State Checkoff Oversight Shift


By Chris Bennett, Drovers CattleNetwork 

February 12, 2017


What are the consequences when a state check-off organization cedes authority to USDA? The text of a new agreement established at the tail end of 2016 erases boundaries and could carry implications for the entire U.S. commodity checkoff system.


On Dec. 22, 2016, a Memorandum of Understanding (MOU) became effective between the Montana Beef Council (MBC) and the USDA-Agricultural Marketing Service (AMS), allowing AMS oversight of MBC’s use of checkoff funds from the standard $1 per head assessment.


“Since this is tied to pending litigation, we cannot comment at this time,” AMS officials say.


Could the MOU serve as a blueprint for other state-federal relations in the checkoff system? “This MOU is a historic shift and change in perception from the current federal-state relationship between a state beef council and AMS,” says Harrison Pittman, director of the National Agricultural Law Center in Fayetteville, Ark. “Historically, state programs have maintained a level of autonomy in terms of the half of the assessment that stayed in the state.”


Why would MBC hand over authority to AMS?


MBC is locked in a Montana federal district court battle with the Ranchers-Cattlemen Action Legal Fund (R-CALF).


Pared down, R-CALF claims the $1 per head assessment is used to subsidize MBC, which they say is a private entity because it lacks sufficient federal oversight and therefore is a violation of free speech and the First Amendment. On Dec. 12, Magistrate Judge John Johnston recommended the district court deny USDA’s motion to dismiss and grant R-CALF’s preliminary injunction. Johnston said R-CALF has standing to pursue its claims in court, although the recommendation is subject to more review.


“We view the MOU as an eleventh hour attempt to persuade the court not to grant a preliminary injunction. The MBC appears to be surrendering its authority to the federal government; rendering their own board members irrelevant and handing the government absolute control over all operations,” says Bill Bullard, CEO of R-CALF.


Echoing AMS, MBC officials declined to comment on the MOU, referencing ongoing litigation...