Groups, ranchers urge checkoff reform
July 14, 2016
Washington, DC – More than 140 organizations, ranchers, farmers and businesses applaud Senators Booker and Lee for filing legislation that, when passed, will stop commodity checkoff program abuses. Yesterday, the Senators filed the Commodity Checkoff Program Improvement Act (S. 3201), which would put an end to the most egregious abuses committed by the boards of the federally-mandated commodity checkoff programs. In addition, Senator Lee filed the Voluntary Checkoff Program Participation Act (S. 3200), which would ensure no farmer or rancher is forced to pay fees into programs that do not promote their market segment. The 143 organizations, individuals and businesses delivered to the sponsors and to other Senate offices a joint letter of support.
Checkoff programs were established to provide equal benefits to all producers of a particular commodity by using funds gained from mandatory assessments to conduct promotion and research for that commodity. Laws establishing checkoff programs explicitly prohibit the use of funds in ways that would directly influence legislation or government action in order to prevent unfair distribution of benefits amongst producers. Despite this aim, misuse of checkoff programs has allowed for inappropriate relationships between checkoff boards and lobbying organizations. This has created an anticompetitive effect, benefiting certain producers to the detriment of others, and forcing some producers to pay into a system that actively works against them.
For over six years, the National Cattlemen's Beef Association (NCBA) ignored the U.S. Agriculture Secretary's direct warning about the need for checkoff integrity, which would require, for example, the independence of the Federation of State Beef Councils from the control of the NCBA. During that entire time, the Secretary waited while industry groups self-selected participants to work harmoniously with the NCBA to develop a plan for reforming the Beef Checkoff Program. No meaningful plan was ever developed.
Fred Stokes, spokesman for the Organization for Competitive Markets, said: "These checkoff programs were designed to help the U.S. farmer and rancher, but they have been hijacked by corporate interests. The half-billion dollars that these programs generate each year has been mostly diverted and used to the detriment of producers. These funds have mostly become the cash cow for organizations that work against fair competition and market transparency. The National Cattlemen's Beef Association is a glaring example of such abuse. The NCBA derives more than eighty percent of its total revenue from the beef checkoff, while working against the interests of nearly all U.S. cattle producers. They opposed country of origin labeling, blocked efforts to renew market competition through enforcement of the Packers and Stockyards Act of 1921, and used checkoff dollars to defend big packers' anticompetitive ownership of livestock. The millions of checkoff dollars NCBA receives is their life-blood. Successful passage of this proposed legislation is critically important to restoring fair markets and rebuilding our domestic family farm and ranch agriculture."
R-CALF USA CEO Bill Bullard said: "Our joint letter provides clear evidence that independent cattle producers are tired of the conflicts of interest, misspending, and other abuses rampant in our beef checkoff program. We are now appealing to Congress to take action to stop these commodity programs from harming the very individuals who are forced to pay into the checkoff funds, such as the $1 per head cattle tax that U.S. cattle producers must pay each time they sell an animal."
The joint letter highlights the major reform provisions of S. 3201, which would end the glaring abuses of the program boards.
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The legislation would:
1. Stop federally mandated checkoff dollars from being transferred to parties that seek to influence government policies or action relating to agriculture issues.
2. Enforce the prohibition against conflicts of interest in contracting and all other decision-making operations of the checkoff program.
3. Stop federally mandated funds from being used for anti-competitive programs or from being spent to disparage another commodity in the marketplace.
4. Increase transparency of the individual boards' actions by shedding light on how federal checkoff funds are spent and the purpose of their expenditures.
5. Require audits of each program every five years to ensure their activities are in compliance with the law.
Further, the joint letter requests Congress pass S. 3200, ensuring that in this complicated, multifaceted market, no farmer or rancher is forced to pay into a joint marketing and research program unless they see a benefit to their farm, ranch or business by doing so.