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Agricultural News

Beef Board Okays Report that Recommends Changes to the Beef Checkoff- Report now goes to Ag Secretary Tom Vilsack

Mon, 02 Feb 2009 6:42:00 CST

The Cattlemen's Beef Board voted overwhelmingly this past week to ask USDA and Congress for changes to the beef checkoff program despite concerns and potential opposition expressed by the National Cattlemen's Beef Association about possible changes to the program.

In a split between the Cattlemen's Beef Board and NCBA, the Beef Board voted in a meeting at the Cattle Industry Convention to inform Secretary of Agriculture Tom Vilsack that the board would like to make changes to the checkoff. The CBB will request Vilsack seek congressional changes to the checkoff act that would allow producers to vote on a referendum that, among other things, would raise the checkoff fee from $1 per head to $2 per head.

The checkoff, which began in 1986, assesses a $1-per-head fee on a producer for every animal sold. The Cattlemen's Beef Board and the state beef checkoff councils have lamented in recent years that checkoff is having a harder time meeting the demands simply because of the increased costs over more than two decades since the checkoff began. Further, a stagnant and declining cattle population has affected the checkoff as well. In fact, the CBB this week also cut $2.5 million from the budget for 2009 because the tight cattle trade has caused checkoff collections to drop.

The Beef Board voted 70-1 to recommend several changes, including asking Congress for the authority to have an industry vote that would bump the fee to $2 a head, as well as the authority in law for the secretary of agriculture to call for further referendum votes that could increase the checkoff further amounts up to a maximum of $3 a head.

But representatives from NCBA's policy and federation divisions both told the CBB that the two divisions right now would oppose the CBB recommendations. NCBA Policy Division Chairman Bill Donald of Montana told the CBB that NCBA could not support the recommended amendments to the checkoff law. Donald said afterward NCBA doesn't want to see more bureaucracy and less efficiency out of a checkoff increase.

"Any amendment has to maintain the fairness and the strength of the beef councils to maintain their long-range plans," Donald also said.

NCBA's opposition caused a great deal of debate among the CBB members, who nonetheless still opted to advance their proposal rather than table it. CBB Chairman Dave Bateman said everyone who has worked on the proposed changes understands there will be more fights ahead.

"We have no illusions that everyone is in favor of everything that is in this document," Bateman said.

Recommending changes to the law can be a tricky subject for the CBB because the group can inform the agriculture secretary of its wishes, but cannot lobby. That means lobbying will be left up to the various producer groups such as NCBA and others who have considerable disagreement on what should occur with the checkoff. Once Congress begins seriously debating the checkoff, lawmakers will likely have their own ideas on what should be changed or added.

One area the CBB opted not to address in its proposal to USDA and Congress is the issue of changing how beef is promoted. Currently, because the checkoff collects fees from beef importers, the checkoff generically promotes beef, but an industry survey two years ago by the Gallup Organization found more than 90 percent of producers backed promotion of U.S. beef. The CBB subcommittee that worked on checkoff changes said promoting only U.S. beef would create logistical problems.

For example, there are significant amounts of beef product, such as hamburger, which are not 100 percent "U.S. beef." Furthermore, any requirement that the Operating Committee promote beef as "U.S. beef" would carry significant liability issues relating to that representation," the Beef Board stated.

The CBB recommendations for changes also call for exempting the checkoff assessment for any transaction in which an animal is sold for $50 or less. This is considered particularly important to get dairy producers on board with any change in the assessment because often times dairy producers sell calves for little or no return, but still have to pay the checkoff fee.

Under the recommendations, there would be a referendum to raise the checkoff, as well as the opportunity for additional checkoff votes at least once every seven years.

The CBB also is calling for opening the checkoff contracts to more national, nonprofit agricultural groups. The current checkoff law restricts funding to organizations that were active in 1985 when the beef checkoff law was passed by Congress.

Members of the CBB also recognized that changing the checkoff won't be a top priority for newly minted Agriculture Secretary Vilsack, who has announced few staff members and has an agenda of goals from President Barack Obama. Wayne Watkinson, an attorney for the CBB, said there shouldn't be any rush to write a letter.

"There isn't anybody to give it to at the Department of Ag right now," Watkinson said.



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