Checkoff Politics
11/3/2006
Steve Cornett
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The beef checkoff, which celebrates its 20th anniversary this year, seems to have matured into a successful program supported at mid summer by more than 70% of producers. That is if you trust—and the fact that there is an “if” needed in the sentence signals problems—the survey conducted for the Cattlemen’s Beef Board.
But not everybody trusts the survey. Not everybody trusts the Cattlemen’s Beef Board, in fact.
This bodes to be a fractious birthday party with the industry’s populist organizations—including R-CALF and the National Farmers Union (NFU)—aligned with the organizations representing livestock auctions against the more mainstream cattlemen’s organizations to see how checkoff millions are used and who controls them.
The battle lines were drawn in late summer when an “industry wide” task force announced its four recommendations for changing the 20-year-old act. Those include doubling the per head collection to $2, renaming the Federation of State Beef Councils, deleting the requirement that only organizations in existence at the time the original bill passed would be eligible contractors for the Cattlemen’s Beef Board and requiring USDA to conduct periodic surveys to see if cattle producers want a new referendum.
The changes would require that Congress pass a new bill to include the changes—and that is where the battles to come will be fought. Nobody expects any major changes for quite a while, and it’s far from certain what those changes, if any, will be.
Both the Livestock Marketing Association (LMA) and the National Cattlemen’s Beef Association (NCBA) say their boards will not even consider the matter until winter meetings. R-CALF, on the other hand, put out a quick news release emphasizing they were “disappointed” in the task force recommendations.
This is not the checkoff’s first wrestling match. In fact, the program was born in controversy. At the time of its inception, the beef industry’s power structure was a bit Rube Goldbergian. The National Live Stock and Meat Board (NLSMB) in Chicago—through its Beef Industry Council—ran all beef promotion programs and chose the board members who oversaw the program. It was autonomous; the state beef councils and state cattle associations managed checkoff collection programs, some were mandated by states, others were voluntary.
But members of the NLSMB’s boards and staff were forbidden to lobby. Their money was earmarked for research and promotion.
Lobbying fell to the National Cattlemen’s Association (NCA), and they had veto power over design of the checkoff program that was presented to Congress. Congress was never a barrier to the design of self-help checkoff programs for any commodity. They pretty well delivered what the commodity groups wanted.
In this case, what cattlemen wanted was a program that they could control. The bill created the Cattlemen’s Beef Board (CBB)—with members appointed by USDA from a list of nominees submitted by industry groups in each state, but with limited powers. Concerned about creating a new industry-supported bureaucracy, operatives from NCA and Beef Industry Council (BIC) wrote the bill to make sure only “existing” cattle organizations could contract with CBB.
That prevented CBB from building a staff to manage checkoff programs. Instead, the work would be contracted through BIC and, where appropriate, through NCA.
About the time the program got its feet under it and enough graybeards on the board who had learned to let the advertising professionals do their thing without so much micromanaging, leaders of the NCA got it in their minds that NCA and the NLSMB should merge.
So, the current National Cattlemen’s Beef Association emerged, but not until after a fraternal struggle of the sort the cattle industry had never seen. The pro-merger people saw it as a way to enhance efficiency—one vision, one staff, one administration to pay, fewer meetings to finance. The anti-merger group—at the time mostly members of state beef councils and old-line BIC supporters—saw it as a “takeover” of the checkoff’s millions.
Debate got nasty and personal. The association divided itself into two divisions—one to develop and implement policy and the other to join the Federation of State Beef Councils on checkoff related-issues.
Some feared, though, that checkoff funds would be used to fund an association whose politics not everybody agreed with. An anti-NCBA backlash took on steam. R-CALF USA, originally formed as a localized effort to stop Canadian cattle imports, became the vessel that would be shaped and controlled by disaffected producers.
R-CALF, which emphasizes that it “never opposed the checkoff,” quickly added industry structure—most notably packer concentration—to its list of actionable concerns. As it built membership, the group gained the ears of important members of the Senate and a number of state governments.
For the first time since the early 1970s, NCBA had competition from within the cattle-producing industry. LMA leadership, suspicious of NCBA’s intentions on industry structure and many auction members, offered support for R-CALF’s organizing.
