By Chris Clayton
DTN Ag Policy Editor
OMAHA (DTN) -- After more than three years of trying to reshape the funding flow of the beef checkoff program, members of the National Farmers Union say it has become futile to continue the ad-hoc industry talks.
Doug Sombke, president of the South Dakota Farmers Union, sat in on meetings of the 11-member industry group over the last eight months. The working group has been trying to reach some consensus on how to change the way the checkoff operates while developing a plan that could lead to a potential increase in the $1 per-head fee.
"We've been at it for three-and-a-half years and nothing has moved from square one, basically," Sombke said Tuesday. "You have got to end the engagement at some point in time, and it looked like it wasn't going anywhere to us. It's completely stalled."
The beef industry working group has largely been a quiet affair. That was by design because groups didn't want to fight in the press. But leaders of the Ranchers-Cattlemen's Action Legal Fund complained about the process because the group has been excluded from the talks. Now, NFU members are willing to abandon the discussions as well.
NFU's legislative committee unanimously adopted a resolution on Monday recommending that the National Farmers Union Board of Directors officially withdraw from the beef industry working group.
The latest draft memorandum of understanding being passed around the industry didn't reform the checkoff or make enough changes over control of checkoff dollars.
"A number of the states involved in the beef checkoff are on that committee," Sombke said. "There are still going to be some discussions in September, but I don't know if it will change much from what the resolution will be."
Sombke said the working group was stalled because the National Cattlemen's Beef Association is unwilling to make changes that would reduce NCBA's ability to control funds. "The latest proposed memorandum of understanding changed the chairs on the deck of the ship, but it really didn't change any governance level at all," Sombke said.
"They (NCBA) wanted to stick with the status quo. They weren't looking at making any real changes at all."
Sombke said NFU's board of directors will vote to drop out of the working group when NFU holds its September fly-in to Washington, D.C. Sombke expects NFU would then ask Secretary of Agriculture Tom Vilsack to make changes to the checkoff.
"I would think this would be the next order of business," Sombke said.
With a declining cattle herd, checkoff supporters have pushed to increase the $1 per-head fee while other groups argue no increase should take place until the beef industry agrees to structural changes on how checkoff dollars are controlled, used and distributed.
Checkoff funds controlled by the Cattlemen's Beef Board are distributed through contracts approved by a 20-member operating committee made up of 10 members from the Cattlemen's Beef Board and 10 members from the Federation of State Beef Councils. The federation is a division of NCBA and shares offices and other expenses.
The main complaint over this arrangement is that NCBA is almost exclusively the main contractor for Cattlemen's Beef Board funds for promotion, research and information about the industry. According to the checkoff board's fiscal 2013 annual report, NCBA contracted for $33.66 million out of $34.49 million in contracts, a ratio of 97%. In 2012, NCBA received more than 98% of the contract dollars.
While NCBA uses those funds to promote the entire beef industry, the group's policy division is usually on the opposite side of political battles with groups such as NFU and R-CALF. These groups and others have fought to separate the federation from NCBA's policy division.
In a statement, Bob McCan, president of the National Cattlemen's Beef Association, said NCBA wants to make the program "as efficient, effective and accountable to producers as it can be."
McCan noted there have been differences of opinion on the working group and efforts to make changes.
McCan's statement makes the case that a new committee structure made up of the Federation of State Beef Councils and Cattlemen's Beef Board means "no policy organization representation." Yet other groups argue the federation is a division of NCBA, thus that structure fails to provide reform.
McCan added that NCBA remains committed to its state beef council partners and the Federation of State Beef Councils division. He cited that was the way the structure was created in the Beef Checkoff Act & Order and supported heavily by producers in a 1988 referendum.
"We will continue to work with other industry organizations to look for ways to maximize the efficiency and effectiveness of the program," McCan stated. "However, we should be careful about jeopardizing a beef checkoff that has overwhelming support from producers, and is having terrific success domestically and internationally."
DTN sought an interview with McCan or someone representing the federation. A spokesman for NCBA said the group will stick with its statement and not comment further at this time.
FARM BUREAU DISCUSSIONS
Mary Kay Thatcher, a lobbyist for the American Farm Bureau Federation, said several attempts have been made to create industry agreements over the past three years, but eventually one group or another rejects the proposal.
"This MOU may be closer to an agreement than we ever have before, but we were all still going back to our individual groups to discuss it," Thatcher said.
Thatcher added that Farm Bureau members likely will discuss the future of the beef checkoff at state meetings and the American Farm Bureau annual meeting next January.
Texas cow-calf producer Chuck Kiker, who represents the U.S. Cattlemen's Association on the working group, said USCA would like to see the Federation of State Beef Councils separated from NCBA. Moreover, any effort to increase the checkoff must come through a producer referendum.
"This is a process we have gone through. There's work on an MOU that's a very small step that still hasn't been worked out yet and may never get worked out because there is still lots of disagreement," Kiker said.
Chris Clayton can be reached at email@example.com
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