By DOUG SCHMITZ
Iowa Correspondent

WASHINGTON, D.C. — Representatives of the National Cattlemen’s Beef Assoc. (NCBA) met with USDA officials in Washington last week to address ‘grave concerns’ raised to USDA Secretary Tom Vilsack by six other major farm groups regarding the NCBA’s policy and lobbying activities within the U.S. cattle industry.

“Our industry faces challenges and well-funded adversaries,” said Scott George, NCBA Federation division chair, at a May 25 teleconference with farm reporters about the outcome of the meeting. “No checkoff dollars are being spent where they shouldn’t be.

“(The NCBA) is much more than a policy-making organization,” he said. “Over the years, I’ve seen our (checkoff) programs do amazing things.”

Steve Foglesong, NCBA president and Astoria, Ill. cattle producer, said the effort the NCBA has undertaken to change its governance structure for FY 2011 has “received an awful lot of attention, more than I thought we would, going into this. I’m going to take that as a compliment – people really do care about the NCBA and what we do.”

At issue is how the NCBA will set industry policy and spend beef checkoff dollars as outlined in its proposed governance structure the Centennial, Colo.-based association presented at the Texas and Southwest Cattle Raisers Assoc. (TSCRA) convention, held March 17-20 in Fort Worth.

A coalition of six other national farm groups, led by the American Farm Bureau Federation (AFBF), the National Farmers Union (NFU) and the Livestock Marketing Assoc. (LMA), addressed what they called “grave concerns” in a March 22 letter to Vilsack. The other three groups that signed the letter were: the National Livestock Producers Assoc., the National Milk Producers Federation and the U.S. Cattlemen’s Assoc.

In their four-page letter to Vilsack, the coalition said while the law prohibits the use of funds for any type of activity to influence government policies or actions, the ‘firewall’ keeping checkoff funds for beef advertising and industry advocacy should be maintained to separate those monies from NCBA dues and other revenue to avoid compromise.

“This firewall is already mistrusted by many producers because checkoff programs are often managed by NCBA staff in the same offices as staff who manage a major beef policy’s trade association,” the letter stated. “In fact, of the 45 state beef councils, 18 share some level of staff with the NCBA affiliate.”
While the coalition said they supported the checkoff, they alleged that the new governance structure would “further erode the separation” between the checkoff side (the Federation of State Beef Councils) and the policy side (NCBA) of the organization.

“We also believe the new governance structure will move the checkoff towards more exclusivity rather than inclusivity,” the letter added.

But according to George, a Cody, Wyo. dairy and beef producer, through the NCBA’s proposed restructuring plan, just the opposite is true.

“We’re trying to become much more inclusive,” he said. “We’re opening doors for much more input,” adding that the NCBA is also getting more “clarity, but also alignment on what it will take to make this thing work.”

Hoped for private discussion
Fogelsong said he was disappointed that the coalition sent the letter to Vilsack without privately discussing it with the NCBA – especially since the vote was taken on the organization’s new governance plan, which the NCBA board of directors approved and later adopted 201 to 13 at its annual meeting on Jan. 30 in San Antonio.

Fogelsong added that it should have remained an internal matter and shouldn’t have concerned the groups complaining about the policy and checkoff side of the NCBA. While the USDA currently oversees all checkoff programs, all monies collected under these checkoffs are private.

At the annual meeting, Foglesong said the plan shouldn’t have come as a surprise to the coalition since the NCBA discussed with attendees the three working groups within the plan: bylaws, policies and procedures; investment schedules; and transition timeline.
“At the San Antonio meeting, the Governance Task Force received a lot of producer feedback, and they revised their governance recommendation based on this feedback,” he said. “As a result, the board overwhelmingly voted to move forward with the governance concept. Today, we continue this producer-driven process with these working groups.”

Each working group includes a diverse group of producers and executives from state organizations, Foglesong added, with members appointed by NCBA officers, based on recommendations the officer team received from state beef councils and state cattlemen associations. 

“The goal of an improved governance structure is clear: A stronger NCBA,” he said. “Producers deserve a national organization that is built to fight and win the battles that threaten agriculture and rural America.”

As the nation’s largest association of cattle producers, the NCBA works to create new markets and increase demand for beef, with efforts made possible through membership contributions, officials said. Foglesong told Vilsack in his letter that the coalition’s conclusions about the impact of the NCBA’s governance structure would have on the Beef Checkoff are inaccurate – especially since no checkoff dollars will be used to lobby, and a third-party audit system would remain in place to make sure the law is followed.
“We are the checkoff’s biggest supporter,” he said. “We work hard every day to build and defend beef demand, and are committed to a strong and effective beef checkoff program.”

Definition of firewall

The real problem, George said, is a breakdown in understanding the true definition of a ‘firewall.’

“We believe the firewall is an accounting firewall, and that has been strictly enforced and will continue to be strictly enforced,” he said. 
However, in a May 17 letter to Foglesong, Vilsack expressed the NCBA’s need for additional clarity regarding the proposed governance structure.

“Over the years,” Vilsack said, “there has been a trend within other research and promotion programs to make a stronger firewall between policy and checkoff-funded activities. This separation is critical.”

Vilsack alleged that the NCBA’s plan would “weaken the firewall between policy and checkoff-funded activities, thereby jeopardizing the beef checkoff program and set a bad precedent for checkoff programs in general.”

In his letter to Foglesong, Vilsack laid out seven specific “firewall requirements” he said must be achieved since it impacts the NCBA’s relationship with the Federation of State Beef Councils (see shaded box).