Checkoff programs in legislative crosshairs
March 31, 2017
by Erica Shaffer
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Bills in the US House and Senate aim to bring transparency to commodity marketing programs.
WASHINGTON – Lawmakers in the US House and Senate introduced bi-partisan legislation intended to bring transparency and accountability to federal commodity marketing programs.
Introduced by Sen. Mike Lee (R-Utah) and Sen. Corey Booker (D -NJ) the Opportunities for Fairness in Farming Act of 2017 (OFF Act) will:
- Clarify and fortify the prohibition on checkoff programs from contracting with organizations that lobby on agricultural policy;
- Establish program standards that prohibit anticompetitive behavior and engaging in activities that may involve a conflict of interest; and
- Require transparency through publication of checkoff program budgets and expenditures, and means for audits of compliance.
A companion bill, The Voluntary Checkoff Act, co-sponsored by Reps Dave Brat (R-Va.) and Dina Titus (D-NV) was introduced in the House.
The legislation is a direct result of an investigation into the activities of the American Egg Board and the resulting fallout, Lee explained in a statement.
“A recent FOIA request uncovered some troubling emails between the American Egg Board and top executives in the egg industry,” he said. “This was a classic case of ‘Big Government’ and ‘Big Business’ working together to squeeze out smaller rivals and squelch innovation.”
In 2015, the Agricultural Marketing Service’s Compliance and Analysis Program launched an investigation into allegations of misconduct by the AEB made by Joshua Tetrick, CEO and founder of Hampton Creek Inc., which manufactures the vegan mayonnaise product, Just Mayo. AMS found that while agency didn’t find evidence to substantiate all of Tetrick’s allegations, several instances of inappropriate conduct did occur including:
- Inappropriate emails between AEB staff members and a board member;
- Inappropriate emails by former AEB CEO Joanne Ivy;
- Focusing on a specific product and company; and
- Failing to adhere to the USDA Guidelines for AMS Oversight of Commodity Research and Promotion Guidelines (AMS Guidelines).
Joanne Ivy resigned her from her position as CEO of the board.
“This bipartisan legislation will bring much needed reforms to federal checkoff programs,” Booker said in a statement. “By cracking down on conflicts of interest and anti-competitive practices, and bringing additional oversight and transparency, this bill will help to level the playing field for small family farmers and entrepreneurs.”
In 2014, the Organization for Competitive Markets (OCM), a vocal critic of the beef checkoff, launched a lawsuit seeking the release of documents generated during an audit of the beef checkoff by the Office of the Inspector General for the US Dept. of Agriculture. A federal court granted intervenor status to the National Cattlemen’s Beef Association (NCBA) in October 2016. NCBA has characterized the lawsuit as a divide-and-conquer tactic by animal welfare groups attempting to weaken the beef industry and the checkoff program.
OCM founder Fred Stokes applauded the legislation. “The original intent of these checkoff programs was to help US farmers and ranchers, but they have been hijacked by corporate interests and often times foreign corporate interests,” Stokes said in a statement. “The half-billion dollars that these programs generate each year are being used to pick winners and losers in the market. They even engage in anti-market access campaigns within the same market sector or commodity. These funds have become the cash cow for organizations that work against fair competition for family farmers.”
Federal checkoff programs are mandatory participation programs administered by the USDA. The programs are funded by compulsory fees on beef, pork and other producers of agricultural products.