“We put a total of 14 options on the table to make it (the Beef Checkoff) a more fair and balanced program, and every one was rejected because it took NCBA out of the drivers seat.”
That’s the reaction of Chandler Goule, the Vice President of Programs for the National Farmers Union, to the recent negotiations that led to several Ag groups signing a Memorandum of Understanding on how to go about raising the national Beef Checkoff from one to two dollars per head sold. Groups like the Farmers Union and R-CALF USA didn’t sign the document because of objections that NCBA says aren’t accurate.
NCBA controlling the checkoff
“The only body that really makes the decision on how to spend checkoff dollars is the Beef Promotion Operating Committee,” said Scott George, past president of the National Cattlemen’s Beef Association. “It reflects the wishes of the states through those 10 representatives from the Federation of State Beef Councils, and 10 from the Beef Board.”
“It takes a two-thirds majority to approve decisions,” said George. “I noticed Chandler Goule (of the National Farmers Union) said this Federation is controlled by NCBA and they only need one more vote to control the spending decisions. That’s absolutely incorrect. Nobody ever tells the Federation how they should vote.”
“I’ve served on the Operating Committee four different times and I’ve voted against other Federation members, I voted against my Chair when I was Vice Chair, I voted against my Vice Chair when I was chair, so there isn’t any block voting,” said George.
“Two-thirds of the Committee, which equals 14 votes (not 11) is what it takes to approve spending decisions,” said George. “If the Operating Committee is voting, and it’s not unanimous, there’s a roll call vote and they record it in the minutes of every meeting.”
NCBA doesn’t control the checkoff
George said the Beef Checkoff Enhancement Working Group is taking steps to get more beef industry organizations involved in the checkoff through a proposed joint nominating committee which interviews candidates for the Operating Committee.
“Right now, the Beef Board has seven members that sit on a nominating committee, the Federation of State Beef Councils will have seven seats, and we’re proposing that seven seats are given to industry representatives,” said George. “So these organizations that sign on here send a person to sit on that committee, and it will be a joint nominating committee.”
George added, “You’ll have a 21-member nominating committee, and they’ll interview all the candidates that apply from the Beef Board and from the Federation, for the Operating Committee seats, and they’re going to have to pass by a two-thirds majority to move that candidate forward.”
This idea didn’t come without controversy either.
“We have certain groups that didn’t like this because the policy groups had been excluded from seats on the advisory committees,” said George. “But others have said having industry groups sitting in the room, looking at the quality of candidates, helping make the decision, will give them ownership, involvement, and it educates the groups about the candidates and what we’re trying to accomplish with the checkoff.”
He added, “Everything will take a two-thirds majority to move forward, so no one will control that.”
Most checkoff dollars go to NCBA
“First of all, it takes a two-thirds majority vote of the Operating Committee to award contracts,” said George. “It’s important to remember that.”
George said the best way to answer that accusation is to go back to their last meeting.
“Someone said ‘NCBA is getting a lion’s share of the money’,” said George. “A representative from one of the other groups in the room said ‘you have to understand that NCBA is presenting most of the Authorization Requests.’ It wasn’t me that said that, it was someone else.”
“It’s important to understand that the Beef Board has a list of eligible organizations that can sign contracts,” said George. “The last list I saw was well over 50. It was probably approaching 75 organizations eligible to contract with the checkoff. Off all of those, I think maybe five apply regularly.”
So why raise a fuss about the money NCBA receives from the checkoff if you don’t apply yourself?
“Good question,” said George. “There can be a lot of reasons people don’t apply.”
“When you apply and get a contract, you have to look at what the industry identifies as a problem,” said George, “and you try and come up with a solution for one particular part of it. You have to estimate your costs. You then present that to the Operating Committee. If they award you a contract, you have to spend your money first. You do the project, and then submit bills for reimbursement.”
“Some organizations just aren’t willing to put their money up front,” said George. “It takes a long time for a contractor to do the work and submit their bills to the Cattlemen’s Beef Board (CBB). The CBB has oversight of the whole process. They will only reimburse you up to the amount you contracted for.”
“Sometimes costs go higher than a contractor estimates,” said George, “and it’s about cost recovery, and not making a profit. If I say I’m going to do a project for $100,000, and it costs me that much to hire people and buy materials to do that, I don’t get to come and say I need ten percent more to go into the coffers of the contracting organization.”
“One organizations asked why we would do this when we don’t make any money at it,” said George. “You’re right, you don’t make any money at it. It’s cost recovery only. The projects are set up to address consumers questions about beef so they’ll keep buying the product, which supports cattle producers.”
“The other thing that prevents organizations from contracting,” said George, “is if you’re a contracting organization, you have to have an independent third party audit your books, and then submit that audit to the Beef Board. The Beef Board also has authority to come in and look at your books and audit you. The Ag Marketing Service (AMS), which oversees the Beef Board, also has the authority to look at your books.”
“The Secretary of Agriculture ordered two Office of Inspector General audits on everybody’s books last year,” said George. “They looked at AMS, which oversees the program, they looked at the Beef Board’s books, they looked at contractor’s books, and both audits came out and said everybody is acting in accordance with the law.”