|
|
Give an inch, take a mileBy Ken Root Agriculture's greatest promotional strength is its commodity checkoffs. But for these producer funded, government administered, programs it is the best of times and the worst of times. The checkoffs are a generation old. The beef checkoff became law in 1985; pork followed a similar time line and soybean promotion began in 1991. All have been in existence so long that they have developed their own culture and power base. All have stood a challenge from producers who saw the benefits going to another sector or who did not want to be part of a mandatory program. But the greatest challenge ahead may come from limited funding, commodity organization infighting and government itself. The best of times are being enjoyed by the soybean checkoff which derives one half of 1 percent (.5 percent) of the net market price of soybeans. With the price per bushel being double the traditional value, the coffers are brimming. But, along with mandatory contribution, there is also requirement that all funds go to promotion, research and consumer information. That means none of the funds can go toward legislative programs that are a major element of the American Soybean Association (ASA). In a wink by USDA and a blink by the United Soybean Board (USB), which determines the spending of checkoff funds, the international marketing division of the American Soybean Association was purchased for $6 million. This money is being paid to ASA over a ten-year period. It is not encumbered, so it may be used for political action, lobbying, etc. This translates into funds being shifted from their stated purpose to the arbitrary use by the grower organization. Why? Because that is where the greatest threat to USB exists. Producers are almost powerless to change the program due to a provision that requires 60,000 to actively petition USDA to have a referendum vote. But the grower organizations (state and national) can make life miserable for USB. The next peace offering is for USB to pay the association dues of growers so they may be members of state grower organizations. The third is a move by the Soybean Opportunity Task Force (SOTF) to reapportion USB so most of the control lies in the hands of the three states that produce 41 percent of the nation's soybeans. The objective is supposed to be research, promotion and consumer education but it appears the real goal is controlling turf. The ASA meeting at Commodity Classic, this month, may reveal how serious this rift is between the organizations. Not to be outdone by soy, who shifted $6 million to its producer organization, pork shifted $60 million. The National Pork Producers sold their "The Other White Meat" slogan to the National Pork Board (NPB) for that amount to be paid over a ten-year period. The slogan had been used by NPB for its lengthy and successful campaign without ownership but was purchased by NPB last year "so someone else wouldn't use it." Pork is now undergoing the challenge of producer consolidation and reduced funding as their checkoff requires payment of 40 cents per hundred dollars in value. One pork producer, Smithfield Foods, controls well over 20 percent of the industry in both production and processing. Imagine the clout of that entity and the loss in funding if they find a way to keep their contribution and spend it themselves. Due to the checkoff provision of "one vote per producer" whether they have one hog or one million, the pork checkoff was defeated during the Clinton administration but reinstated as President Bush took office. Through legal maneuvers inside USDA and a lawsuit from the Michigan pork producers, again in the blink of an eye, the program was changed and the entire petition and voting system, conducted by the Glickman led USDA, was dismissed. All this points to the increased control of the checkoff programs by government. Even though producer funds are mandatorily appropriated and producer boards spend hundreds of hours in deciding spending programs and apply oversight to assure contractors carry out their wishes, it appears the real control lies in the hands of bureaucrats who see commodity checkoffs as their domain. In the bitterest fight over a checkoff program, the Cattlemen's Beef Board (CBB) prevailed in a Supreme Court challenge brought by the Livestock Marketing Association. To win, the cattlemen put forth the premise that the actions of the checkoff were "government speech" and not "commercial speech" as claimed by the livestock marketers. The court concurred and the beef checkoff remains intact. However, beef now wants to double the producer contribution ($1 to $2 per head) and will, by past interpretation of the act, have to risk a vote by producers to do so. In November 1999, LMA attempted to get a producer vote and submitted 146,000 producer signatures that the USDA rejected when their auditors said the valid count was less than 10 percent of producers. Will the CBB get more favorable treatment on this request or will USDA find a way to increase the assessment without consulting producers? The answer may show what the Supreme Court ruling of "government speech" really means. The checkoffs have done an immense amount of good. They have forced independent industries to cooperatively fund programs that have increased consumer demand and developed new uses for low value commodities in the United States and abroad. The challenge is in keeping the spirit of the programs alive and not letting incumbency and power distort them into political or parochial goldmines for the few.
2/18/08 Date: 2/14/08
Copyright/Privacy
Copyright 1995-2012. High Plains Publishers, Inc. All rights reserved. Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com |
|
