Vilsack Cautions Cattlemen on Restructuring Plans

Agriculture Secretary Tom Vilsack has contacted officials of the National Cattlemen's Beef Association to convey his "serious concerns" with proposals the group is developing for the beef checkoff program, and to urge caution as the organization proceeds to assure that it not run afoul of legal requirements governing checkoffs.

At issue is the adequacy of proposed firewall between NCBA and the beef board that operates the checkoff program. NCBA is a voluntary membership organization that lobbies for policies that benefit those members. The beef checkoff program is funded by compulsory collections made at the point of sale of cattle. Checkoff funds are intended to finance research, promotion and education programs that have the goal of increasing the demand for U.S. beef. By law, checkoff funds cannot be used for lobbying efforts.

Nearly two years ago, NCBA formed a governance task force that has been developing recommendations for changing NCBA's governance structure. After the task force submitted a draft of its recommendations to the beef board, the board responded by expressing its concerns about the recommendations.

Specifically, said the board, "We think it is very likely that members of other beef-industry trade organizations paying into the beef checkoff would be very distressed to learn that some of the monies they have invested in programs of beef promotion, research and education are being expended to develop regulatory or membership policies of NCBA to which they may be diametrically opposed. We strongly encourage additional consideration by the [governance task force] about the wisdom of using checkoff funds to reimburse expenses incurred while participating in policy development."

Secretary Vilsack expanded on this idea in a letter to NCBA officials. He noted that USDA's Agricultural Marketing Service has oversight over the beef checkoff program, and that in any final NCBA structure, " AMS must be able to discern how 100 percent of the beef checkoff funds are used. This is a critical oversight component that your current GTF [governance task force] [governance task force] recommendations would not necessarily provide."

The secretary also pointed out the critical need for an adequate firewall between policy and checkoff funded activities. However, he says, "NCBA's reorganization proposal would, instead, weaken the firewall between policy and check off funded activities, thereby jeopardizing the beef checkoff program and set a bad precedent for checkoff programs in general."

And, Vilsack notes, it is important to remember that beef and dairy producers, as well as importers, are mandated to pay into the beef checkoff program "and they need concrete assurances that their monies are used as intended by law, and the generated funds support the interests of all producers and importers, not just NCBA members."

NCBA says the firewall between it and the beef board has worked well in the past and would continue to do so under the proposed new structure.