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Checkoff ruling opens door for producer control

By John Stencel

The ruling, June 21, by South Dakota Federal District Court Judge Charles B. Kornmann that the beef checkoff program is “unconstitutional and unenforceable” because it violates the First Amendment should serve as an opportunity for beef producers to control promotions of their product.

The initial idea of the checkoff—to pool producer monies in order to conduct nationwide beef promotions—seemed worthy and was supported by many individuals and organizations when the idea was proposed over a decade ago. The Livestock Marketing Association, the organization that brought the suit against the checkoff, was among the biggest proponents when the checkoff program was first established.

So, what went wrong?

Those employed to use checkoff dollars for promoting beef products to industry, cooks, and the consumer lost sight of the goal of the program. While they basked in the fame of now well-known ad campaigns like “Beef, It’s What’s for Dinner,” cattle producers struggled to survive financially. When cattle producers paying the $1-per-head checkoff bemoaned low prices and negative returns, defenders of the checkoff justified the program by claiming the promotions increased the volume of beef sold. But, there was rarely any discussion on improving the producers’ bottom line.

Many producers who once supported the checkoff became embittered that it promoted beef in general and not U.S. beef. Advertising was not allowed to promote U.S. beef, and even if it had, without country-of-origin labeling, consumers looking for U.S. product would have been frustrated.

Another nail in the beef checkoff coffin was the perceived exclusivity of those who regulated the checkoff (the Beef Board) and those who spent it (National Cattlemen’s Beef Association and its affiliates). Producers outside these groups felt a bit like the renegades who staged the Boston Tea Party—their battle cry being “Taxation without Representation.”

Rocky Mountain Farmers Union has been one of the “outsiders” objecting to the mandatory taxation without representation. RMFU policy does not categorically reject checkoff programs. However, producer promotional programs should be optional, not mandatory, and such programs should be controlled by those who pay for them. In addition, promotional programs should contribute to improving the producer’s bottom line.

If this criteria is met, it is likely a nationwide effort can be made to promote U.S. beef by those producers who wish to participate.