Vilsack calls for new beef checkoff program

(Note: This story was updated on Oct. 13 to clarify that the United States Cattleman’s Association is still a member of the beef checkoff enhancement work group.  An earlier post stated that the USCA had left the work group)

WASHINGTON — A resolution to a three-year impasse in the national beef checkoff enhancement work group suggested by U.S. Secretary of Agriculture Tom Vilsack may do more harm than good, according to members of the National Cattlemen’s Beef Association.

“This is a program that has a lot of ownership and beef producers decide where the funds are allocated,” NCBA president Bob McCan said of the current beef checkoff program during an Oct. 3 news conference.

McCan’s comments came just three days after Vilsack’s announcement of a plan to establish a companion check-off program under the 1996 Generic Commodity Research and Information Act.

Checkoff history

The beef checkoff program was established as part of the 1985 farm bill as a means of raising funds for beef promotion and research via a $1 per head assessment on the nation’s beef producers. Changes to the program can only be made by an act of Congress.

The beef checkoff enhancement work group — with representation from the American Farm Bureau Federation, American National Cattlewomen, Cattlemen’s Beef Board, Federation of State Beef Councils, Livestock Marketing Association, Meat Importers Council of America, National Cattlemen’s Beef Association, National Livestock Producers Association, National Milk Producers Federation, National Farmers Union and the United States Cattleman’s Association — was brought together by Vilsack in September 2011 to recommend improvements to the beef checkoff program.

The primary impetus for establishing the work group was a decline in revenues through the assessment program.

In a USDA report last month, Vilsack told a group of National Farmers Union members the work group’s efforts have been “satisfactory to no one — it doesn’t satisfy those who want more money in the checkoff and it certainly doesn’t satisfy those who want a different system.”

“Number one, there is not enough money in the checkoff program and there are also deep concerns with the decision-making process,” Vilsack said. “Either we can keep doing what we are doing, or you can delegate to me the responsibility to ultimately see if there is another avenue that can be approached.”

The work group’s key unresolved issues, McCan said, include raising the per head assessment from $1 to $2, with a possible refund of the increased amount for those members who choose not to participate; changes to the checkoff’s beef promotion operational committee nominating process; and establishing a time frame for a regular referendum. Currently, a referendum requires at least 10 percent support via petition.

NCBA Chief Executive Officer Forrest Roberts said the work group was in the process of completing a memorandum of understanding outlining these points, to be ratified by members of each of the 11 representative organizations, when the NFU left the group.

USDA responds

Vilsack responded Sept. 30 by proposing a supplemental checkoff program, which would include an additional $1 per head assessment. It would begin in 2015 or 2016, and would continue for three years before a producer referendum could be called.

Roberts said Vilsack has been largely helpful to the work group, and said the proposed checkoff program is a move Vilsack has the power to make without the support of Congress, which amendments to the 1985 checkoff program would require.

“He said this was not the approach he wanted to take, but he felt the work group has not delivered a solution,” Roberts said at the Oct. 3 NCBA news conference. “But the current program has an 80 percent approval rating from beef producers and an $11.20-per-dollar return on investment. We have already had to be flexible to find a solution the industry could work with.”

Shocked reaction

Scott George, a beef and dairy farmer from Wyoming and immediate past president of the NCBA, said that as a work group participant since its inception, he was surprised by Vilsack’s decision. And he wasn’t alone.

“When I came back home, people were shocked,” George said. “They were asking ‘is there going to be a parallel checkoff program?’ and ‘why do we need a supplemental program, why can’t we enhance what we have?’ Beef producers need to get educated (about the new program). It is a very top-down, government-driven program and is a major step that doesn’t need to be taken.”

Disagreement

In a Sept. 15 press release, prior to Vilsack’s announcement, U.S. Cattleman’s Association President Jon Wooster strongly disagreed with George’s view, even though his organization remains a part of the working group.

“Cattle producers deserve an enhanced checkoff program now, not a decade from now,” Wooster wrote. “The secretary’s actions are needed and timely and USCA looks forward to engaging with USDA and members of our industry in rewriting a new beef checkoff order in a manner that addresses the needs and interests of all U.S. cattle producers.”

Moving forward. McCan said the work group plans to continue its efforts to amend the 1985 program and gain consensus throughout the industry.

“We feel the 1985 program is far superior for many reasons,” McCan said. “It has been efficient and highly successful.”

When asked if he felt Vilsack would reconsider amendments to the 1985 checkoff program if that consensus was demonstrated, McCan said, “It hard to predict what that fellow is going to do.”