February 25, 2014
Where’s the Beef: A Primer on the Beef Checkoff Tax
The questions began in 1996 when the National Cattlemen’s Association (NCA) voted to merge with the Beef Industry Council (BIC) forming the organization with the mind numbing name of the National Cattlemen’s Beef Association (NCBA). Up until then, there was little organized opposition to the Beef Checkoff, a levy ratified in 1988 by a referendum of cattle producers. From the beginning, the National Cattlemen’s Association had engineered a system that gave them control of the $80 million per year beef promotion fund, yet most beef producers went along with the program – some more grudgingly than others. In 1996, claiming that the newly merged association would create administrative savings, the staff of the Beef Industry Council, the entity created to operate the Beef Checkoff promotion programs, and the staff of the National Cattlemen’s Association, a private political advocacy group, were merged.
Bear in mind, that only three percent (3%) of the more than one million cattle producers belonged to the NCA. And also bear in mind that only a small number of that membership attended the meeting that authorized the merger. Following the merger many non NCBA-affiliated producers got to wondering about who was representing them in the dispersion of all of that money.
Two things happened as a result of the coup d’état. The Livestock Marketing Association (LMA), the industry organization of the auction market operators, led an effort to gather signatures to trigger a referendum . And a number of individual producers, independent of each other, brought law suits on the grounds that the NCBA did not represent their interests, and as such paying the Checkoff was an infringement of their constitutional right to free association.
By merging their staff and allocating part of each staff person’s time to Checkoff and part to political advocacy, the NCBA was leveraging the Beef Checkoff to further their radical political philosophy. In plain words, when lobbyists representing the NCBA are meeting with members of Congress, where is the line that says this is Beef Checkoff business and this is now political advocacy. Only seven percent (7%) of NCBAs operating budget comes from the membership, so the Beef Checkoff is central to maintaining the NCBAs political lobbying clout.
The LMA petition gathered 126,000 signatures but USDA only allowed 83,000 of them, which fell short of the 107,000 that represented 10% of eligible cattle producers. The lawsuits hit a brick wall when a Federal Judge in Billings Montana (later upheld by the Supreme Court) ruled that the Beef Checkoff was Government Speech. What had been, up to that point seen as a voluntarily entered into levy operated by cattle producers themselves, became a tax. And we as taxpayers do not have a say in what message the government decides to promote with our tax money, even in the case when the government allows that message to be made by an overtly political advocacy organization.
Another issue has since risen. A limited audit in 2010 found that the NCBA had misappropriated $216,944 in Checkoff Tax funds. A subsequent more extensive investigation by the USDA Inspector General concluded that USDA’s oversight and documentation was so lax that the investigators could not determine if there was additional misappropriation of the Checkoff Tax by the NCBA.
So there you have the situation 26 years after the Beef Checkoff Tax was authorized by a referendum of cattle producers to be our voice in the promotion of beef consumption. After 26 years there are many fewer livestock producers over all and yet there are also many “new” producers who have never had an opportunity to vote. In particular they have never had a say if they wish to promote beef consumption via a special Beef Checkoff Tax controlled by an organization that opposes Country of Origin Labeling (COOL); favors the free importation of beef from countries harboring Mad Cow Disease and Foot and Mouth Disease; favors a national animal identification system run by the government to track all livestock movements; and opposed to the Grain Inspection and Stockyards Administration (GIPSA) allowing livestock contract growers legal rights.
The members of the Montana Cattlemen’s Association (MCA) hold diverse opinions about the utility of the Beef Checkoff Tax: some feel that misuse of the funds is inevitable and we should give up on the Tax as a well-intended but failed effort; some feel that with reform, the Tax can help promote beef consumption; and some feel that reform in not necessary and would like for the Checkoff Tax to continue as it is. Most feel that it was never their understanding that the Checkoff Tax was voted in for perpetuity with no further ratifications required. All of the MCA members, however, feel that young producers should have the opportunity to vote if they wish to continue the Beef Checkoff Tax. After all it is their industry now.
The Montana Cattlemen’s Association is investigating what the requirements are for gathering signatures to trigger a referendum. A petition drive will require mobilizing cattle producers from all across this country. If you are interested in being part of this process, please contact:
The Montana Cattlemen’s Association at (406) 537-2333 or MCA@Wildblue.Net