Checkoff standoff. LMA also set about trying to destroy the beef checkoff. First, the organization used its spreading country roots to seek enough signatures to demand a recall referendum. Failing in that, they filed suit seeking to have the program ruled unconstitutional. The Supreme Court finally finished that suit last year, ruling in favor of the checkoff as defined by current law.
But the anti-NCBA camp would like to see the program amended to reduce NCBA’s role and eliminate what they think is an important source of funding for that association.
At the same time, checkoff supporters would like to see the program strengthened. Namely, they say inflation has eroded the value of $1 per head. They say the program would need to collect $1.77 per head to recreate the buying power of 1985’s $1.
This is what set the scene for the “industry wide” task force formed earlier this year to think-tank improvements in the program.
LMA spokesmen will wait until their board considers the suggestions in February, but their representative on the task force was adamant in supporting more lenient rules for a referendum.
Jim Hanna of R-CALF said the group won’t support the increase in funding until their other conditions are met—conditions that would water down NCBA’s influence and allow for checkoff funding to be used for promotion of specifically domestic beef.
R-CALF will not support any changes that don’t separate NCBA from the checkoff funds. Specifically, R-CALF, LMA and NFU would like to see the act allow the CBB to contract directly for services, rather than going through industry organizations.
NCBA’s direction is not at all clear. Most producer members are probably inclined to support a stronger program. The question is whether they will be willing to take the risk of asking Congress to open the bill.
There are a couple of reasons for that. If the bill gets into Congress, R-CALF’s friends would likely try to include language stripping NCBA of its unique position with checkoff funds.
The second concern would be about prospects for a new referendum. While CBB’s surveys show strong support for the checkoff program, it is a good bet that even if NCBA got the bill it wanted, there would be a campaign against passage—a much more organized campaign than faced the program before.
Bottom line is that NCBA isn’t apt to support a program that dissolves the merger, and R-CALF and friends aren’t likely to support a program that doesn’t. It’s far from certain that either group has enough congressional might to dictate rules for a new program. It’s doubtful, however, that NCBA will want to blindly open the law to changes.
11/3/2006
Steve Cornett
advertisement
The beef checkoff, which celebrates its 20th anniversary this year, seems to have matured into a successful program supported at mid summer by more than 70% of producers. That is if you trust—and the fact that there is an “if” needed in the sentence signals problems—the survey conducted for the Cattlemen’s Beef Board.
But not everybody trusts the survey. Not everybody trusts the Cattlemen’s Beef Board, in fact.
This bodes to be a fractious birthday party with the industry’s populist organizations—including R-CALF and the National Farmers Union (NFU)—aligned with the organizations representing livestock auctions against the more mainstream cattlemen’s organizations to see how checkoff millions are used and who controls them.
The battle lines were drawn in late summer when an “industry wide” task force announced its four recommendations for changing the 20-year-old act. Those include doubling the per head collection to $2, renaming the Federation of State Beef Councils, deleting the requirement that only organizations in existence at the time the original bill passed would be eligible contractors for the Cattlemen’s Beef Board and requiring USDA to conduct periodic surveys to see if cattle producers want a new referendum.
The changes would require that Congress pass a new bill to include the changes—and that is where the battles to come will be fought. Nobody expects any major changes for quite a while, and it’s far from certain what those changes, if any, will be.
Both the Livestock Marketing Association (LMA) and the National Cattlemen’s Beef Association (NCBA) say their boards will not even consider the matter until winter meetings. R-CALF, on the other hand, put out a quick news release emphasizing they were “disappointed” in the task force recommendations.
This is not the checkoff’s first wrestling match. In fact, the program was born in controversy. At the time of its inception, the beef industry’s power structure was a bit Rube Goldbergian. The National Live Stock and Meat Board (NLSMB) in Chicago—through its Beef Industry Council—ran all beef promotion programs and chose the board members who oversaw the program. It was autonomous; the state beef councils and state cattle associations managed checkoff collection programs, some were mandated by states, others were voluntary.
But members of the NLSMB’s boards and staff were forbidden to lobby. Their money was earmarked for research and promotion.
