George looks at checkoff proposal during WSGA convention

Casper – As cattlemen and women from around the state of Wyoming gathered during the 2014 Wyoming Stock Growers Association (WSGA) Winter Roundup, Scott George, immediate past president of the National Cattlemen’s Beef Association, looked at Agriculture Secretary Tom Vilsack’s proposal for a second beef checkoff. 

“Secretary Vilsack has proposed a new checkoff, and he has done it under the auspices of the 1996 Generic Commodity Act,” said George on Dec. 3. 

George looked at the differences between the current checkoff and Vilsack’s proposal and noted that it is important for the industry to express its concerns related to a second checkoff. 

Early work

Work on reforming the beef checkoff began in 2011 with the creation of the Beef Checkoff Enhancement Working Group (BCEWG), which brought together 11 organizations.

“There were several enhancements that we talked about and agreed on,” George said. “There were also some wild demands that most of the group didn’t agree with, so we didn’t suggest moving forward with those.”

Some changes that were made include allowing non-profit organizations formed after 1985 to serve as checkoff contractors and removing the National Cattlemen’s Beef Association and American National CattleWomen from the Beef Promotion Operating Committee (BPOC), which decides how checkoff funding is spent.

Increasing the checkoff’s funding was also discussed.

Conflict

At the end of 2013, Secretary Vilsack called the BCEWG to his office and expressed his concern that the checkoff was underfunded. He urged the group to come to a consensus on changes to be made to the checkoff moving forward. 

“We agreed to have three facilitated meetings, and we actually ended up with four big issues we could take to our membership so we could move forward,” George said. 

Areas for change

George noted that the first area was concern about the BPOC. 

“Half of the BPOC members come from the Federation of State Beef Councils and half come from the Cattlemen’s Beef Board (CBB),” he said. “They work hard to make those decisions.”

The members of the BPOC are elected, so the BCEWG decided that all member groups should have a voice in who is nominated. 

“There were also other discussions about a referendum,” George continued. “Some groups absolutely wanted a referendum every so many years.”

However, the extreme cost of referendum – between $1.5 million and $2 million – meant that the expense would be difficult to support. As a result, a compromise was reached in recommendation of a referendum similar to that in the soybean checkoff. 

“In that model, in a certain month, all producers across the country can go into their FSA Office and sign up,” George explained. “If 10 percent of producers go in, a referendum is held. It is not an automatic referendum, but it creates an organized way to get a referendum.”

Refunds

Producers also wanted a refund provision. 

“Some groups wanted to take their money out of the checkoff,” George explained, noting, however, that large groups opting to take a refund could dramatically impact the checkoff. “We compromised on the refund.”

The BCEWG decided that the initial checkoff dollar that is currently in place would remain mandatory. However, the additional proposed one dollar would have a refund provision.”

“Those who don’t like the increase can get their money back,” George said. “We had lots of compromises.”

The final change that was agreed upon by the group was the recommendation for an additional one dollar to the checkoff. 

Working together

“As we worked together, we agreed at the end of every meeting,” he said. “We didn’t come out with anything until we had a Memorandum of Understanding (MOU).”

However, following the agreement, the National Farmers Union decided they did not support the MOU, and Secretary Vilsack called another meeting in Washington, D.C., excluding CBB and the Federation of State Beef Councils. 

“Secretary Vilsack told us that because the group had failed to come to consensus, he was going to institute a new checkoff under the 1996 Generic Commodity Act,” George explained. “He said he was going to ask questions and get feedback, and after three years, a referendum would be held.”

The new order creating a second checkoff would be in addition to the existing program. 

Differentiating acts

The beef checkoff that producers are familiar with today was established under the 1985 Beef Promotion Act. Vilsack’s proposal is to develop a checkoff under the 1996 Commodity Promotion, Research and Information Act. 

The two pieces of legislation are very different in many aspects. 

First, George pointed out that the 1985 Act was developed by beef producers for beef producers to increase demand specifically for beef. 

On the other hand, the 1996 Act was developed by government to create promotions for those commodities where no other legislation exists. 

Additionally, the 1985 Act recognizes and protects the role of qualified state beef councils and the Federation of State Beef Councils, while the 1996 legislation provides no such assurance for involvement of those groups. 

Government power is limited in the 1985 legislation, but the 1996 Act provides much more power to the government and Secretary of Agriculture. 

Membership and payments

Limitations on board members governing the checkoff are made in the 1985 Act, requiring that members be cattle producers and importers. However, the 1996 Act provides for appointments from the general public. 

George noted, “This means the Secretary of Agriculture may appoint one or more members of the general public to the Board. He could appoint Wayne Pacelli of the Humane Society of the United States or someone from those groups who regularly and actively oppose our industry.”

Finally, the 1996 Act does not require payment from importers, while the 1985 Act requires importers to pay assessments on a per-pound basis. 

“The bottom line is, grassroots producers have been the cornerstone of the beef checkoff program since it was first enacted in 1985,” George said. “There is no required element of the 1996 Act that increases grassroots influence in national checkoff efforts.”

“Furthermore, the 1996 Act assures no protection to state beef councils and gives much greater power to the federal government,” George commented.

Producer input

While the BCEWG continues to meet in an attempt to develop an MOU to amend the 1985 Act and Order with the provisions agreed on, George said the group hopes to provide Secretary Vilsack with an alternative to a new checkoff in their plan.

“Our best option now is simply to comment on Secretary Vilsack’s proposal,” George emphasized. “Spend a little time, review the proposal and questions and decide if the 1996 Act is something to support or oppose. I encourage everyone to comment.”

Secretary Vilsack will draft the order after comments are received and will ask for comments on the proposed order. 

Comments must be submitted by Dec. 10. Submit comments at regulations.gov. 

For more information, visit wylr.net, beefusa.org or regulations.gov. 

Saige Albert is managing editor of the Wyoming Livestock Roundup and can be reached at saige@wylr.net.