Money & Business

Senate Bill Aims to Reform Federal Checkoff Programs

By / Jul 28, 2016 (iStock/Thinkstock)

A bipartisan bill recently introduced into the Senate would require that industry-funded checkoff programs disclose their budgets and refrain from lobbying. The legislation is a response to controversies involving some checkoff boards in recent years.

Sen. Cory Booker (D-NJ) may have won an enthusiastic response to his speech at the Democratic National Convention this week, but on the day-to-day front, he’s earned quieter praise—specifically from farmers—for sponsoring legislation that he says will improve transparency and accountability in federal commodity checkoff programs.

Administered by the U.S. Department of Agriculture, checkoff programs are designed to support research and promotional initiatives—such as the iconic “Got Milk” and “The Other White Meat” marketing campaigns—for agricultural products. The programs are funded by mandatory fees paid by the producers of beef, pork, eggs, and other products.

But concerns have risen about conflicts of interest and potentially anticompetitive activity by some checkoff programs. In one example cited by Booker and the bill’s cosponsor, Sen. Mike Lee (R-UT), the American Egg Board was found to have worked with companies in the industry to limit the growth of Hampton Creek, the maker of the vegan mayonnaise substitute Just Mayo.

“When checkoff programs engage in anticompetitive activity, it is a threat to a dynamic and informed free marketplace,” Booker said in a news release. “This bipartisan legislation will help increase transparency and restore trust in checkoff program practices.”

Among other things, the Commodity Checkoff Program Improvement Act would prohibit checkoff programs from contracting with firms that lobby on agricultural issues, prohibit board members from activities that involve a conflict of interest, and require the programs to disclose their budgets and spending.

After the bill was introduced, 143 associations, businesses, and individuals sent a joint letter to the sponsors and other Senate offices supporting the bill. Among them was R-CALF USA, a group of cattle ranchers that recently filed a lawsuit over the beef checkoff program’s promotion of non-U.S. beef.

“Our joint letter provides clear evidence that independent cattle producers are tired of the conflicts of interest, misspending, and other abuses rampant in our beef checkoff program,” R-CALF USA CEO Bill Bullard said in a news release. “We are now appealing to Congress to take action to stop these commodity programs from harming the very individuals who are forced to pay into the checkoff funds, such as the $1 per head cattle tax that U.S. cattle producers must pay each time they sell an animal.”

Outside the agricultural industry, the bill was welcomed by the Humane Society of the United States, whose president and CEO, Wayne Pacelle, claimed that lobbying activities undertaken by checkoff groups “are often aimed at undermining critical protections for animals.”

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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