Checkoff programs in the spotlight again

I’ve been writing about commodity checkoff programs since the early 1990s and found two things to be consistently true. Many people support the concept of letting farmers voluntarily invest their own dollars in research and promotion. A smaller, but more vocal subset of people, is passionately opposed to checkoffs.

In more recent years, the opposition has included leaders from the animal rights movement, who joined forces with existing critics in an effort to stop funds flowing to the so-called “barnyard” groups they also oppose.

You’ll likely hear more from both sides in the coming months as opponents launch one of the most vigorous campaigns to date, seeking checkoff reform as part of the next farm bill.

The Opportunities for Fairness in Farming Act, which was debated during consideration of the 2018 farm bill and reintroduced since then, is sponsored by an unlikely assortment of lawmakers from both ends of the political spectrum. Sens. Mike Lee, R-UT, and Cory Booker, D-NJ, are leading the push in the Senate, while Reps. Nancy Mace, R-SC, and Dina Titus, D-NV, have proposed the bill in the House.

The measure would create new restrictions on the programs, including a prohibition on contracting research and promotion work out to organizations that lobby Congress or federal agencies.

The OFF Act would also prohibit board members or employees of checkoff programs from engaging in "any act that may involve a conflict of interest,” require checkoffs to publish their budgets, require contracts to describe the goods and services provided, and require periodic audits by the General Accountability Office and the USDA’s inspector general. 

The bill was proposed as an amendment to the Senate version of the 2018 farm bill and received votes from 38 members, whose ranks included Sens. Chuck Grassley, R-IA, and Jon Tester, D-MT. The backing of 38 senators is nothing to sneeze at.

Checkoffs are programs operated under the supervision of the U.S. Department of Agriculture that are responsible for marketing the commodities they represent, as well as conducting research into their uses. They are some of the most intensely watched programs at the agency. Twenty-two of these programs currently exist, representing everything from eggs to soybeans to Christmas trees—all funded through mandatory fees paid by producers.

Organizations that contract with checkoff programs can’t use the funds they receive to “influence legislation or government policy,” though they are allowed to use non-checkoff dollars to lobby, according to guidelines published by the USDA. Checkoff board members acting in their official capacity are also prohibited from lobbying, though they are allowed to do so as individuals, the guidelines say.

Checkoff boards are also required to submit regular accounting reports to the USDA’s Agricultural Marketing Service and are subjected to independent audits, which are reviewed by the Agricultural Marketing Service, the guidelines say. 

Checkoff programs can be established or dismantled through referendums, which are typically held every seven years or so, though they can also be requested by 10% or more of assessment payers, according to AMS. The secretary of agriculture also can call a referendum at any time. 

Individual checkoff programs have long been tangled in politics—with proponents arguing that the research and marketing efforts they fund are important to keeping farmers competitive, while opponents have expressed distrust over whether the money from the mandatory fees producers pay is properly spent.

An unlikely alliance that includes cattle producer group R-CALF USA, the National Farmers Union, environmental groups like the Environmental Working Group and a number of different animal rights organizations, including the American Society for the Prevention of Cruelty to Animals, Mercy for Animals and Attorneys for Animals, sent a letter in late March to the chairs and ranking members of the Senate and House Agriculture Committees urging them to enact “meaningful reforms” to checkoff programs. 

The coalition of around 131 groups, which also included the Institute for Agriculture and Trade Policy, the National Family Farm Coalition, Farm Action Fund and the National Dairy Producers Organization, argued that the programs have “well-documented histories of waste, conflicts of interest, misuse of funding, anti-competitive behavior, and other related issues.” The letter’s signers also included some local cattle producer groups such as the Kansas Cattlemen’s Association, the Iowa Stock Growers Association, the South Dakota Stockgrowers Association and the Southern Colorado Livestock Association.

One important figure in the effort could be Marty Irby, who served on Rep. Mace’s campaign steering committee and has been chief operating officer for FreedomWorks, a conservative organization, as well as a lobbyist for the Humane Society Legislative Fund. He was recently hired by Farm Action Fund to lobby for including the OFF Act in the upcoming farm bill. Irby also serves on the board of the Organization of Competitive Markets.

Opponents of the OFF Act followed with their own letter to the committee leaders. Eighteen trade groups within industries served by checkoff programs argued the bill would “set producers back decades in the work which has been done to promote our commodities and improve the businesses and livelihoods of our members. They also said that the bill “would not create any new checks and balances to ensure compliance and fairness,” which they said are “already subjected to rigorous compliance protocols, both internally and by USDA.”

The American Farm Bureau Federation, the American Honey Producers Association, the American Mushroom Institute, the American Sheep Industry Association, the American Soybean Association, the International Fresh Produce Association, the National Cattlemen’s Beef Association, the National Christmas Tree Association, the National Cotton Council, the National Milk Producers Federation, the National Pecan Federation, the National Pork Producers Council, the National Potato Council, the National Sorghum Producers, the National Watermelon Association, the North American Blueberry Council, United Egg Producers and the U.S. Peanut Federation all signed onto the letter opposing the legislation. 

The House Agriculture Committee hopes to educate their members about how checkoffs operate and bring a “holistic” perspective to this debate, according to a staff member for the House Ag Committee. They’ve asked the Congressional Research Service to write a report that will hopefully be available before the next farm bill is written.

Editor’s note: Sara Wyant is publisher of Agri-Pulse Communications, Inc., www.Agri-Pulse.