From The Ground Up

From The Ground Up
— by Lee Pitts

There´s a showdown brewing in the west that is fixing to make that little incident at the O.K. Corral look like child´s play. On one side of the street you have the NCBA, packing enough hardware and weighted down with sufficient checkoff gold to make them the odds on favorite. They´ve got the sun behind them and the fastest hired guns in their stable. But they may have overplayed their hand. Lately there´s been no shortage of up and coming cowboys who want to take them on.

The scene is reminiscent of early range wars where big ranchers hired professional gunslingers to eliminate squatters, rustlers and sodbusters. The history of ranching is marked by conflicts such as this. In range country hot words have often led to cold slabs, and someone in this fight could be headed for boot hill. It could be the checkoff as we know it, the NCBA, or small independent thinking cattle producers who are currently engaged in the economic fight of their lives.

Who Started This Fight?

The initial skirmish in this range war occurred in 1996 with the USDA approved merger that combined the National Cattleman´s Association with the Beef Board, which had controlled checkoff dollars up to that time with few vocal critics. That merger between NCA and CBB´s chief contractor, the National Livestock and Meat Board, was voted on by less than .000583% of beef producers.

The battle really heated up last spring when the Livestock Marketing Association (LMA) initiated a petition drive on behalf of independent cattle feeders, auction operators and ranchers across the country who believed NCBA was using checkoff funds to lobby against the interests of grassroots producers. In fiscal year 1997, 86% of NCBA´s total $62.6 million budget came from checkoff funds.

“It´s outrageous that NCBA is living off funds paid by family ranchers while they use our money to advocate economic policies that fundamentally threaten the future of independent family ranching in America”, says rancher Jeanne Charter, who is on the front lines of this battle.

Recent actions by the NCBA have breathed new life into the LMA´s petition drive. The straw that broke the bull´s back may have occurred when NCBA alienated many ranchers by initially opposing a petition from an independent rancher´s group, R-CALF, Ranchers-Cattlemen Action Legal Fund. Their petition would require the International Trade Commission to investigate whether cattle and beef from Mexico and Canada are being illegally dumped on the U.S. market or are being subsidized. In a conference call vote two thirds of the NCBA leaders polled were in favor of supporting R-CALF, but the weighted structure of NCBA´s voting system meant that interests representing Kansas and Texas cattle feeders voted the proposal down. That´s when all heck broke loose.

Who Speaks For Ranchers?

Beleaguered by devastatingly low prices that threaten to drive many ranchers out of business, the cattle industry is deeply divided over what economic policies should be pursued to change this dire predicament. Imports and industry concentration are the two biggest scapegoats. At issue is whether the industry should support so-called free trade agreements such as NAFTA and GATT, which the NCBA has supported in the past, and whether the federal government should take antitrust action against three multinational corporations that control over 80% of the U.S. beef packing industry. Many ranchers feel the big three packers are exploiting these trade agreements to drive down prices by dumping imported cattle and beef on the U.S. market. They see R-CALF as a positive corrective measure.

But R-CALF was dealt a heavy blow by NCBA´s initial lack of support because the government must decide what percent of cattlemen support R-CALF´s efforts in order to proceed. Because the NCBA, claiming at times to represent a million ranchers through the checkoff, does not support the three pronged R-CALF petition, its outcome is iffy. This despite the fact that ranchers have contributed well over $700,000 to the effort and, reportedly, as many ranchers have signed the R-CALF petitions as have voluntarily joined the NCBA.

Negative letters about the NCBA´s actions regarding R-CALF poured into livestock newspapers across the country, causing NCBA to rethink its position. So the Executive Committee of the NCBA came out and said they would be neutral on the anti-dumping case against Canada, would support the subsidy argument but would oppose the anti-dumping case against Mexico.

The Honorable Senator From Nebraska

Getting any corrective measures passed through Congress or initiated in Washington will be difficult without NCBA´s support. And while the NCBA claims in press releases to support two other currently hot issues, country of origin labeling and mandatory price reporting, others question their use of checkoff funds to lobby AGAINST labeling of imported ground beef and to require the packers to publicly report the prices they pay for cattle. One of those experienced marksman who´s got the NCBA in his sights is Vietnam War hero and highly respected Nebraska Senator, Bob Kerry. We quote from the November 10 edition of the Omaha World Herald:

“Kerry said he was frustrated by the lack of support for mandatory cattle price reporting from the National Cattlemen´s Beef Association in the face of the stiff opposition of packer lobbyists. The association has supported mandatory price reporting for packers but not for its member cattlemen. Kerry said a letter of opposition from the association nearly kept his proposal from gaining Senate approval in the first place. Instead, the NCBA supported a watered down version that does not include day to day deals for live cattle between cattlemen and packers. Kerry´s original proposal would have required packing houses to report price and terms of all their cattle purchases to the USDA for three years.”

So instead of a law with real teeth in it we get an NCBA supported one year study. Kerry said “the last minute wrangling over the proposal gave the illusion that something significant was being done. But the new version is a defeat for free market cattle producers and cattle growers. We lost,” said Kerry.

