The Cat is Out of the Bag
Op-Ed by Gilles Stockton, Montana Cattlemen’s Association Director
If you need an example of the “Washington Swamp,” look no further than the Beef Checkoff Tax. After 38 years of non-accountable “government speech” imposed on cattle producers, the Beef Checkoff Tax has resulted in a 22-pound decrease in per capita beef consumption, a market owned and controlled by a packing monopoly, and 4.1 billion pounds (per year) of market killing imported beef not labeled as to country of origin. The National Cattlemen’s Beef Association’s (NCBA) stranglehold on the checkoff tax is total and totally unaccountable. They allege great benefits but can show no proof that those of us who pay the tax can discern.
The Department of Agriculture (USDA) protects the NCBA by preventing a full audit. In what must have been an accidental lapse in judgment, USDA allowed one very partial audit in 2010 and found that NCBA was misusing the Beef Checkoff Tax to the tune of $22,000 per day. That revelation was quickly covered up. No further auditing has been conducted.
On January 9th the Montana House Agriculture Committee held a hearing on the proposed Montana Cattle Committee plan to authorize an additional $1.00 checkoff tax. Up until this hearing, we had been assured that the additional dollar would be spent in Montana to promote Montana’s cattle industry. We learned, instead, that this project will parallel and augment the NCBA.
There is plenty that is wrong about the Montana Cattle Committee proposal:
The governor appoints the governing board. There is no reason that what is billed to be a voluntary program should be politized.
Producers will pay an additional dollar when they pay their Beef Checkoff Tax and would then have 45 days to request a refund. Why? If the program is voluntary, make it voluntary at the time of collection.
Rather than voluntarily paying the new tax when we pay the per capita fee, the proponents chose, instead, the more complex and expensive method of collecting through brand inspections.
This tax will become law by a majority of the people voting, not a majority of the 9700 cattle owners. A minority can, therefore, vote this in.
It is proposed to use this tax to advertise Montana cattle to feedlots in other states. Why? Montana cattle already have a reputation that commands a premium. What we don’t have is an honest market for those cattle.
There are numerous people and organizations who have been developing “direct to consumer” demand for Montana raised beef who have not been consulted. It is these direct marketers who have created the only “new” and “dynamic” market increasing both demand and prices. Surely, this is where the checkoff tax should be invested and an avenue should be available for them to be represented on the governing board.
In the legislative hearing there was concern from the House Agriculture Committee that this program would be administratively expensive. This is a very legitimate question. The Montana Beef Council (MBC), which administrates the current checkoff tax, has gone completely off the rails. Sixty-two percent (62%) of the one million dollars they have to spend goes to salaries and other administrative expenses. Out of those one million dollars, only $218,250 is spent promoting beef consumption in Montana.
However, the MBC already has administrative structures in place, along with a board representing the seven major cattle organizations. The MBC obviously needs to be reformed, but that might be easier and less expensive than establishing an entirely new agency.
Emulating and contributing to the failed NCBA controlled Beef Checkoff Tax cannot have a good outcome. For that reason, the current proposal for a Montana Cattle Committee is not acceptable. Money strategically spent within the state to promote the direct market of our beef could be beneficial. How to do that while keeping the program non-political, innovative, and administratively lean is the challenge. It’s worth doing if done correctly, but the Montana Cattle Committee concept, as it now stands, needs to be more carefully thought out.
