The Irish Creamery Milk Suppliers' Association is to sue the Government for failing to deliver tax cuts negotiated under the Programme for Prosperity and Fairness on milk quota purchases.
Announcing that the case against the Government and the Ministers for Agriculture and Finance had already begun, Mr Pat O'Rourke, the president of ICMSA, said he had been forced into recommending the unprecedented legal action.
Commitments made by the Government in the programme last year and enshrined in the Finance Act 2000 were not being delivered, he said, and 22,000 Irish farmers had already lost £20 million because of the failure to live up to its commitment.
"The Government negotiated a deal with us in the programme and we recommended it to our members. Since then nothing has been delivered. I would have great difficulty in recommending any new agreement to my members," he said.
Mr O'Rourke, who called on the other social partners for their support on the issue, said the will of the Dβil, which had agreed the tax measures, was being frustrated.
Initially, he said, the Government had said it could not sign the commencement order to introduce the tax relief because of court proceedings here relating to milk quotas. That issue was now resolved.
Now, he said, he was being told that the tax relief was not being implemented because of the European Union and he could not accept that the EU should have primacy over the will of the Dβil in the area of taxation. During the Nice Treaty debate the Government had always maintained this was the case.
The ICMSA, which has already lodged plenary summonses in the High Court in its own name and those of nine of its members, will indemnify those farmers against any losses incurred in the court action, which alleges breach of contract.