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The Hidden Cost (or Tax) of Food Dialogues®
Used under creative commons license from Donna Cleveland

In the current media environment, there’s a lot of seemingly contradictory information about the “right” way to grow and eat food. Setting out to address these tensions in a public forum, the Food Dialogues® came to Minneapolis this summer. The event–entitled “Farm to Consumer: Bridging the Gap Between Consumer Concerns and Food Production and Sourcing Decisions”–was presented as an open panel discussion on the way the nation grows and eats food, now and into the future.

At first glance, the dialogue between actors such as Minneapolis Public Schools, a national leader in providing healthy, regionally sourced foods, and General Mills, a major financial backer for groups that fight improved school nutrition standards, appeared promising. Equally promising was the presence of the farm voice, specifically Riverbend farm, a small, community supported organic farm, side-by-side with Cargill, the nation’s largest privately held corporation. However, looking behind the curtain of this and other Food Dialogues® events around the country reveals the less objective agenda of those setting the stage–an agenda that had little interest in a real dialogue about the future of farming and food systems.

Supported and advised by a long list of “industry partners” including Monsanto, DuPont Pioneer, John Deere and other perennial favorites, the Food Dialogues® are more a promotional product than a real dialogue. Investing in public events like the Food Dialogues® is common practice for some of the largest corporations driving our current farming and food system. The industrial agriculture and food sector spends hundreds of millions of dollars each year to influence what ends up on our forks. In its new report Spinning Food, Friends of the Earth highlights the fact that industry trade associations and front groups for industrial agriculture and food spent over $740 million privately to influence public policy, media and consumer behavior toward their products between 2009 and 2013. That’s nearly $150 million spent annually by agribusiness to ensure that the status quo dinner table remains set.

The Food Dialogues® are hosted in cities around the country by commodity producer associations and funded with public and private dollars to further the interests of industrial agriculture, thus indirectly favoring corporate consolidation over producers and local control. For the Food Dialogues®, the driving force is the U.S. Farmers & Ranchers Alliance (USFRA), who sponsored the Minnesota event in conjunction with the Minnesota Soybean Research & Promotion Council (a branch of the Minnesota Soybean Growers Association) and the Nebraska Soybean Board. These three organizations collectively raised approximately $38 million in revenue in 2012 (the most recent tax information that is consistently available). While the latter two are less public about the composition of their funding, the USFRA website claims that nearly a third of its funding comes from “industry partners,” corporations with a clear interest when it comes to the “right” way to grow and process food. As for the rest of the bill, that’s where those who work the land pick up the tab. Remarkably, farmers and ranchers are legally compelled to fund these promotional associations and events, regardless of whether they agree with their message or whether the message helps or hurts their farms.  While a lack of financial transparency obscures the breakdown of income for many commodity groups, USFRA notes that the remaining two-thirds of its funding comes from what they call “farmer-and-rancher-led affiliates.” This compelled support is better known as checkoff program money.

Taxing farmers and ranchers to promote agribusiness

For those unfamiliar with the concept, the “checkoff program,” is supposed to act as a “promotion and research program.” Checkoff programs are established by federal law and are crafted to promote the consumption of particular agricultural products (pork, eggs, corn, soy, etc.) that typically enter the market in less processed forms and, therefore, make it difficult for producers to distinguish their products via advertising. For example, instead of two farms marketing their eggs separately, it is more cost-effective to work together to encourage consumers to buy eggs over another protein source. In short, a rising egg tide lifts all producer boats. Hence the 1974 Egg Research and Consumer Information Act was passed to establish a framework for the egg checkoff.

Under the Commodity Promotion, Research and Information Act of 1996,the overarching and coordinating federal law for “commodity promotion laws,” check-off programs function as a mandatory tax,  typically around one percent, that farmers of a particular commodity must pay per unit of that particular commodity sold at market or to processors. These taxes are collected by the USDA and are redistributed by the agency to approved checkoff organizations for the purpose of promoting the commodity crop in a generic sense (i.e. not promoting a particular brand or company). According to the National Agricultural Law Center, “checkoff programs attempt to improve the market position of the covered commodity by expanding markets, increasing demand, and developing new uses and markets.” For example, according to the Pork Checkoff website, “U.S. pork producers and importers pay $0.40 per $100 of value when pigs are sold and when pigs or pork products are brought into the United States.” While this seems like a small amount to pay, the money adds up quickly for checkoff programs-the National Pork Board alone cleared $81 million in revenue in 2011.

