Scandal in the checkoffs – Why OFF Act is imperative

USDA publishes 2020 dairy checkoff report, two others still pending
By Marcia Brown| 09/25/2023 01:04 PM EDT
The Agriculture Department on Friday submitted a required report to Congress on its dairy marketing and research program — more than two years after it was due. And USDA still owes Congress two more reports detailing how it spent hundreds of millions of dollars promoting the dairy industry in recent years.

The failure to provide timely information on the program, known as the dairy checkoff, and its spending adds more fuel to what’s likely to be a major farm bill conflict over how or whether to reform the controversial system for researching and promoting dairy products and other commodities to U.S. consumers.

Critics on both the right and left argue there should be more transparency and oversight of the programs, which are funded via mandatory taxes on dairy farmers and other producers of commodities, including raisins, beef, eggs and cotton. They point to past allegations that subcontractors for the checkoff programs used the money to pay for excessive travel and lobbying for their organizations’ agendas, as well as questions about whether it’s constitutional to require farmers to participate.

In a letter sent to USDA on Friday morning that was obtained by POLITICO, a bipartisan group of lawmakers wrote that they “are highly troubled that dairy farmers have been denied access to federally mandated reports detailing the efficacy of programs they must fund.”

“By neglecting to fulfill this obligation, USDA risks further eroding farmer’s confidence in important agriculture programs,” continued the letter, which was signed by Sens. Cory Booker (D-N.J.), Elizabeth Warren (D-Mass.) and Mike Lee (R-Utah) and Reps. Nancy Mace (R-S.C.), Dina Titus (D-Nev.) and four other House members.

Booker, Lee, Mace and Titus are co-sponsors of the Opportunities for Fairness in Farming Act, which would prohibit checkoff programs from contracting with organizations that lobby on agricultural policy, prevent conflicts of interest and create new standards to prevent anti-competitive conduct. But the bill has drawn fierce opposition from industry trade groups , who say it would “stymie” research and “undermine” producer input into the programs.

A few hours after lawmakers sent their letter, the agency published its 2020 report on the dairy checkoff program on its website. The report details how farmers’ dollars — 15 cents per hundredweight of domestic milk and 7.5 cents per hundredweight for imported — were spent that year, including on contracts with Cornell University, McDonald’s and the National Milk Producers Federation. The memorable “Got Milk?” ad campaign of the 1990s was a product of the checkoff program, as was, more recently, the “wood milk” ad.

Context: Until Friday, the most recent annual report USDA had released on the dairy checkoff program was one covering the 2019 calendar year, published in August 2022. Since then, dairy farmers have paid nearly $1 billion in checkoff fees to USDA.

The dairy checkoff is one of more than 20 promotion and research funds USDA oversees for various agricultural commodities. Dairy is the only checkoff that must send its report to Congress; other big checkoffs enlist outside auditors and are governed by different legislation.

Advocates have been prodding USDA for months to publish the congressionally mandated reports for 2020, 2021 and 2022, which are due annually. Under the Obama administration, the agency also failed to file reports on the dairy checkoff program for a number of years. There is no punishment for missing the July 1 deadline — except potential censure from lawmakers.

USDA spokesperson Allan Rodriguez said in a statement that the data the agency needs to assemble the reports is not always available by the statutory deadline. "USDA has conveyed to Congress that the current deadline for the report does not conform with the actual timeline required to complete it," said Rodriguez.

In addition to publishing the 2020 report on Friday, USDA responded to Farm Action, one of the groups that urged the department to publish the delayed reports. In a letter, the agency said it was “reviewing the 2021 econometric analysis” and will begin working on the 2022 report after it finishes the 2021 analysis, but provided little detail on the timeline for publishing the other overdue reports.

Critics not satisfied: That response didn’t placate advocates.

“It is unfortunate that it took a letter from Congress to shake USDA’s tree and get them to respond to the farmers they should be accountable to,” said Angela Huffman, president of Farm Action, one of the groups pushing to overhaul the checkoff program.

Lawmakers also blasted Agriculture Secretary Tom Vilsack, who previously led the U.S. Dairy Export Council, a trade group that receives funds from the dairy checkoff program.

“This is not the first time that USDA under your leadership has failed to submit these reports to Congress,” they wrote. “In your first term as Secretary, they went unpublished for five years. Only in 2017, when Secretary Sonny Perdue responded to pressure from farm groups and the media, were dairy farmers finally able to see how their mandatory fees were spent from 2012-2016.”

What’s next: The lawmakers demanded USDA publish the reports from 2021 and 2022 or provide “written justification” by Sept. 29.

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