Kerry also said that “he will work next year for open reporting rather than secrecy, and will focus part of his attention on the NCBA. I will attempt to persuade the NCBA that it´s in the best interest of their members to have mandatory price reporting. With their opposition it´s very difficult to get it done.” In the meantime, some cattlemen are taking matters into their own hands.

Simmering Ranchers Come To A Boil

Those three issues, country of origin labeling, R-CALF and mandatory labeling forced the NCBA to show their true colors and feeder bias, and now many ranchers are calling for a new cattlemen´s organization (perhaps R-CALF?). In the very least they want NCBA´s generous allowance cut back. “The last thing we need right now,” says Jeanne Charter, “is a civil war. We hope ranchers will see through NCBA´s propaganda and join together to reclaim our voice. A lot of folks are calling for a new organization to represent producers, but if a new organization is going to have a chance of being heard, the first thing we need to do is reform the checkoff.” The words that Patrick Henry uttered throughout the original 13 colonies are now echoing through cattle country: “Taxation without representation is tyranny.”

“The tail is wagging the dog,” says Jeanne Charter. “At the NCA Convention in 1996, about 700 people voted for the merger. Now we need 120,000 signatures just to ask for the right to vote to undo that decision. The family ranchers who pay the checkoff have very little to say about how it´s spent.”

The Northern Plains Resource Council (NPRC), a Montana-based grassroots citizens organization that advocates and organizes on a wide range of family agriculture and conservation issues, has been very vocal in its criticisms of the NCBA. The group has established “The Other Side of the Checkoff Story Media Fund,” to raise money for radio and newsprint ads to counter NCBA´s public relations campaign. Currently the NCBA and the Beef Board are pouring three million dollars into a nationally coordinated, aggressive media blitz defending the checkoff.

At the NPRC annual convention in Billings, Montana, ranchers opposed to NCBA´s policies took a strictly low budget, grassroots approach to spreading their message. They distributed bright red political campaign signs, at $5 a piece, that they hope will start appearing on fences in right-of-ways across Montana and beyond. The signs, which shout “Rein in NCBA!” and “Sign a checkoff petition!”, are intended to urge fellow ranchers to rally in support of LMA´s petition drive for a referendum to repeal the 12-year-old federal law mandating the Beef Checkoff.

On another front, NPRC is administering a legal defense fund for the Charters who were sued for $11,000 by USDA earlier this fall for refusing to pay $250 in checkoff fees. In the first court battle of its kind in the nation, the Charters plan to fight USDA on the grounds that the checkoff is illegal as currently structured. The Charters contend NCBA is seriously abusing federal law that prohibits checkoff dollars from being used to either support or oppose a referendum petition drive.

Rebels From John Day

If the NCBA thought they could ride out this disturbance and that everything would just blow over they had best turn their eyes toward John Day, Oregon. In December this eastern Oregon county cattlemen´s group became the first county stockgrower association in the nation to buck the NCBA merger and national checkoff. The Grant County Stockgrowers passed a slate of resolutions calling for state disaffiliation from NCBA and checkoff reform.

These resolution included:

  1. A resolution supporting LMA´s petition for a producer referendum on the mandatory checkoff. “The mandatory checkoff law has been in existence for twelve years now without any review of it or any vote on it by those who support it. All other checkoff laws are now required to be reviewed and voted upon every seven years by those paying it. A referendum on the mandatory checkoff law was not held at the time of the merger, even though the organization was totally changed to include all segments of the industry who are in direct opposition to each other. The new organization is structured in such a way so as to give the packer and big feeder an advantage in that NCBA allows seats to be purchased on the board. The new organization, NCBA, through the infrastructure as well as politically, has consistently supported the packer and big feeder segments at the expense of the producer.”
  2. A resolution calling for passage of substitute legislation to create a directable checkoff. Along with the NPRC, the Grant County Stockgrowers hope to build a coalition of groups to win legislation in the next Congress to establish a new, “directable checkoff.” The NPRC proposal would create a Checkoff Investment Clearinghouse which would give producers the option of requesting a refund or directing their dollars to any qualified organization working to promote beef, develop markets and ensure that the industry is policed to maintain healthy competition. They would open nominations for leadership positions to be submitted by any bona-fide checkoff payer. If some producers feel that their money would be better spent at home, they would be free to elect a refund. According to the NPRC, “a directable checkoff would encourage competition among groups seeking funding, as well as provide for more accountability.”
  3. A resolution calling for an independent USDA audit of the beef checkoff. In just the past few months we have seen the General Accounting Office report gross irregularities in cotton and dairy checkoffs. The Grant County cattlemen and the NPRC would like Congress to initiate an audit and field hearings on the beef checkoff as well. They feel the NCBA is breaking the law by “being on both sides of every checkoff deal, first by proposing, then deciding, and then receiving multi-million dollar grant contracts.” The Grant County Stockgrowers wrote a formal letter to the USDA requesting such an audit. This resolution, as well as the other two, passed unanimously in their December 2nd meeting. These two groups, the NPRC and the Grant County Stockgrowers, hope that other county and state organizations will join them and pass similar resolutions with the goal of returning cattle organizations across the country to their original purpose of truly representing the grassroots producer.