What a Mess!

— by Lee Pitts

Anytime a group of cattlemen get together at a convention bar or hanging on the pipes at an auction market on sale day the conversation invariably turns to the idiotic bureaucrats in Washington DC and how messed up our country is. While very true, not a word is said about the pure unadulterated greed and ineptitude displayed by one of our own industry organizations. The leadership of the NCBA would not seem a bit out of place in the halls of a corrupt Congress or at a White House cabinet meeting.

And now, thanks to all the bumbling bureaucrats get ready to have the beef tax you pay, otherwise known as the checkoff, tripled. And much of that will probably end up in the greedy hands of the NCBA. In returning this country to its former greatness perhaps the first steps we take should be to put our own glass house in order.

A Bridge To Nowhere

Ever since the NCBA hijacked the beef checkoff groups on the outside have asked the Secretary of the USDA, to fix the USDA controlled program. Instead of fixing it, the NCBA has been trying to double down by asking for another dollar per head. Since the 1985 Act doesn’t allow for that, they have been trying to double it state by state then they’d figure out a way to get their hands on the extra dough later. The current Secretary of Ag, Tom Vilsack, got so fed up with the beef politics that in 2011 he formed the Beef Checkoff Enhancement Working Group to come up with solutions to stop all the industry infighting.

The U.S. Cattlemen’s Association and the National Farmer’s Union had been especially vocal in calling for changes to the checkoff and initially they called for Vilsack to come up with all new beef checkoff under the 1996 Commodity Promotion Act. The USCA wants periodic referendums, a separation of the Federation of State Beef Councils and any policy organizations, and no increase in the beef tax until the one we have is fixed.

Vilsack must have listened to the USCA and the NFU because he told the working group if they didn’t come up with some solutions he would take matters into his own hands. The group was composed of the Farm Bureau Federation, American National Cattlewomen, Cattlemen’s Beef Board, Federation of State Beef Councils, Livestock Marketing Association, Meat Importers Council of America, NCBA, National Livestock Producers Association, National Milk Producers Federation, NFU and USCA.

R CALF was originally a member of the working group but they didn’t last as long as a housefly at a flyswatter convention. R CALF never has been good at graft and greed.

After three years of meetings the group was as paralyzed as Congress and just like them, they were acting like a bunch of bratty, bickering kindergartners. In response the National Farmers Union became so disgusted they withdrew from the working group. Said NFU President Roger Johnson, “After three years of pushing for real reforms in the beef check-off program, NFU has decided that the process has become a bridge to nowhere and a waste of time and resources. The working group was designed to bring together vested parties from across the beef industry and to attempt to reach a consensus on substantial reforms that would make the check-off a stronger, more effective tool for the beef industry. Sadly, it has become clear that in reality, there is no willingness from key players within the group to allow real reforms to take place.” When Johnson says “key players” he is talking about the NCBA and why would they want to change anything when they are getting 82% of their budget from the checkoff and are the checkoff’s biggest contractor?

Two Buck Chucks

Vilsack had seen and heard enough. In a rare bit of honesty from Washington DC, he admitted that the beef checkoff was structured in such a complex manner that it made his head hurt. “This system is really complicated, I have had staff write me memos, literally draw me pictures. I don’t know how it could be more complicated. In the end my goal is that we have healthy beef industry and that producers of all sizes can survive.”

So Vilsack came up with a “supplemental” program under the 1996 Commodity Promotion Act. Keep in mind, the current checkoff would continue so ranchers would be forced to pay into both funds. Vilsack even suggested that he might want to “sunset” the current checkoff, meaning to get rid of it or bring it under his new program. Under Vilsack’s plan the new checkoff would start in 2016, before his boss, President Obama, leaves office.

Gilles Stockton, an intelligent industry observer said, “I have been trying to wrap my mind around Secretary Vilsack’s proposal for dueling beef taxes – a new tax running in parallel with the old beef tax and producers paying twice. I have a problem with the old NCBA run beef tax. It is not that I oppose the goals of that tax but rather that I object to funding the NCBA through that tax. If the members of the NCBA want to oppose COOL and are in favor of non-competitive monopolized livestock markets, then that is their business. They may be misguided and doing the livestock industry a major disservice, but it is their constitutional right to be wrong. I just object to them being wrong on my dime.”

Continued Stockton, “I know that there are many, many producers who are just sick and tired of this controversy and would like for the beef tax to be reformed and everybody just get on with the job at hand. The trouble is that it is not possible to reform the beef tax because the 1985 Beef Act that authorizes the beef checkoff is written in such a manner that it gives the NCBA the right to control the operating committee. It is this committee in turn, which decides how to spend the money. Ninety seven percent of the time they decide to fund projects through the NCBA. It is all one big conflict of interest.

“The problem with the Beef Tax Operating Committee,” concluded Stockton, “is that they all want into the gravy train. This working group has been wasting these past 3 years having meetings to come up with this grand non-solution. None of them, not Farmers Union, Farm Bureau, US Cattlemen’s nor NCBA, should be allowed a dime of beef tax money. Farmers Union, to their credit agrees with this sentiment and has backed out of the so called deal. Note that R-Calf was never a party to this nonsense.”

