher fee of €5 upwards.

ICSA estimates that this is costing farmers over €4 million

“The benefit to farmers from this scheme is limited to carcass adulteration which is highly unlikely in prime beef. We want to see full transparency over how many animals have been covered by this where a problem arises, and to what extent.

Where adulteration occurs (e.g. lesions or dark colour in the carcass) the carcass is thrown in the skip and the farmer still gets paid.

The ICSA says that in some cases, there is only a need to dispose of quarter of the carcass so that the actual net benefit to the farmer is of the order of €300-400.

“We suspect that there is substantial profiteering on this scheme which is run by processors. Is there any evidence that the scheme is underwritten by insurance companies or is it simply a way of taking money off farmers by factories?

“What is even more frustrating is that factories have complete discretion over which animals are insured and which are put through at owner’s risk. This is having your cake and eating it. In practice, animals most likely to be okay are charged insurance; animals with a somewhat higher risk of being condemned are not insured.”

“When you look at it from the point of view of farmers, it is highly likely that it represents a very over-priced product relative to the risk and it is time that the whole process is examined independently. If it is a legitimate insurance product, it should be regulated, if it isn’t it shouldn’t be allowed,” Phelan said.

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