We Were Played: USDA Moves To Take Over The CheckoffWe Were Played: USDA Moves To Take Over The Checkoff
October 2, 2014
It wasn’t all that long ago that all of the industry organizations were supposedly collaborating to develop a consensus plan to make improvements to the national beef checkoff. The upshot of that endeavor, however, made it obvious how much of a political game the checkoff has become, as members committed to destroying the checkoff sabotaged the effort by abandoning the process and asking USDA to step in and take control of the program.
It’s a little disconcerting that the other organizations negotiating in good faith seem to have been so successfully manipulated and were unaware of the maneuverings taking place to circumnavigate their good intentions. Nevertheless, USDA let it be known this week that it plans to disregard the working group’s suggestions and take control of the program via the 1996 Commodity Promotion, Research and Information Act.
I’m assuming that USDA’s grab of the program will be separate from the existing act and order, as I’m sure there would be significant hurdles to overcome to circumvent it. It’s certainly not unusual, however, for regulatory agencies to usurp control without being given authority to do so by the legislature, or by using existing law. That was never the intention in the case of the 1996 law. However, Congress may show some signs of resistance when the agency essentially decides to circumvent existing legislation.
The USDA Secretary’s planned takeover of the checkoff calls for a new checkoff to be implemented in 2016. A referendum would be held on the new checkoff within three years, and the details would be released by the end of this year or early 2015. That means the new rules will have to be published and comment periods held. The timeline obviously means that the intent is to implement a new program before a new administration takes over in 2016.
It seems to be a new model for doing things, where a lame-duck administration that is stymied by a partisan and deeply divided legislature acts on its own to circumvent the legislative process, write its own laws, and enact its agenda.
From the beef industry’s perspective, there is some concern about a government-run, top-down checkoff structure eliminating the producer grassroots involvement that’s been the hallmark of the current program. Ironically, however, I’d argue that one of the largest problems with the current checkoff has been excessive and counterproductive government intervention, which is likely to only increase.
This latest announcement almost ensures that any proposal to raise the checkoff assessment is dead, and that all industry efforts will be focused on raising funds on the state level. In the end, none of the major players seem neither surprised by the USDA Secretary’s announcement, nor overly concerned about the results.
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The great irony is that the checkoff, by anyone’s measure, has been very successful. Every dollar invested provides a return to producers of at least 6-10 times on their money. In fact, a recent study placed the return at $11 or more, though that may be overstated as it’s difficult to determine the value of all the factors that are helping to grow and strengthen demand. Regardless of the exact figure, if we could make other investments with those kinds of returns, we’d all be very wealthy.
This isn’t the first time that government solicited input from affected parties as a cover to move forward with whatever plan it was hiding under the covers. But it does finally prove that this controversy has never been about the checkoff itself, but a difference in political viewpoints between organizations. The checkoff was viewed by those who did not agree with the National Cattlemen’s Beef Association’s (NCBA) policy side as a way to harm NCBA.
No one can seriously argue that the firewall between policy and promotion was ever crossed. Nor can anyone seriously argue that the dollars will flow in any other direction, because the expertise and ability to operate these programs has been concentrated. It is likely, however, that the government will assume these roles, but these are roles that government cannot, or at least has never been able to, do effectively.
In the end, it’s mostly semantics and political gamesmanship. I think the results affirm that the creation of an NCBA umbrella by the industry did improve efficiencies and marketing effectiveness. However, it also fell victim to the political divide that now characterizes a good part of agriculture. Those entities opposed to NCBA were successful in trying to link the two sides of NCBA. Separate or not, however, NCBA’s policy side will continue to represent its members.
A commodity industry desperately needs a checkoff in order to remain competitive, and the beef checkoff has been a very successful program. However, NCBA will always represent the grassroots principles of its members, no matter how much certain elements disagree with those views. I also believe that producers have not only sufficiently seen the economic benefits of the checkoff and understand the value of building demand, but that those who wish to destroy our industry by destroying the checkoff will be sadly disappointed.
The industry may be losing the checkoff as it was originally constituted, but we will find a way to make the investment in our product. We’ll also increase the effectiveness tenfold if we can eliminate the government oversight and control of the program.
The saddest part of all this isn’t the political games and maneuverings, but the realization that we have truly met the enemy and it is ourselves. At one point, we were afraid that outside groups would succeed in destroying the checkoff because they didn’t want the industry to succeed. They largely failed. However, those who have harmed it are those we thought were fighting for the industry – our own industry groups bent on vying for political power, as well as a politically motivated and power-hungry USDA.
The opinions of Troy Marshall are not necessarily those of BEEF Magazine and the Farm Progress Group.
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