Lobbying fell to the National Cattlemen’s Association (NCA), and they had veto power over design of the checkoff program that was presented to Congress. Congress was never a barrier to the design of self-help checkoff programs for any commodity. They pretty well delivered what the commodity groups wanted.
In this case, what cattlemen wanted was a program that they could control. The bill created the Cattlemen’s Beef Board (CBB)—with members appointed by USDA from a list of nominees submitted by industry groups in each state, but with limited powers. Concerned about creating a new industry-supported bureaucracy, operatives from NCA and Beef Industry Council (BIC) wrote the bill to make sure only “existing” cattle organizations could contract with CBB.
That prevented CBB from building a staff to manage checkoff programs. Instead, the work would be contracted through BIC and, where appropriate, through NCA.
About the time the program got its feet under it and enough graybeards on the board who had learned to let the advertising professionals do their thing without so much micromanaging, leaders of the NCA got it in their minds that NCA and the NLSMB should merge.
So, the current National Cattlemen’s Beef Association emerged, but not until after a fraternal struggle of the sort the cattle industry had never seen. The pro-merger people saw it as a way to enhance efficiency—one vision, one staff, one administration to pay, fewer meetings to finance. The anti-merger group—at the time mostly members of state beef councils and old-line BIC supporters—saw it as a “takeover” of the checkoff’s millions.
Debate got nasty and personal. The association divided itself into two divisions—one to develop and implement policy and the other to join the Federation of State Beef Councils on checkoff related-issues.
Some feared, though, that checkoff funds would be used to fund an association whose politics not everybody agreed with. An anti-NCBA backlash took on steam. R-CALF USA, originally formed as a localized effort to stop Canadian cattle imports, became the vessel that would be shaped and controlled by disaffected producers.
R-CALF, which emphasizes that it “never opposed the checkoff,” quickly added industry structure—most notably packer concentration—to its list of actionable concerns. As it built membership, the group gained the ears of important members of the Senate and a number of state governments.
For the first time since the early 1970s, NCBA had competition from within the cattle-producing industry. LMA leadership, suspicious of NCBA’s intentions on industry structure and many auction members, offered support for R-CALF’s organizing.
Checkoff standoff. LMA also set about trying to destroy the beef checkoff. First, the organization used its spreading country roots to seek enough signatures to demand a recall referendum. Failing in that, they filed suit seeking to have the program ruled unconstitutional. The Supreme Court finally finished that suit last year, ruling in favor of the checkoff as defined by current law.
But the anti-NCBA camp would like to see the program amended to reduce NCBA’s role and eliminate what they think is an important source of funding for that association.
At the same time, checkoff supporters would like to see the program strengthened. Namely, they say inflation has eroded the value of $1 per head. They say the program would need to collect $1.77 per head to recreate the buying power of 1985’s $1.
This is what set the scene for the “industry wide” task force formed earlier this year to think-tank improvements in the program.
LMA spokesmen will wait until their board considers the suggestions in February, but their representative on the task force was adamant in supporting more lenient rules for a referendum.
Jim Hanna of R-CALF said the group won’t support the increase in funding until their other conditions are met—conditions that would water down NCBA’s influence and allow for checkoff funding to be used for promotion of specifically domestic beef.
R-CALF will not support any changes that don’t separate NCBA from the checkoff funds. Specifically, R-CALF, LMA and NFU would like to see the act allow the CBB to contract directly for services, rather than going through industry organizations.
NCBA’s direction is not at all clear. Most producer members are probably inclined to support a stronger program. The question is whether they will be willing to take the risk of asking Congress to open the bill.
There are a couple of reasons for that. If the bill gets into Congress, R-CALF’s friends would likely try to include language stripping NCBA of its unique position with checkoff funds.
The second concern would be about prospects for a new referendum. While CBB’s surveys show strong support for the checkoff program, it is a good bet that even if NCBA got the bill it wanted, there would be a campaign against passage—a much more organized campaign than faced the program before.
Bottom line is that NCBA isn’t apt to support a program that dissolves the merger, and R-CALF and friends aren’t likely to support a program that doesn’t. It’s far from certain that either group has enough congressional might to dictate rules for a new program. It’s doubtful, however, that NCBA will want to blindly open the law to changes.