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Lawsuit claims beef checkoff paying for lobbying

Roxana Hegeman

A Kansas rancher has filed a lawsuit claiming the National Cattlemen's Beef Association is illegally using "beef checkoff" funds to influence government action and policy on behalf of industrialized agriculture rather than cattle producers.

Michael Callicrate, a feed yard operator in St. Francis and vice president of the Organization for Competitive Markets, is seeking a court order prohibiting any beef promotion program dollars to the NCBA. The lawsuit was filed against the U.S. Department of Agriculture and other entities in U.S. District Court in Kansas.

At issue is the $1 per head of cattle assessment on cattle producers, known in the industry as the Beef Checkoff, that is designed to champion beef in the marketplace through research and promotion programs. The program established by the Beef Research and Information Act of 1985 expressly prohibits the money _ about $80 million raised annually _ to be used for lobbying.

"NCBA has essentially taken all of our own money _ that we have been forced to pay in to the checkoff by law _ and used it to lobby Congress for an agricultural system, an industrialized cattle system that is contrary to the independent cattle producer's interest," Callicrate said Friday in a phone interview from the OCM conference in Kansas City, Mo.

The lawsuit, which was filed Thursday, was announced during the conference.

Callicrate contends that the NCBA, which is primarily a lobbying organization, has used the beef-checkoff money to take stands on country-of-origin labeling, mandatory price reporting and meatpacker ownership and control of livestock on behalf of the interests of industrialized agriculture rather than cattle producers and family farms.

"The NCBA consistently is on the other side of the issue battling us, and here we are struggling to stay alive, and they are over there with our checkoff dollars paying their bills and paying big salaries to their staff," Callicrate said.

NCBA has received more than $200 million in checkoff funds since 2006, the lawsuit contends.

The lawsuit does not name NCBA as a defendant, but instead sued over the government's lax oversight of the checkoff dollars. Besides the Agriculture Department, the other named defendants are Agriculture Secretary Tom Vilsack, the Cattlemen's Beef Promotion and Research Board, the Beef Promotion Operating Committee and the Agricultural Marketing Service.

The Agriculture Department declined comment on the lawsuit, but agency spokesman Michael Jarvis said the checkoff programs have been very effective at helping farmers, as well as the food and clothing processors, have significant play in the market.

NCBA also said that as a contractor to the beef checkoff program, it is very proud of the results it has achieved.

NCBA chief executive Forrest Roberts said in a phone interview that his organization represents beef producers of all sizes and that it is representative of the U.S. beef industry. The group each year gets between $35 million and $40 million in checkoff funds, he said.

Roberts said the organization is confident that "our financial practices and procedures that we have in place here to safeguard these very hard-earned dollars that beef producers from all across the country pay into their beef checkoff program are being used in the most efficient and effective way."

However, the lawsuit cites a 2010 routine compliance review of the NCBA conducted by the Cattlemen's Beef Board to look at compliance with the government contract and to test NCBA's "firewall," by which NCBA claims to separate its allowed beef checkoff expenses from non-checkoff expenses such as lobbying.

The independent audit found a number of deficiencies, including numerous violations of the prohibition against using checkoff funds to influence government actions and policies, the lawsuit said.

The suit also contends that the audit found that NCBA failed to provide adequate documentation for some overhead expenses and found numerous instances of improper time coding or documentation on employee time reports. NCBA also charged the checkoff for travel expenses for political events.

A separate audit conducted this year by USDA's Office of Inspector General also found that its Agricultural Marketing Service did not always require various boards to comply with agency guidelines and failed to recognize its oversight role extended to subcontractors.

"We are not against the checkoff," Callicrate said. "We are against the misuse of those checkoff dollars."

The Associated Press