Checkoff Programs and the Marketplace
Under federal law, farmers of certain commodities (including pork, eggs, and beef) are required to pay a portion of their sales into checkoff funds. These funds are intended to be used by the government to promote demand for those products through marketing campaigns. Well-known examples of past campaigns have been “Pork, the Other White Meat,” “The Incredible, Edible Egg,” and “Beef, It’s What’s for Dinner.” Checkoff programs collect tens of millions of dollars from America’s farmers and ranchers every year.
Unfortunately, through questionable if not illegal ways, these dollars often wind up in industrialized agriculture’s coffers. And ironically, while independent family farmers and ranchers pay into these funds, the influence it buys industrialized agriculture corporations and trade groups is used to support policies that work against the family farmers who pay into the checkoff and to stop policies that support independent family farmers and ranchers.
NCBA’s Corrupt Influence
In the case of the beef industry, cattle producers are required to pay a tax of $1 into the checkoff fund for each head of cattle they sell. Under the supervision of the U.S. Department of Agriculture, the Cattlemen’s Beef Board administers these funds. The Cattlemen’s Beef Board contracts with the industry’s largest trade association, the National Cattleman’s Beef Association (NCBA), to carry out the beef checkoff advertising efforts, even though the NCBA claims membership of less than four percent of America’s cattle producers.
To maintain industrialized agriculture’s lock on the marketplace and their unjust share of the retail price of agriculture goods, industrialized agriculture trade organizations such as NCBA expend an excessive amount of monetary resources to gain influence to push for government programs that support their continued control of the market. Checkoff funds are one of their major sources of funding.
NCBA uses checkoff dollars to build its influence to push anti-independent family farm policy, all the while claiming it is the voice of U.S. cattle producers. NCBA used its ill-gotten influence to end Country of Origin Labeling (COOL) and to hinder GIPSA rules that would end predatory market practices. This is a clear conflict of interest that is prohibited by law. Since the NCBA has been administering the lion’s share of the beef checkoff funds, the U.S. has lost nearly half of its cattle producers.
OCM has long been a leader of the effort to reform the checkoff tax system. As a result of our efforts, federal courts have questioned the basic premises of the program and through OCM’s Freedom of Information Act claim, thousands of documents are in the process of being released to shed the light of day on NCBA’s very dark practices.
Through OCM’s encouragement, federal lawmakers are working together to end the checkoff programs’ abuses. In March, 2017, the Opportunities for Fairness in Farming (OFF) Act, S. 741, was introduced by Sens. Mike Lee (R-UT) and Cory Booker (D-NJ), while Reps. Dave Brat (R-VA) and Dina Titus (D-NV) introduced companion legislation in the House, H.R. 1752. This bill would strengthen prohibitions against using checkoff funds to engage in lobbying, conflicts of interest, or other harmful anti-competitive activities.
The Voluntary Checkoff Act, S. 740, was reintroduced by Senator Lee, and companion legislation, H.R. 1752, was introduced in the House by Representative Brat. This bill would would ensure those farmers who do not want to participate in a checkoff program would not be mandated to do so, while allowing those who want to participate to continue to do so. When enacted, these bills would end the abuse of the checkoff programs, helping restore opportunity for U.S. family farmers and ranchers.
OCM will continue to pursue every avenue possible to ensure family farmers and ranchers no longer fund their own demise through their checkoff dollars.