MOU Struck on Beef Checkoff

WASHINGTON (DTN) -- Seven national organizations that are members of the Beef Checkoff Enhancement Working Group reached an agreement Friday on how to proceed with a campaign to increase the beef checkoff from $1 per head to $2 per head.

Three organizations -- National Farmers Union, the U.S. Cattlemen's Association and R-CALF USA -- chose to oppose the increase. They argue the increase doesn't provide enough management and oversight reform for the checkoff.

The industry working group has been struggling to reach an agreement on changes to the checkoff that would garner support to ask Congress for an increase in fees, which are the same as when the national checkoff was enacted in the mid-1980s. The checkoff requires payments by the seller each time an animal is sold to raise funds for beef research and promotion.

The core dispute has been the National Cattlemen's Beef Association's role in managing the checkoff and how much assistance the checkoff provides to small producers as opposed to large producers. Critics have charged that NCBA's role in the management has been too close for an organization that is also involved in lobbying.

Right now, NCBA receives the lion's share of beef checkoff funds each year. This has been the big sticking point for groups that were pushing for more changes in the way the checkoff operates.

The National Farmers Union and the U.S. Cattlemen's Association were part of the working group, but R-CALF USA was not. National Farmers Union left the group last summer because of lack of progress in the talks.

Agriculture Secretary Tom Vilsack has become so frustrated with the group that he recommended the establishment of a second checkoff, but that idea did not win support.

The following groups signed the revised memorandum of understanding (MOU) on changes to the checkoff: American Farm Bureau Federation; American National CattleWomen, Inc.; Livestock Marketing Association; Meat Import Council of America; National Cattlemen's Beef Association; National Livestock Producers Association and the National Milk Producers Federation.

The MOU stated those organizations will support legislation to increase the current beef checkoff program of $1 per head to $2 per head. Within a year of any legislation becoming law, a referendum would be held by beef producers and beef imports to increase the assessment. If a majority of the beef checkoff program payers indicate they would like to increase the checkoff, the assessment rate would increase.

Checkoff fees will continue to be collected as they are now and state beef councils will have the authority to retain 50% of the fees collected.

Producers can ask for a refund of that additional assessment amount, but not the current $1 per head.

Every five years, the agriculture secretary will post a 30-day comment period of time during which beef checkoff payers may request a referendum vote on the continuation of the beef checkoff program and/or a change to the assessment rate. A referendum will be held if 10% or more beef checkoff payers request such a referendum. The wishes of beef checkoff payers indicated by a majority vote in the referendum will be implemented. The current ability for the secretary to conduct a referendum only on the continuation of the beef checkoff if 10% or more of beef checkoff payers sign a petition will remain in place.

A new joint nominating committee, which will recommend candidates to serve on the Beef Promotion Operating Committee, will include members from the Cattlemen's Beef Board, the Federation of State Beef Councils, and other national organizations representing beef checkoff payers. The Beef Promotion Operating Committee plays a critical role in designating which groups are approved for checkoff funds.

Under the MOU, the Cattlemen's Beef Board will annually provide all interested eligible contractors information and training on the contracting process. The group will continue its work "to develop a road map for simultaneously recommending and advocating for the outcomes highlighted in the revised MOU," according to a news release.

Roger Johnson, president of the National Farmers Union, lashed out at the announcement on the MOU agreement. He noted initially the effort was meant to reach consensus on changing the checkoff so it was "not controlled by a single policy organization and focused its resources primarily on research and promotion instead of lobbying," Johnson said.

Johnson added, "The MOU is honestly a waste of everyone's time because it will fail to achieve the real reforms that need to be made."

The U.S. Cattlemen's Association noted in a statement Friday that USCA and the National Farmers Union had proposed the concept of the working group to Vilsack in 2011.

USCA past President Jon Wooster said that despite four years of mediator-driven sessions, "Unfortunately, the group could never reach consensus concerning discussions focused on structural changes except for changing the date organizations had to be formed to be an eligible contractor from 1986 to being an established beef industry organization for at least three years."

"The MOU proposed several changes, including a refundable increase in the assessment of $1," Wooster added.

"There is also a proposed change to the nominating process for candidates to the Beef Promotion Operating Committee," he said.

"At first glance, this proposed change looked promising, but after further consideration, we realized we were compounding the 'conflict of interest' concern by putting national organizations that were contracting for checkoff dollars on the nominating committee, which is the committee who selects the Beef Promotion Operating Committee that decides who is awarded contracts for checkoff dollars.

"The makeup of the BCEWG has changed since its inception, and it seems its main goal is now to increase the assessment with no consideration to structural changes such as separating the Federation of State Beef Councils from the National Cattlemen's Beef Association.

"The U.S. Cattlemen's Association also wanted automatic, periodic referendums on the checkoff and changes in the payments made by state beef councils to buy board seats on the federation board. The Cattlemen's Beef Board also should be allowed to contract directly with the non-industry entities actually doing the work instead of requiring CBB to contract through national organizations that then often sub-contract with these entities.

"USCA will remain active on this issue and will pursue any effort to bring unbiased and open-minded individuals to the table to discuss substantial enhancements to the beef checkoff program," Wooster said.

(CC/AG)

Copyright 2015 DTN/The Progressive Farmer. All rights reserved.