About 30 years ago, in the middle of a farm-economy collapse, farmers decided “promotion taxes” were worth a try. These taxes on specific commodities were supposed to help promote agricultural products and turn the market around.
One after another, farmers who grew corn, soybeans, wheat, cattle, and hogs petitioned government to set up a fee on these products. The fee was supposed to support promotional activities for each commodity. For all intents and purposes, the arrangement was a tax. But the assessments were called checkoffs.
Farmers who voted in favor of checkoffs — and they were quite popular in spite of the fact they represented tax increases — felt they would always retain control of checkoffs because it was farmers who had approved them in the first place. And most checkoffs came with a clause that allowed farmers who did not wish to be taxed to get a full refund. At first refunds were fairly easy to obtain. But as time went on, and as the farmer boards that were elected to manage the checkoff programs became friendlier with corporations, refunds became more restricted or were repealed altogether.
Corporate influence on the checkoff programs only increased as the number of farms declined.
Some of the checkoff programs have been more popular than others. Farmers perceive the grain and cotton checkoffs favorably because they have promoted sales and paid for research on crop improvement and products. Things like bio plastics and soy ink got their start with checkoff dollars.
But livestock checkoffs have been more controversial as corporate ownership of livestock and markets has increased.
The programs got so unpopular late in the Clinton administration that Ag Secretary Dan Glickman approved a recall vote for farmers to repeal the pork checkoff, if they wanted. Those farmers thought the large meatpackers who had come to control both production and packing were abusing the system, misrepresenting pork producers, and generally using the checkoff to help consolidate pork production even further. Pork producers registered at USDA county offices across the country and received ballots to vote on whether to retain the checkoff. Producers voted overwhelmingly in favor of repeal and the pork checkoff was dead.
But not for long.
After the George W. Bush administration took over in 2000, President Bush appointed Anne Venneman as secretary of Agriculture. One of Venneman’s first official acts was to invalidate the checkoff repeal vote, thereby restoring the checkoff. Venneman justified her action by saying the checkoff tax represented government speech that could only be repealed by an act of Congress. Since then, vertical integration in the pork industry has reached new heights as packers control pork production from birth to slaughter and packaging.
Lately, the beef checkoff has become no less controversial as National Cattlemen’s Beef Association, the primary contractor for beef checkoff expenditures, called for full repeal of Country of Origin Labeling (COOL) for U.S. beef.
Seen as the only sure way to sell high quality U.S. beef for a premium, many farmers and ranchers were incensed when COOL was repealed by World Trade Organization courts, even though Canada has a similar labeling law.
After repeal of COOL, some retailers admitted that it was virtually impossible to sell foreign meat labeled as such in America. Our consumers wanted the same country-of-origin label consideration afforded to Canadians.
Adding to the beef checkoff controversy now is a move in Missouri to establish a new, $1 state beef checkoff. This would be in addition to the $1 national beef checkoff. The additional fee would generate about $2 million per year – forever — from Missouri’s 50,000 beef producers.
There are questions in Missouri about motivations behind a state checkoff that would endow the state Department of Agriculture with tens of thousands of dollars simply for administrating collections before dispersing them to a state checkoff board for allocation. Due to the hasty way the agriculture department decided to put the proposed checkoff to a vote – they held just one statewide hearing on the proposal before putting it on a ballot – some farmers are crying foul.
Adding more fuel to the fire is the lack of evidence that the state checkoff board actually needs more money. They are currently holding about $700,000 of unused funds from the national checkoff, shared 50/50 with the states.
That’s why Missouri beef producers Rhonda Perry and Wes Shoemyer are suing the Missouri Department of Agriculture for their decision to put the new beef tax to a vote. Perry, founder of the Missouri Rural Crisis Center, and Shoemyer, a former Missouri state senator, have counterbalanced corporate agriculture in Missouri before with their opposition to Missouri’s constitutional right-to-farm amendment, which barely passed in the 2014 general election.
Perry says the entire process that effectively doubles the beef checkoff tax in Missouri violates the rights of cattle producers and is “just wrong.” At the heart of the complaint is the failure of state ag department to seek the opinions of beef producers. Farmers want more public hearings held at different locations around the state to give producers a fair chance to express their point of view. That’s what USDA did about six years ago when mandatory animal identification rules were proposed. As unpopular as that issue was, at least the USDA honored their obligation by taking the discourse to several different listening posts around the country before any action was taken.
That’s what it will take to really hear what Missouri’s beef producers have to say. Keep in mind that in the second largest beef producing state in America, the average herd is only about 30 head. In many cases the cattle provide supplemental income to full time jobs in town. It could take months for those beef producers just to hear about the proposal, let alone register and vote. In the end, like family farm pork producers in the years leading up to 2000, small beef producers could find themselves supporting a system dedicated to their oppression.
Most ironic of all is the fact that proponents of the new tax say farmers who don’t like it can relax — they can get a refund if they want. But the ballot initiative doesn’t do much to reassure farmers that they will actually see a refund. The ballot initiative tells us exactly how farmers will pay the tax (it’s taken directly from beef producers’ checks at auction barns), but there’s nothing specified about how farmers can get the optional refund. In the words of Rhonda Perry, that’s just wrong.
Richard Oswald, president the Missouri Farmers Union, is a fifth-generation farmer from Langdon, Missouri. “Letter From Langdon” is a regular feature of The Daily Yonder.