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NFU’s Roger Johnson on Checkoff…”Denying that there’s a problem is NOT the answer.”

12 Jul

An Interview With NFU’s Roger Johnson re Beef Checkoff – Part I

By Leesa Zalesky for Western Ag Reporter (Available on the web)

National Farmers Union (NFU) President, Roger Johnson, was elected to his position in 2009. Johnson, a third-generation family farmer from Turtle Lake, ND, also served as North Dakota Agriculture Commission before being tapped to lead NFU.  From 2007-2008, Johnson served as president of the National Association of State Departments of Agriculture (NASDA), where he played a key role in crafting the 2008 Farm Bill. Johnson is past president of the Midwestern Association of State Departments of Agriculture (MASDA), past president of the Food Export Association of the Midwest, and a former chairman of the Interstate Pest Control Compact.  NFU is one of several national ag organizations that formed a coalition last year advocating for beef checkoff reform. Earlier this month, Johnson sat down for a straight-forward interview about the beef checkoff program.

Q. Does NFU support the Cattlemen’s Beef Board (CBB) Executive Committee’s recommended changes to the CBB Roles and Responsibilities? Please explain why or why not.

A. Yes, NFU supports the proposed changes to the CBB’s roles and responsibilities. The recommended changes are a reasonable, well thought-out approach to strengthening the beef checkoff and enhancing producer support for the program.

The proposed changes reflect aspects of the newly published guidelines for commodity checkoff programs by the USDA and also mirror the agency’s expectations as outlined by Secretary of Agriculture Tom Vilsack in his May 17, 2010, letter to the leadership of NCBA at a time when NCBA was undertaking its own governance restructure. I think the secretary’s letter outlining his expectations and the newly published guidelines for commodity checkoff programs have gotten LOST in the public controversy over this issue. The Secretary’s comments and the newly published guidelines for commodity checkoff programs provide a blueprint for the CBB to follow in order to protect the integrity of the beef checkoff and to enhance producer faith and trust in the program they fund.

It’s IMPORTANT to remember that NCBA initiated the whole discussion of restructuring when its Governance Task Force (GTF) brought forth its recommended changes to the NCBA governance structure more than a year ago, attracting Secretary Vilsack’s response that expressed his concerns about how those proposed changes would impact the Beef Checkoff program and catalyzing the CBB’s appointment of its Roles and Responsibilities Committee and the committee’s subsequent action. It’s also important to remember that these changes do NOT threaten NCBA as a primary contractor for checkoff projects. Unfortunately, the RHETORIC surrounding the proposed changes has diverted attention from the end goal and led to a needless waste of resources. Equally as unfortunate is the fact that the CBB Executive Committee has been forced to respond to some rather unsavory allegations by NCBA, which has resulted in the waste of TENS OF THOUSANDS of checkoff dollars since the allegations required several meetings between CBB and NCBA leadership to discuss the allegations as well as the involvement of attorneys.

Beyond that, the entire situation has been aggravated by the outcome of a financial audit review, which showed SERIOUS FINANCIAL DISCREPANCIES related to NCBA and checkoff funds. The initial review, which sampled a fraction of transactions, resulted in the CBB recapturing more than $200,000 of checkoff money that had been misappropriated by NCBA. A recently released update shows that figure has now grown to more than $305,000. When the results of the initial financial audit review were made public, the reaction from some was fury over the public disclosure of the facts, which made no sense at all, as that response did NOTHING to reassure producers that their money is being invested honestly and prudently in the promotion of beef.

At the end of the day, the CBB – all 106 members – are accountable to producers for how their money is spent and are responsible for transparency, and so is the Federation of State Beef Councils. It’s refreshing to know that the CBB Executive Committee is forthcoming with information for their constituents.

Q. Have NFU’s comments been forwarded to the CBB?

A. The comments are due in mid-July. NFU has not submitted comments yet, but will do so. In general, we support the CBB’s recommendations.

Q. How many members does NFU represent?

A. NFU represents about 200,000 family farmers, ranchers, and fishermen in all 50 states. NFU has 25 divisions that represent 32 states.

Q. Across the country, NFU is a certified nominating organization for beef council boards in many states. Many producers feel a strong disconnect with their state beef councils in that they feel their interests are not being represented and that some state beef council members follow their own personal judgments and preferences. Do you agree that this disconnect exists? And what do you think the solution is – related to NFU – for ensuring that ALL producers are represented in the checkoff program for the betterment of the entire industry?

A. Yes, we’re very aware that some producers feel disenfranchised from the process at the state level. Many feel that NCBA has too much influence over the nominating process, which reflects poorly on not only the nominating organizations but also the overall program. This perception has resulted in some states suggesting the elimination of the state beef council nominating process and a move to an election of state beef council members. However, as I understand it, doing so would require amending the Beef Promotion Act by Congress and that presents RISKS and challenges.

A better approach would be for GREATER SEPARATION between the Federation of State Beef Councils and NCBA, and the Secretary of Agriculture has indicated that this is his expectation. That was NOT received well by NCBA or its affiliates, and it appears that they aren’t going to be satisfied with anything but status quo.  There are problems with the current structure. They need to address the firewall breaches and undue influence issues surrounding checkoff governance and management. Ignoring how checkoff constituents feel or denying that there is a problem is NOT the answer.  

Those who serve the beef checkoff – whether on their state beef council, the Federation of State Beef Councils, or the Cattlemen’s Beef Board – have a difficult job. It is a fundamental principle that their decisions about the beef checkoff CANNOT be influenced by their personal affiliations, beliefs, or loyalties to one organization or another and that those decisions must be made in the best interest of the overall industry. To answer your question directly, that is NFU’s expectation. 

