Secretary Vilsack has proposed a new Beef Checkoff Program, which is in addition to the current one which will remain as is. As I understand it, three years after the new program goes into effect there would be a referendum to see if Checkoff payers liked it. In the meantime, the present program would continue and NCBA would presumably continue its lock on the contracting process for the current (mandatory) program and thereby receive more than 80% of their total revenue.
These tens of million each year nourish and empower NCBA as it obstructs reform and pushes its self-interest and that of the packers. Any new and competing program has little chance of success so long as this blatant conflict of interest persists.
It is a conflict first and foremost due to the veritable lock NCBA has on the Beef Promotion Operating Committee which awards contracts for the program. The committee is comprised of 20 members; with 10 being appointed by NCBA and 10 appointed by the CBB. NCBA having half of the votes basically assures control. Moreover, most of the members appointed by the CBB are typically NCBA members.
NCBA advocates policy opposite to the views and interests of most of the cattle producers who fund the program. The supposed “firewall” between checkoff money and non-checkoff money has been a sham from the beginning. How can NCBA be expected to act with equal diligence in pursuing producer interests and its own contrary policy positions? The Proposed GIPSA Rule and mandatory country of origin labeling stand out as stark examples of these conflicting interests.
NCBA has also used checkoff funds to commission studies that reached questionable and self-serving conclusions. Through its advertising buys in farm publications and other media, NCBA has biased editorial perspectives in support of its policy positions and distorting information to paying cattlemen so as to continue its revenue stream.
With a minuscule percentage of the cattle producers as members, the hundreds of millions received over the years has empowered NCBA to represent its brand to be the de facto voice of the cattle industry.
While I have long supported the concept of U. S. beef producers funding a program to promote their product and thereby their financial interests, the current program with NCBA as the exclusive contractor has been a resounding failure. This year, as beef demand increases, we will wean the smallest calf crop since 1941 from a declining number of ranchers. Today’s cattle prices, although much better, still do not reflect a fair share of the prices consumers are paying.
NCBA’s contract with the CBB (Cattlemen’s Beef Board) is clearly a prohibited conflict of interest. It should be summarily terminated now!
The USDA’s own Beef Promotion and Research Act Guidelines prohibit conflicts of interest or even the appearance of a conflict of interest. Clearly, NCBA’s chokehold over the CBB contracting process is a conflict.
Secretary Vilsack stated in his 2010 letter to NCBA that those funding the checkoff “need concrete assurances that their monies are used as intended by law, and the generated funds support the interests of all producers and importers, not just NCBA members.” Given the Clifton Gunderson performance review findings of misappropriation, followed by the 2013 whitewash of the OIG beef checkoff, there is no such assurance.
Not surprising, given the revolving door between NCBA, the big meat packers, and the USDA, that USDA’s legal staff has advised the Secretary that he lacks the authority to find NCBA’s self-dealing and control of the checkoff to be a conflict of interest. OCM initiated the 2004 report on agency capture: “USDA INC., HOW AGRIBUSINESS HAS HIJACKED REGULATORY POLICY AT THE U.S. DEPARTMENT OF AGRICULTURE.
OCM attorneys disagree with USDA’s legal staff:
“The Secretary has the authority and duty under the Beef Act, Order, and oversight rules to ensure that expenditures are lawful and fulfill the purpose of the checkoff program. Expenditures requested for the Secretary’s approval that are made in violation of law, regulation, or enforcement guidelines designed to protect the integrity of the checkoff should be rejected. Secretary Vilsack noted in his 2010 letter to NCBA that those funding the checkoff “need concrete assurances that their monies are used as intended by law, and the generated funds support the interests of all producers and importers, not just NCBA members.” It is within the Secretary’s authority to directly provide such concrete assurance to producers and importers by enforcing the prohibition against conflict of interests in the checkoff contracting process, by ensuring that no private organization received preferential treatment (or anything close to a checkoff contract monopoly), and by preventing any entity’s policy activities from being enhanced by substantially increased revenues and shared expenses with checkoff funds.”
So I call on Secretary Vilsack to fulfill his obligation to seek out and end conflicts of interest and corruption in the beef checkoff. It’s his duty, and the only thing stopping NCBA from using cattle producer’s own money to promote a corporate owned and controlled global meat industry.