NCBA defends board restructuring
May 28, 2010
OMAHA (DTN) – Leaders of the National Cattlemen’s Beef Association met with USDA officials Tuesday about Agriculture Secretary Tom Vilsack’s letter expressing concern over NCBA’s reorganization plan that some farm groups have argued would co-mingle policy and checkoff decisions.
NCBA President Steve Foglesong, an Illinois cattle producer, stressed in a conference call with reporters Tuesday that changes in NCBA’s governance board are right now a draft proposal that can be changed. He said NCBA leaders are working to be open with cattle producers regarding what these changes could mean for them.
Farm groups, particularly cattle organizations at odds with NCBA, have argued that the governance plan strips away some of the so-called firewalls that separate NCBA’s policy decisions from NCBA’s federation division, which oversees and spends checkoff funds collected from every producer.
“While NCBA, or any group, has the right to restructure its organization, we at R-CALF USA believe the proposed NCBA restructuring has ramifications that go far beyond the limited number of NCBA members that pay into the checkoff,” stated R-CALF USA Region VII Director Joel Gill, who chairs the group’s checkoff committee, in a letter to Vilsack. “We believe NCBA’s proposal will cause irreparable damage to the image, reputation and possibly the very effectiveness of the Federation, particularly in the eyes and minds of the thousands of independent producers who are mandated to fund the checkoff program but are not NCBA members.”
The Federation of State Beef Councils is comprised of members of the 45 separate state beef councils, which receive 50 cents of the $1 beef checkoff collected when a head of cattle is sold. The councils then share a portion of their 50 cents with the national federation.
Foglesong said the goal of the restructuring is to make NCBA more efficient and effective, increase input into policies and help the organization make quicker decisions with a 29-member board rather than a 270-member board.
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“NCBA’s perspective here and the reason we started this process is to just get us more efficient and more nimble and move quicker to deal with the problems the beef industry has got,” he said.
Foglesong said NCBA had not changed its structure since the merger between the National Cattlemen’s Association and the National Live Stock and Meat Board in 1996 and believes there could be efficiencies gained by restructuring the group’s governance. Right now, the group doesn’t have a dollar figure on what kind of savings is gained by restructuring.
Vilsack wrote NCBA last week stating USDA has “serious concerns with the approach” NCBA is taking with its governance plan. Vilsack’s letter cited six different issues from the Beef Promotion and Research Act regarding the firewalls that must exist between a checkoff group and a policy organization.
Edward Avalos, USDA undersecretary for regulatory and marketing affairs, asked NCBA leaders on Tuesday to address the individual issues raised in Vilsack’s letter in written form.
“USDA appreciates the opportunity to discuss the reorganization proposal put forward by NCBA during their visit today. Secretary Vilsack’s recent letter to NCBA represents USDA’s current position on this issue,” a USDA spokesman said. “We remain concerned that NCBA’s current proposal weakens the firewall between policy and checkoff funded activities, and have asked NCBA to put in writing how they plan to carry out each of the Secretary’s guidelines outlined in the letter.”
NCBA’s president said, “It’s clear that USDA wants to have a very clear picture of what’s the federation’s role is in NCBA’s new structure.”
Besides responding to USDA, Foglesong said there is still an opportunity for any producer or group to weigh in on the draft proposal.
“During the course of this entire process we have tried to be as open as we possibly can and give everyone the opportunity to have input in that,” Foglesong said.
Foglesong said NCBA staff and members will now meet Wednesday with representatives from some of the general farm organizations and other livestock groups who wrote USDA in March raising questions about NCBA’s proposal. Farm groups questioned whether NCBA’s plan would be more exclusive.
Scott George, chairman of NCBA’s Federation Division, and a Wyoming dairy-beef producer, said the federation already exists inside the structure of NCBA and is not a separate entity, but functions in an independent manner. “The way the new governance structure is proposed, the federation will be very independent in its actions,” George said.
Farm groups have questioned the breakdown of the firewall between NCBA’s policy division and the group’s federation division. NCBA officials said there are some disagreements regarding the definition of firewall.
“We believe the firewall is an accounting firewall and that has been strictly enforced and will be strictly enforced,” George said.
The checkoff dollars are audited annually. But NCBA believes people involved in checkoff money should be able to have a say in the business climate that is affecting them, George said.
The Federation of State Beef Councils share a portion of their 50 cents from the checkoff with the federation. Of the approximate $76 million collected annually, state beef councils receive approximately $35 million.
“I want to stress the state beef councils have complete control over that 50 cents and they have options on where to spend it,” George said.
The federation alone will elect the chair, vice chair and eight members of the Beef Operating Committee. The federation will also approve its own budget and recommend it to the board to be enacted.
“This is a good thing for the federation because it further improves our highly effective, highly efficient state-national plan,” George said.
Given some of the livestock critics out there, George said that it’s also important that producers “be one team that can act quickly and speak with one voice” to respond to those challenges.
George said if a state beef council is not happy with the federation decisions, the beef council can choose not to help fund the federation programs.
The final governance structure, which could be approved by NCBA members at the group’s meeting later this summer, will be legal and consistent with the Beef Promotion Act and Order, Foglesong and George said.