The Oklahoma Cattlemen’s Association is holding a referendum to double the beef checkoff tax assessed on cattle producers. In-person voting takes place on November 1, 2017 at Oklahoma County Extension Offices. The election process has been controversial, with many constitutional and illegal irregularities. On behalf of our Oklahoma membership, the Organization for Competitive Markets urges a “No” vote for the following reasons:
- It’s throwing good money after bad. The fee increase would raise an additional $3 million to be managed by the Oklahoma Beef Council, following the discovery that the organization lost $2.6 million checkoff dollars to embezzlement by a staff member during a 10-year period. In other words, the beef checkoff increase would triple the amount of money managed by folks who didn’t miss $2.6 million.
- The election is not fair. Numerous constitutional and legal irregularities have been uncovered in the petition and referendum process – from the fact that three quarters of the Oklahoma legislature did not approve the revenue increase as required, to the fact that the Oklahoma Cattlemen’s Association took nearly seven times too long to gather the required petition signatures, and the fact that the Oklahoma Cattlemen’s Association based the number of required petition signatures on the number of Oklahoma ranches that have cattle and not on the number of cattle producers in Oklahoma, resulting in thousands too few signatures being submitted to allow for a referendum vote to occur at all.
- Proponents of the checkoff increase are using a fake, confusing, and illegal checkoff trademark in promoting a “yes” vote. Using the checkoff logo to support and promote an increase in checkoff fees is a violation of federal law.
- The referendum is part of a nationwide effort to increase big agribusiness’ influence on policy. At the federal level, the National Cattlemen’s Beef Association has not succeeded in its attempt to increase beef checkoff fees through Congress. In fact, legislation is gaining momentum in Congress that would prohibit NCBA from receiving any checkoff tax dollars in the future due to the organization’s lobbying activity. The Oklahoma Cattlemen’s Association, a state affiliate of the NCBA, is holding the statewide referendum as part of a coordinated effort led by NCBA to raise checkoff fees at the state level. There are now up to 15 states with NCBA affiliates that are pushing for or have passed beef checkoff increases. According to federal law, checkoff dollars are not to be used to influence policy, but it happens.
- Voter eligibility for the referendum is questionable. The referendum allows foreign corporations, out-of-state producers, and meat packers to vote on whether to increase the beef checkoff tax on Oklahoma cattle producers. It allows young children to vote, many of whom are too young to even sign their names. Voters are not even required to provide proof of cattle sales.
- The referendum would double the beef checkoff tax in Oklahoma during a time when farm incomes are down. If the referendum passes, all Oklahoma cattle producers will be forced to pay the additional mandatory fee – an increase from $1 per head to $2 per head. A tax refund is purportedly available if an application process is followed within a limited time period, although there is no guarantee that the Oklahoma Beef Council will have those funds available to return to producers. The National Taxpayers Union has come out against this checkoff increase on behalf of their Oklahoma members, stating that it would “reduce producer profits, and make it harder for both independent and young cattlemen and women to gain a foothold in the industry.”
- The checkoff program doesn’t benefit those who pay the tax. Oklahoma Cattlemen’s Association and the other proponents of the checkoff increase highlight that the existing checkoff funds result in a $11.20 return on investment to the industry, but since 2014 cattle producers have seen a 43% drop in cattle prices and a 22% drop in the farm share of the retail beef dollar. The “industry” may be making money off the checkoff, but Oklahoma cattle producers are getting less today.
- There is no requirement that the beef checkoff funds be used to market only Oklahoma beef. Current checkoff funds are used to market foreign beef for Brazil’s JBS as well as other foreign importers.
- Proponents of the checkoff increase still have not released any audits or detailed expenditures on how the current checkoff funds are being expended in Oklahoma. We do know that at the federal level, beef checkoff fees comprise up to 82% of the National Cattlemen’s Beef Association’s annual budget, allowing NCBA to pay its president nearly half a million dollars a year. As much as 72% of the NCBA’s president’s salary comes from beef checkoff fees (see NCBA’s IRS Form 990, Reportable Compensation from the Organization). If the beef checkoff increase passes in Oklahoma, it is not clear what percentage of the state-level checkoff funds would be contracted to NCBA’s state affiliate, the Oklahoma Cattlemen’s Association.
- Now is not the time. We should not consider an increase of the checkoff assessment from $1 to $2 until the abuses within the Oklahoma Beef Council are fully resolved. Now is not the time to double the tax on the backs of Oklahoma cattle producers.
