Jackie Cahill (Tipperary, Fianna Fail)
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I thank the Acting Chair for the opportunity to speak. I have been very involved with ICOS for a long number of years. I was chairman of a local dairy co-op a number of years ago and we went through a very successful merger with a neighbouring co-op that has worked out very well. Accordingly, I understand the workings of ICOS very well and have had hands-on involvement with it over many years. It is absolutely vital and has contributed hugely to the development of the agrifood industry in Ireland. Our successful co-ops owe a lot to ICOS. Whether it is livestock marts, dairy co-operatives, etc., co-ops are an integral part of the agrifood industry.

I have a few points to raise and am conscious this is still pre-legislative scrutiny. I put on record I am still a member of a dairy co-op. The legislation will require the rule amendments to get a 75% majority to be passed. That is excessive. A majority of two thirds or 66% is more than adequate to get a rule change. It should even be down as a simple majority. That is democracy. A majority of 66% is more than fair and raising it to 75% is excessive. I hope that will be addressed when we have the opportunity to submit amendments to the Bill. Requiring 75% to allow a merger to go through has already been discussed. As I said, I presided over one of these a number of years ago. I agree with ICOS that the danger is with getting the turnout for the second meeting. If we have a case where there is a majority of 75% or 80% at a first meeting then shareholders will get complacent. Getting them to turn out at a meeting two weeks afterwards will be difficult. This has stood the test of time and worked very well in practice. Once 75% vote in favour that is an overwhelming majority of shareholders from two societies proposing to merge. What has worked should not be changed. We should keep the 75% at one meeting rule in place and if there is a majority of less than that then by all means have the second meeting. That has worked so well we should have an amendment to get the legislation to reflect that.

The audit exemption is welcome for smaller co-ops. There are rural water schemes and so on that have very little money going through their books and an exemption would be good for them.

An audit exemption is good but it would be necessary for the sake of transparency that there would be an insistence, over a period of years, that every co-operative would be obliged to have an audit. For transparency for all shareholders, that should be in the legislation. Therefore the exemption should be there. To have the financial burden for smaller co-operatives to have an audit every year is wrong. It makes it difficult for some of the smaller co-operatives that have a small turnover. To spare grief into the future maybe every co-operative would have to have an audit every five years. That would be satisfactory.

The legal reserve is a new issue coming in with this legislation. I do not understand the reason for it. It will impose a legal burden if it is going to be a statutory requirement. I would like that to be looked at again to examine whether it is necessary to have that legal reserve in place for co-operatives. In regard to the number required to form a co-operative, I would not get exercised about that. At the end of the day a co-operative is bringing together a number of people to benefit a local community. Three seems to be a small number. Three would be more suitable to a partnership or a company rather than a co-operative. I believe seven would be a more realistic figure for a co-operative. However, I would not put the same emphasis on this issue as I did on some of the other points I made. Hopefully we will have the opportunity as this legislation goes through the Houses for some of the suggestions we have made to become amendments in order to get the legislation as perfect as possible. It was remiss of me to say that this legislation is long overdue. I commend the Department on bringing it to the table. Hopefully we can get it enacted into legislation as quickly as possible.

I was not asking many questions. I was making comments rather than asking questions.