Bipartisan Demand for Checkoff Reform Renewed with Filing of U.S. Senate Legislation

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WASHINGTON, D.C. – Common ground was found among unlikely allies again as the Opportunities for Fairness in Farming (OFF) Act, S. 935, was reintroduced by U.S. Senators Mike Lee (R-UT), Cory Booker (D-NJ), Rand Paul (R-KY) and Elizabeth Warren, (D-MA). The Off Act would put an end to the most egregious abuses committed by the boards and contractors of the federally mandated commodity checkoff programs.

Checkoff programs have been instrumental in the history of agricultural advertising. Famous campaigns, such as “Beef. It’s What’s for Dinner,” have been paid for with family farmers’ checkoff tax dollars. However, checkoff programs have fallen under the control of commodity trade organizations representing global agribusiness interests, and oftentimes the millions of dollars paid into checkoff programs by hard-working family farmers and ranchers end up being used to lobby for policies that harm their interests.

Farmers are struggling amidst increasing consolidation, low commodity prices, and excess supply. Net farm income is at a 19-year low. Along with recent trade disruptions and natural disasters, such as the flooding in the Midwest, the last thing farmers want or need is their tax dollars working against them.

The Off Act would prohibit lobbying trade organizations from receiving checkoff funds, however, this restriction does not apply to universities. It would rein in conflicts of interest and stop anti-competitive activities that harm other commodities and consumers. It would also force checkoff programs to publish their budgets and undergo periodic audits so that farmers and ranchers know where their hard-earned tax dollars are going.

Having filed the OFF Act in the last Congress, Senators Lee and Booker offered the legislation as an amendment to the 2018 Farm Bill. The amendment was supported by over 100 organizations and garnered the support of 38 U.S. Senators.

In November 2018, independent polling by the nation’s oldest livestock publication, Drovers, found that over half of cattle producers flatly rejected the notion that the checkoff was helpful to their farms and ranches. A November 2017 Government Accountability Office report found that the U.S. Department of Agriculture (USDA) must do more to keep checkoffs in check across commodities.

Fred Stokes, founding member of the Organization for Competitive Markets, said:

“Organization for Competitive Markets extends our gratitude to the sponsors of this legislation. The evidence is clear: commodity checkoff programs abuse the very farmers and ranchers who are mandated to pay into them. The over $850 million these programs take from farmers each year have become the cash cow for organizations that work against fair competition and market transparency. So long as checkoff funds remain hidden from accountability and in the hands of trade and lobbying groups, independent family agriculture is in peril of being wiped from the face of the countryside. It is imperative this legislation be passed and signed into law.”

Checkoff programs have had a long history of acting beyond the scope of their statutory mandate. Lax oversight by the USDA has resulted in collusive and illegal relationships between checkoff boards and lobbying organizations, both of which have repeatedly used checkoff funds to influence legislation and government action despite a broad statutory prohibition against these activities. Such advocacy efforts have 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.

The major reform provisions of the OFF Act, which would end the glaring abuses of the program boards, are:

  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 anticompetitive 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.

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Organization for Competitive Markets is a national membership-based research and advocacy organization working for open and competitive markets and fair trade in America’s food and agricultural sectors.

Media Contact:
Angela Huffman
(614) 390-7552
ahuffman@competitivemarkets.com

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