According to Alan Guebert, agriculture journalist and author, there are currently 22 federal check off programs that include both familiar and unfamiliar commodities from beef to mangos and raise approximately $750 million per year from U.S. farmers and ranchers. The results are some of the more iconic advertising campaigns of the 20th century: “Beef. It’s What’s For Dinner,” brought to you by the National Livestock and Meat Board; “The Incredible Edible Egg,” by the American Egg Board; “Pork: the Other White Meat;” “Got Milk?;” and other advertising campaigns of the  same variety. While the organizations that fund these advertisements will claim market development success, there is little independent economic analysis evidence to validate these claims, and more important, the money is not being spent to promote small-scale organic or sustainably produced products, or food raised or grown for local markets.

Legally, checkoff programs have long been contentious in their purpose and practice. Federal law requires that checkoff programs hold a vote for participants to determine the continuation, suspension or termination of the program and requires that programs authorize and fund an independent evaluation every five years. Along with late fees and interest payments, penalties for violating program requirements can cost a producer upwards of $10,000. Given the mandatory nature of the programs, it’s not surprising that not all producers agree that the touted benefits of checkoff programs are worthwhile. In 2000, a majority of pork producers voted to end the pork checkoff–but the USDA, on behalf of the National Pork Producers Council, overturned the vote.  

Over the past two decades, several key legal battles have highlighted two of the major participant complaints: that checkoff programs are inequitable because producers required to pay for them don’t receive equal benefit, and, perhaps more concerning, that the programs violate the First Amendment rights of their participants. While efforts have been made to ensure the equal delivery of benefit through various exemptions and credit programs, particularly for small, organic and specialty producers that claim their size and/or products don’t benefit from generic advertisement, the programs remain contentious. It should be noted that with the exponential growth of the market for organics and subsequent rise of large-scale corporate organic producers, there is currently a controversial effort underway to establish a checkoff program for the organic sector.

Regarding the constitutionality, USDA programs have regularly been considered by various courts to determine if checkoffs violate free speech. Complaints center around the fact that qualifying producers are legally compelled to contribute to shared advertising which they may not agree with and are thus forced into associated with businesses they otherwise avoid, including those who import competitive foreign products into domestic markets. However, a 2005 Supreme Court decision ruled that checkoff participants have no legal claim to First Amendment violations.

Beyond the functionality of the checkoff programs as they exist legally, the various organizations they support have long been subject to scrutiny regarding the ethics and accountability of their practices. The authorizing legislation for checkoff programs limits the activities of funded entities to advertising, promotion, consumer education and research—explicitly forbidding lobbying efforts. However, two current examples provide a window into how industry is increasingly involved in the political process.

The U.S. Court of Appeals for the District of Columbia is revisiting a lawsuit against the USDA by the Humane Society of the United States (HSUS) and Iowa Citizens for Community Improvement (ICCI) regarding the relationship between the National Pork Board (NPB), a checkoff approved organization, and the National Pork Producers Council (NPPC), a lobbying group. The case is specifically looking at the legality of the USDA’s approval for the NPB to license “Pork, The Other White Meat” to the NPPC for $3 million per year for 20 years.

In another current example, evidence has emerged this month that potentially links the American Egg Board (AEB), an authorized checkoff organization, to a coordinated multi-year attack on Hampton Creek, the San Francisco-based, plant-based protein food company that made waves with its open letters about changing the food system that were recently published in the New York Times. Perhaps more concerning than the apparent malice of the AEB, is the fact that USDA staff are clearly implicated in the electronic paper trail. These current transgressions are not the only examples of the use of checkoff funds being questionable–explorations of the practices of checkoff programs typically reveal that oversight is limited at the best and non-existent at the worst.

It’s clear that checkoff organizations aren’t neutral ground for an unbiased conversation.

The private and public funding behind groups like the USFRA and events like the Food Dialogues® and other related events should be clearly identified to their participants and the general public–and given a more accurate description: paid advertising. The discussion that the Food Dialogues® takes on is a needed one, but, given the power and questionable behavior of checkoff organizations, that discussion needs to be more balanced, transparent and inclusive.  An equitable and effective dialogue about farming and food should bridge the gap between producers and consumers and lead to solutions that benefit both, not simply agribusiness.  

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