Government Accountability Needed In Beef Checkoff

05 Jul
Government Accountability Needed in Beef Checkoff

By Chris Clayton, DTN, July 4, 2011

In 2005, the U.S. Supreme Court ruled in a 6-3 decision that a mandated checkoff fee was not a violation of freedom of speech because the beef checkoff program constituted government speech.

Cattle producers had argued that their $1 per-head checkoff fee was going to fund political and marketing views that they did not believe. They lost.

Iowa State University agricultural law professor Roger McEowen wrote after that Supreme Court decision that a government-mandated checkoff must clear some key hurdles, one of which being that “the government must exercise sufficient control over the content of the checkoff to be deemed ultimately responsible for the message.” McEowen stated in his breakdown the Supreme Court decision, “The point is that if the government can compel a targeted group of individuals to fund speech with which they do not agree, greater care is required to ensure political accountability as a democratic check against compelled speech.”…

The beef industry is full of turmoil, political and market divisions. It’s actually a great reflection of the fact that cattle producers remain vehemently independent that allows them to be so vocal and ensure that the beef industry is vibrant even as just four packers control more than 80 percent of slaughter.

In other words, of all the livestock industries out there, the lone cattleman on his horse in a western ranch is as defining an image of American independence that there is today.

But given that the beef checkoff is government speech, there seems no better time for the federal government to step in and ensure that the checkoff is functioning at the most efficient, and most modern level for all U.S. producers.

Recent documents from the Cattlemen’s Beef Board and the National Cattlemen’s Beef Association reveal a wide-ranging rift over possible reforms and changes to the checkoff. Columnist Alan Guebert highlighted those problems last month, and posted related documents on his website.…

There are now questions regarding events that led to the resignation last week of CBB Chief Executive Officer Tom Ramey after 17 years working for the board. The U.S. Cattlemen’s Association sent a letter to Agriculture Secretary Tom Vilsack requesting a full investigation into Ramey’s resignation and into “emerging checkoff contractor compliance and funding management issues.”

The USCA cites more the finding now of at least $305,000 of misspent checkoff dollars, plus the loss of $200,000 because NCBA pushed last year for an NCBA-CBB meeting at a resort outside Washington, D.C., despite objections by the CBB executive committee. The $200,000 was the penalty for eventually breaking the contract.

These battles between the CBB and NCBA have grown since the Supreme Court made its decision. It wasn’t long after the 2005 ruling that there was talk about the need to raise the checkoff. The cattle herd has retracted, and the rate of inflation means that the $1 per-head fee doesn’t stretch as far as it did in 1985. Talks began about what it would take to raise the checkoff.

A survey conducted by Gallup in 2007 showed, however, only 6% of producers supported raising the checkoff while 79% wanted it to remain at $1. That same survey also showed 92% of cattlemen either strongly agree or somewhat agree that the checkoff dollars should be used only to promote U.S. born and raised beef.

If you try to open up the Beef Promotion and Research Act, it’s likely those Gallup results, and promoting U.S. raised beef, gets thrown into the mix. You can’t justify trying to raise the checkoff, and continue promoting generic beef.

Knowing this wasn’t going to make it into the 2008 farm bill, the set up for the Cattlemen’s Beef Board and NCBA was to have recommendations for checkoff changes ready, with industry support, for the next farm bill. That also means likely changing a clause that states that an organization must have existed before 1985 to contract for checkoff funds.

When the CBB detailed a proposal in 2009 to bring to USDA, and eventually to Congress for the farm bill, NCBA leadership balked. NCBA then began a restructuring process that would further tie the relationship between the Federation of State Beef Councils and NCBA.

It’s a confusing deal, but right now the state beef councils share a portion of the 50 cents they receive from the checkoff with the federation. Of the approximate $76 million collected annually, state beef councils receive approximately $35 million. The CBB then receives the other half, and NCBA is the contractor on about 90% of the CBB funds.

Consolidating power would have assured if the checkoff is restructured, NCBA’s funds would be protected through stronger ties with the federation. But other farm groups objected, leading the CBB and others to state that the federation and NCBA’s policy division should break ties and become separate groups. Well, too many members of the federation leadership serve on NCBA’s executive committee to break those bonds. The federation voted overwhelmingly last year to stick with NCBA.

And here we are — a financial power struggle between a USDA-appointed body (CBB) and it’s politically connected contractor (NCBA) over the right to control government-mandated fees from producers.

Given that the Supreme Court has ruled that the checkoff is government speech, it appears stronger oversight is needed to better delineate who is actually in control of these funds, and who should be allowed to spend them. The U.S. Cattlemen’s Association letter for a USDA investigation would suggest the Agricultural Marketing Service must step in. Yet, AMS staff are not exactly regulatory types, certainly not with the ability to weigh in on an politically sensitive fight such as this. Moving up the food chain doesn’t help because the USDA undersecretary for marketing and regulatory programs has been in virtual seclusion since last year’s House Agriculture Committee hearing on the livestock marketing rule.

That leads us to where this highly-charged battle belongs over $70-$80 million in government-mandated fees in what constitutes government speech. Congress should investigate this situation, particularly given the desire by lawmakers to ensure every dollar spent by the federal government is scrutinized for waste, fraud and abuse. Remember — this is government-approved speech using government-mandated fees.

House Agriculture Committee Chairman Frank Lucas, R-Okla., has asserted repeatedly that 2011 is about educating his greenhorn committee over the regulatory issues affecting production agriculture. When it come to livestock, you can bang on the GIPSA rule, ethanol and animal ID, but if you want to actually see where the heart of an industry fight lies, then ask who controls the beef checkoff, how is it being run, and whether it should be changed. In other words: follow the money.

The beef checkoff didn’t come up last week when the Senate Agriculture Committee held an oversight hearing on livestock. It would be difficult to argue that this CBB-NCBA dispute isn’t somewhat understood by senators considering NCBA’s former chief economist now serves as a professional staffer for Ranking Member Pat Roberts, R-Kan. At last week’s hearing, Roberts also forcefully and eloquently questioned whether personal bias can be set aside when a person from a particular political leaning moves into government service. Thus, Roberts and his staff could demonstrate there are no such undue influences or biases in the committee’s current work by encouraging Chairwoman Debbie Stabenow, D-Mich., to hold a full oversight hearing into whether contractor accountability is being compromised in the political battle over government-compelled speech through government-mandated fees on every cattle producer.

Political accountability over government-compelled speech demands it.



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Posted by on July 5, 2011 in Uncategorized


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