USA TODAY International Edition
Farmers want public disclosure of funds
Activists worry about abuse in federal programs that collected $ 900 million
Activists fear misuse of $ 900 million that was taken in by federal programs
When it comes to strange political bedfellows, few groups could top the team pushing for a U. S. Senate bill aimed at reforming the controversial agriculture checkoff program.
It isn’t often the Humane Society of the United States aligns itself with dairy farmers, ranchers, environmental groups and the Heritage Foundation, a conservative think tank.
The team’s goal: Persuade Congress to pass legislation requiring public disclosure of financial records showing how about $ 900 million paid by farmers into nearly two dozen mandatory checkoff programs is spent.
The sponsors of the bill are from opposite sides of the political spectrum. Lead sponsor Sen. Mike Lee, R- Utah, is joined by fellow conservative Sen.
Conn Carroll, spokesman for bill sponsor Sen. Mike Lee, R- Utah “Farmers ought to have the right to know exactly how the checkoff dollars they are forced to pay are being spent.”
Rand Paul, R- Ky., and two liberal Democratic senators running for president – Elizabeth Warren of Massachusetts and Cory Booker of New Jersey.
“We know the only way that we succeed is by building broad- based coalitions of unlikely bedfellows,” said Joe Maxwell, a hog farmer and executive director of the Organization for Competitive Markets, a Nebraska- based group representing farmers, ranchers and others.
“It’s an opportunity for Democrats and Republicans, conservatives, progressives, consumer groups, animal groups, farm groups to find work together.”
Nevertheless, the proposal has died in Congress twice and has been opposed by some of the biggest players in agriculture, including major food processors, the National Cattlemen’s Beef Association, the National Pork Producers Council and the American Farm Bureau.
Opponents, which include some 40 groups, argued the proposal “will gut” the programs and “impose unnecessary, duplicative and counterproductive burdens” on them, according to a letter signed last year by the organizations.
The checkoff program requires farmers producing about two dozen commodities – from beef and eggs to avocados and Christmas trees – to pay a portion of their sales to organizations charged with marketing their products.
Dairy producers are, by far, the biggest contributors to the programs. Last year, dairy farmers paid about $ 420 million, or 47%, of all the checkoff money collected.
About $ 155 million of that went to Dairy Management Inc., based in Rosemont, Illinois.
In past years, much of the dairy money was used to produce marketing campaigns, such as the long- running “Got Milk?” effort. In recent years, Dairy Management has focused more on working with major retailers, such as Pizza Hut and McDonald’s, in the hope of getting them to use more dairy products.
Some operators of smaller farms complain they do not see the same benefits from the new emphasis as larger operations and giant co- ops.
“Big- time players can make a play that their checkoff dollars go to ( projects that) directly benefit them,” said Sarah Lloyd, a former Dairy Management board member who has about 400 cows on her Columbia County dairy farm. “I can’t do that. I’m a small ant.”
There is additional frustration about the salaries paid to Dairy Management officials at a time when, faced with sagging milk prices and economic problems, scores of small farms are closing.
Thomas Gallagher, who has been Dairy Management’s CEO since the nonprofit was created in 1995, has been paid an average of $ 976,744 annually since 2010, the Milwaukee Journal Sentinel found.
The 10 top executives at Dairy Management were paid an average of $ 800,000 each in 2017 and two collected at least $ 1.19 million, according to IRS documents. That year, 1,600 dairy farms closed nationwide, including 503 in Wisconsin.
Thomas Vilsack joined Dairy Management days after he left his post as U. S. secretary of agriculture and was paid $ 800,557.
Push for disclosure
The checkoff boards are created by Congress and overseen by the USDA.
Unlike governmental bodies, however, financial records are not routinely made available for public inspection by the checkoff boards. The legislation would mandate public disclosure of budgets and spending by the boards.
“Sen. Lee believes farmers ought to have the right to know exactly how the checkoff dollars they are forced to pay are being spent,” spokesman Conn Carroll said in an email. “Millions of dollars have been spent on questionable research partnerships with fast- food giants and extravagant salaries for CEOs.”
A second bill sponsored by Lee would make the checkoff program voluntary.
“There is no justification for forcing ranchers who don’t want to participate to do so against their will,” Lee said in a statement sent by Carroll.
“We need to reform the checkoff programs to root out corruption,” Warren wrote in March on the Medium website. “I support legislation that will make the checkoff program voluntary.”
The Organization for Competitive Markets has been in a public records court fight since 2014 with the USDA in its efforts to obtain financial and audit records regarding the beef checkoff program. The government has released some records, but the organization contends it is withholding thousands of other public records.
Last year, the Organization for Competitive Markets posted its “Top 10 Most Egregious Checkoff Program Abuses.”
Among the abuses claimed: The misuse of millions of checkoff dollars, including an attempt by the the American Egg Board to kill sales of a vegan mayonnaise product; a $ 2.6 million embezzlement by a then- employee of an Oklahoma checkoff program; alleged illegal lobbying and the USDA’s failure to file on a timely basis required financial reports.
“We have a common goal and that is to curb the abuse of the USDA checkoff,” said Marty Irby, executive director of Animal Wellness Action, a group lobbying for the bill.
To Gallagher, the head of Dairy Management, the involvement of animalrights groups is more sinister.
“What do all of these strange bedfellows have to do with winning the antianimal ( farming) activist issues,” Gallagher asked in a Sept. 17 speech to Dairy Management board members. “What does that have to do with their agenda, which is get rid of farmers all together?”
Gallagher claimed the groups want to kill the checkoff program entirely – an allegation denied by the Humane Society and other supporters of the legislation.
Gallagher did not specifically mention checkoff legislation. His staff would not allow a Journal Sentinel reporter to interview him after the speech at the Rosemont Hilton.
Colin Woodall, CEO of the National Cattlemen’s Beef Association, echoed Gallagher’s remarks. His group receives about $ 27 million in checkoff funds a year. “They don’t like animal agriculture,” Woodall said in an interview. “Whatever they can do to make it harder on us, that’s what they’ll do.”