Little White Lies

Thirty six other groups signed on to a letter to Vilsack urging him to immediately implement their recommendations for eliminating the conflicts of interest from the checkoff. Their letter read, “the decision-making Federation is housed, administered, owned and controlled by the NCBA” and that your checkoff dollars are indirectly subsidizing the NCBA’s administrative costs which gives them more money with which to lobby for an end to country of origin labeling and to promote the interests of big feeders and the Big Three packers.” (Which, by the way, don’t pay the checkoff. Thank you very much!) “The Beef checkoff was never intended as a vehicle to strengthen the political voice of NCBA or any other policy organization above the voices of any other organization or above the collective voice of the producers funding the program,” the joint letter concluded.

On October 16 Vilsack received a retaliation letter from NCBA and 45 of its state affiliates whose “obvious purpose was to influence governmental action and policy,” said R CALF. NCBA’s letter begged Vilsack not to form a new checkoff but to place his faith, and your dollars, in the one they currently control. The NCBA asks,”Why don’t we just enhance the one we have?” And when they say enhanced, they are talking about increasing the checkoff to two dollars per head. Add on the other buck that rancher’s in 10 states recently voted for and you have a three dollar checkoff.

Past NCBA President Scott George says that adding another checkoff is “inefficient and uncoordinated”, which were identical words the NCBA used to steal the checkoff during the merger. He also said that one of the big differences between the current checkoff and the one proposed by Vilsack is that the Ag Secretary’s “is a top down, government run program whereas the 1985 program was literally tailored by producers for producers.”

Current NCBA President McCann added, “The checkoff belongs to cattlemen, not to the USDA or any administration.” He wrote that the new checkoff gives much greater power to the USDA and was worried about increased controls by federal government.

Either the NCBA Presidents don’t know their history, think you are a big dummy or are telling fibs, for as we all know, the only way the NCBA saved their precious checkoff before the Supreme Court was to say it was a government program, was government speech, and is a USDA program run by the government.

According to R CALF, “Many, if not most or all, of the signatories on the NCBA letter are recipients of checkoff funds, either directly or indirectly.” R CALF’s Bill Bullard asked Vilsack a good question: “How are producers assured that their checkoff dollars are not being used by the NCBA and its listed affiliates to unlawfully lobby you to forego your publicly announced policy initiative to create a new beef checkoff program under the 1996 Act when the beef checkoff expressly prohibit checkoff funds from being used “in any manner” to influence governmental action or policy.”

“The NCBA’s CEO,” continued R CALF, “who likely helped draft the referenced letter, receives a sizable portion of his salary from checkoff funds. Further, many of the NCBA’s state affiliates that joined the letter are considered “two-hat” states because the state beef councils that collect checkoff funds in those states are essentially indistinguishable from the NCBA affiliated organizations the same physical office address and executive employee.”

Pig Tracks

In response NCBA fires back that they must be doing things right because 78% of producers support the checkoff. If so, why are they so afraid of a referendum? They also brag that a Cornell University study shows that the current beef checkoff returned $11.20 for every dollar invested from 2006 through 2013. Even if such a thing can be quantified, who is to say that the packers didn’t receive $11.19 of that? And they don’t even pay into it! The same professor found that the national Pork Checkoff Program had a $17.40 return on investment. Are we then to believe the NCBA is not doing as good a job as the pig people? Keep in mind that while the pork checkoff was doing all these wonderful things they lost 90% of their producers. And the beef industry is following in those same piggy tracks.

The Cornell conclusions are tainted because they were bought and paid for by the Beef Board, who also contributed the data for the survey. What university professor is going to come out with a negative report if it meant he wouldn’t get any more money from the checkoffs in the future?

R-CALF’s Bill Bullard says the current checkoff “will continue to finance the growth of NCBA’s sprawling empire that is being built on the backs of hard-working, independent U.S. cattle producers. It is the government-mandated assessments that have not, as the OIG confirms, been subjected to adequate control or oversight that first created this deplorable circumstance and is now sustaining it.”

Says Bullard, “The current national Beef Checkoff constitutes an impenetrable, quasi-governmental bureaucracy controlled by the NCBA. The real problem is that the government is continually funding the NCBA through its national Beef Checkoff Program, which the U.S. Supreme Court has determined is a program that disseminates government speech, so NCBA can lead its anti-COOL campaign on behalf of the multinational meatpackers that have been trying to defeat COOL ever since its inception.”

The current NCBA President says to, “stay tuned, there’s more to come.” We suspect he means more money to come for NCBA. Don’t be surprised if we end up with two national beef checkoffs and in a few years the NCBA will gobble up the newest one too. Farfetched, you say? Not any more than it was to think a new group that didn’t even exist at the time the beef checkoff was launched, would steal it right before our eyes in broad daylight.

Gilles Stockton says, “There is one thing that Secretary Vilsack can do that would help. He can invalidate the merger between the NCBA and the Beef Federation that happened back in 1996 on the obvious grounds that it is a conflict of interest.”

Great idea but it will never happen. And the USDA won’t call for an audit either of one of its own programs, especially one with as much to hide as the beef checkoff does.

Before we launch another checkoff perhaps we ought to perform the first complete audit of the current checkoff to see just how much money the NCBA has redirected its’ way.