Scandal-ridden Slush Funds, USDA Commodity Checkoffs Under Fire

It's been a tough few years for family farmers in the livestock business, but most folks don't really understand the root of the problem, and it’s not necessarily inflation, supply chain problems, or the current state of our crippled economy. Industrial agriculture, or “Big Ag” as we like to call it, is sucking up the hard-earned dollars of family farmers and using those funds to lobby against the interests of the very people it purports to represent.

To be precise, I am writing about Big Ag's big secret — a series of U.S. Dept. of Agriculture (USDA) Commodity Checkoff Programs for beef, pork, dairy, and other commodities. Under these programs, struggling farmers are forced to hand over part of their proceeds and watch them placed into the pockets of trade organizations that pay their top executives six figure salaries. It’s the worst kind of taxation – one where the payer gets nothing in return. Major trade associations like the National Cattlemen's Beef Association (NCBA) and the National Dairy Promotion and Research Board divert checkoff dollars that by law are restricted to commodity marketing programs and research, and instead use a large portion of the money for hefty salaries, prime office locations, and high-priced lobbyists.

And that includes lobbyists who push for policies that often hurt both family farmers and animals – opposing Country of Origin Labeling (COOL), fighting efforts to stop the extreme confinement of animals on factory farms, promoting the use of antibiotics that threaten public health, and blocking the growth of the organic sector.

To make it worse, U.S. Secretary of Agriculture Tom Vilsack – a former Democrat Governor of Iowa – served for eight years under President Obama and left his tenure at the end of that Administration to work for a dairy checkoff affiliate for nearly $1 million per year. And as it often goes here in the swamp, Vilsack returned four years later to the same post under Joe Biden. The revolving door and potential conflicts of interest with Vilsack have raised eyebrows around the globe.

Report after report has consistently revealed the unethical and illegal re-routing of checkoff resources year after year under both Republican and Democrat Administrations. And those scandals brought to light by Politico and The Daily Caller occurred when Vilsack was Secretary the first time.

But there is hope: On February 28, Sens. Mike Lee, R-Utah, Cory Booker, D-N.J., Rand Paul, R-Ky., Elizabeth Warren, D-Mass., and Kirsten Gillibrand, D-N.Y., along with Reps. Nancy Mace, R-S.C., and Dina Titus, D-Nev., introduced the Opportunities for Fairness in Farming (OFF) Act, H.R. 1249/S. 557, to bring transparency and accountability to USDA’s broken checkoff programs.

The bill doesn't seek to abolish the checkoff programs, as Big Ag beneficiaries are misrepresenting, but would instead simply require transparency and accountability and would prohibit checkoff funds from being used for lobbying. The OFF Act also would prohibit funds from being used to pay for staff and programs of trade associations that favor multinational corporations and push independent farmers out of business. And it would prevent disparagement of one product over another, because allowing the federal government to pick winners and losers in the marketplace is unacceptable.

Right now, funds from checkoff programs benefit industry groups that promote frightening levels of market consolidation and anticompetitive practices in production agriculture, and that does nothing to help the family farmers forced to pay into the program. For example, NCBA and other Big Ag groups pushed for the dissolution of programs designed to prevent price-fixing at the packing houses. Producers are thus forced to accept prices imposed by the global meat cartels, such as JBS from Brazil and Smithfield from China, that make it impossible to compete with cheaper, suspect products from overseas. American producers and consumers alike should be outraged that the NCBA, a U.S.-based beef industry group, is doing the bidding of giant multinational corporations instead of hard-working American farmers and ranchers. NCBA also does the bidding of those same foreign corporations in opposing rules to let consumers know where their meat was raised and processed. As a result of their nefarious efforts, the beef labeled as "Made in the USA" may have been produced in South America or Africa and merely packaged in the USA.

The effort for checkoff reform is supported by more than 80 farm organizations, including the Organization for Competitive Markets, the National Farmers Union, and R-CALF, representing over 250,000 family farmers and ranchers, alongside groups like the Heritage Foundation, R Street, and even the National Taxpayers Union.

Supporters of the bill are calling on Congress to take a second look at the broken and corrupt commodity checkoff programs — and hold Congressional hearings on the OFF Act to open the checkoff books to the public. They’re also calling for leaders on the House and Senate Agriculture Committee to include the OFF Act in the upcoming must-pass Farm Bill, set to be taken up later this year. And with Rep. Mace now holding an Oversight Subcommittee gavel, those hearings may finally be possible.

Let us be reminded of what President Abraham Lincoln said in 1864, two and a half years after he established the Department of Agriculture, in what was his final address to the Congress: "The Agricultural Department, under the supervision of its present energetic and faithful head, is rapidly commending itself to the great and vital interest it was created to advance. It is precisely the people's Department, in which they feel more directly concerned that in any other. I commend it to the continued attention and fostering care of Congress."

That's clearly not the USDA we see today, and that's clearly not the USDA that Big Ag wants in Washington. As Rep. Mace said: "Anyone who opposes this legislation makes you wonder what they might actually have to hide."

Marty Irby is the executive director at Animal Wellness Action in Washington, D.C., and a director and board secretary at the Organization for Competitive Markets based in Lincoln, NE. He was named one of The Hill’s Top Lobbyists for 2019, 2020, and 2021. Follow him on Twitter, Facebook, and Instagram @MartyIrby.