Part II

An Interview with NFU’s Roger Johnson re beef checkoff

Q. Is NFU a certified nominating organization for the Kansas Beef Council?

A. No.

Q. Are you aware that the Kansas Beef Council, in a letter to the CBB dated May 31, referred to “secret email exchanges” between CBB leadership and USDA political appointees? In an interview with Tom Jones, CBB Chairman, he stated that this subject was part of an executive session discussion of the CBB and that he could not discuss it. I asked Mr. Jones about the matter because it’s been referred to vaguely in the press over the past few weeks, and producers are confused about the references. Do you know – through NFU representatives on the Kansas Beef Council – how Kansas Beef Council obtained these “secret email exchanges” and to whom they’ve been circulated?

A. Over the past few weeks, I’ve read several press reports alluding vaguely to an internal controversy over certain emails, which were, as I understand it, dealt with in an executive session of the CBB. I do not know how Kansas Beef Council or any other group might have obtained these emails nor do I have any knowledge of their content. What I DO know is that the subsequent allegations and controversy have extracted valuable resources from the beef checkoff, and I think a full accounting and disclosure of the associated costs would be very appropriate. Because of the personal incriminations made, it may be necessary for the CBB to conduct an investigation into how those emails were obtained and whether or not there was a violation of an executive session discussion.  

I am also aware that, on June 8, 2011, the CBB Executive Committee circulated (to state beef councils, CBB members, and staff) a legal opinion regarding these allegations and the resolutions to them, again at the expense of the checkoff.

Left with little choice because of the allegations made, the CBB Executive Committee, together with its legal counsel, moved swiftly to settle this controversy and has taken appropriate action. It’s time to move forward, put those allegations and the associated controversy behind us, and refocus on the important decisions ahead.

Q. In the same May 31 letter, the Kansas Beef Council suggests that perhaps the CBB should exercise its legal responsibility and replace the CBB chairman and chief executive officer. Do you support or oppose that suggestion?

A. No, NFU would NOT support that action, and we do not believe that sort of discussion is productive or helpful to the checkoff program, particularly at a time when so much controversy already exists. Members of the CBB are appointed by the Secretary of Agriculture, and leadership of the board is elected by the board itself.

Q. As a national agriculture leader, are you concerned that some state beef councils are harming their relationship with the CBB in this process?

A. Yes.

Q. Do you believe that it’s fair and appropriate for a policy organization (NCBA), which is also the majority contractor for beef checkoff projects, to hold seats on CBB and Federation Joint Committees; e.g., NCBA’s Policy Division holds seats on the Joint Budget Committee, which handles spending priorities, budget forecasts, budget allocations, etc.?

A. The National Cattlemen’s Beef Association (NCBA) was the product of the 1995 merger between the National Meat Board, which included the Beef Industry Council (BIC), and the National Cattlemen’s Association (NCA). In that merger the BIC came into the NCBA fold and became the Federation of State Beef Councils. There have been questions raised over time about whether or not that merger should ever have been allowed to occur or at least whether or not USDA should’ve allowed BIC to become part of a policy organization.  Nevertheless, the merger occurred, and today we have the Federation of State Beef Councils as a division of NCBA.

Last year, NFU joined with four other industry groups, suggesting that USDA force a separation of NCBA and the Federation. The CBB executive committee voted in favor of the separation. NCBA lobbied its members on the CBB hard to overturn the vote, and since CBB meetings are held in conjunction with NCBA meetings, they again had undue influence and managed to get the vote overturned by the full CBB at their summer meeting last year.

By virtue of the 1995 merger, NCBA, through its association with the Federation, was assured of at least 10 of the 20 available seats (50%) on the powerful Beef Promotion Operating Committee, which handles most of the selection of CBB contractors. That is where the lines begin to get BLURRY for many checkoff-paying cattle producers. As the joint committee process was developed between the CBB and the Federation of State Beef Councils, for whatever reason, NCBA’s policy division was guaranteed 4 of the 12 seats (33%) on the Joint Budget Committee. In the Budget Committee, NCBA’s Federation Division holds 4 seats, and the CBB holds the remaining 4. The question has been raised about where else – in a public procurement process financed with taxpayer funds – is the primary, practically exclusive, contractor allowed to participate as part of the program’s selection and management committee? (According to IRS filings, NCBA received more than 92% of total checkoff contractor funds in 2009 and 2010). It’s a legitimate question, and it is addressed in the proposed roles and responsibilities changes.

The separation between policy and checkoff-funded activities is concisely spelled out in the law. Any reorganization that strengthens that separation and provides concrete assurances to producers that their monies are being used as intended by the law will enhance the program and set the stage for further improvements.

Q. I’m sure that you understand that CBB members are appointed by the Secretary of Agriculture and, as such, are responsible for representing ALL producers for the betterment of the ENTIRE industry without personal bias or prejudice. That’s a heavy responsibility. Do you believe that CBB members today are carrying out that charge?

A. No, I think there is significant need for improvement. The vote in last summer’s meeting should have validated the vote by the CBB Executive Committee to separate the Federation from NCBA. An improved process is needed by which CBB members are informed, educated, and communicated with about their roles and responsibilities. This is important for not only new CBB members, but longer-term members as well.

Important decisions lie ahead for the 106 members of the CBB when they gather in Florida for their summer meeting. The actions taken by the CBB to update its roles and responsibilities will send a strong message to every cattle producer in the country. NFU supports the CBB Executive Committee’s recommendations for change, and we urge the full CBB to adopt them.  

 

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Posted by on July 12, 2011 in Uncategorized

 

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