Slush Fund Finances Big Ag Lobbying Schemes

Thousands of farmers hate the rampant abuses of the government-mandated pork checkoff program, but cannot choose to opt out. Photo by Kathy Milani/The HSUS

When you shop for new clothes, you choose which stores and brands provide the value you prefer. When you allocate philanthropic donations, you choose which charities and what kind of work you want to support. The same is true in buying a car. You decide which company provides the safety, the performance, and the quality you want, and which brand represents values that reflect your own.

As every school kid knows, that’s called the free market. And the free market is what makes America go round.

Except for the meat industry. The free market doesn’t make that sector of America go round.

Once a customer reaches the meat counter, the market isn’t free – it’s rigged.

Major meat industry trade groups – most notably the National Pork Producers Council and the National Cattlemen’s Beef Association – are getting a pork barrel of money from a mandatory fee imposed on farmers and passed off onto consumers.

It’s called a “check-off program,” and no rancher, or farmer, or consumer, has the choice to opt out. No indeed. Everyone who touches meat subject to a checkoff program is paying, at wholesale or later at retail, to support these trade associations that do much more than promote their commodity. They take the money to fund their core operations, including aggressive lobbying against sensible animal welfare policies for farm animals, country-of-origin labeling of meat products, clean water standards, and the overuse of antibiotics on factory farms, among other things.

It’s a fact that thousands of farmers hate the rampant abuses of this government-mandated tithing program. Principled lawmakers in Congress don’t like it because the program wasn’t set up as a lobbying slush fund for private industry. And of course, members of the public don’t sign up for any of this when they buy animal products, but they become unwitting funders of the industry’s pork-barreling diversion of funds.

In the end, the “check-off program” is a hidden federal levy on animal agriculture supporting one way of doing business and stifling other ways; it’s a fee that is being used to prevent competition and force industry conformity, to the detriment of many producers and freedom of choice in the marketplace.

One startling abuse we’ve uncovered comes to the nation compliments of the pork industry.

Although lobbying with producer funds is strictly prohibited under federal law, records show that industry-selected appointees of the National Pork Board (a Congressionally authorized and U.S. Department of Agriculture-controlled entity) were aggressively searching for a way to use check-off funds to finance the operations of the National Pork Producers Council (NPPC), a private trade association. Under the influence of a joint task force, the Board agreed to an outrageously overpriced licensing agreement, about which the head of the Board wrote in an email: “that should get NPPC the money it needs for the next four years.”  In fact, this pork cabal found a funding scheme that would last for two decades, until The HSUS and family farmers stepped in.

Here’s how it worked: the Pork Board used the family farmers’ money to develop the “Pork: The Other White Meat” campaign, and then gave the trademark and brand to the NPPC free of charge. Then, after NPPC had exhausted the market value of the campaign, the Pork Board bought back (with check-off dollars) its own unlawful “gift” from the NPPC – for $60 million dollars! These federal funds are now being paid out every year in $3 million installments.

But NPPC should never have been permitted to register the trademark in its own name to begin with – the whole deal was premised on an unlawful transaction. The annual payments to NPPC – predicated on the sale of a spent and dormant slogan that it didn’t pay for or develop in the first place — comprise approximately 30 percent of NPPC’s yearly revenues, providing a steady flow of checkoff dollars into NPPC’s lobbying operations for years to come. This goes on despite the results of a referendum decided by America’s pig farmers who voted in 2000 to eliminate the check-off entirely. In another betrayal of producers, the USDA ignored the results of the fair election.

It’s a remarkable slight to everyone involved, except the NPPC, to take their money through a mandatory tithing program and funnel it to a trade association to do as it pleases with the loot.

This is not the free market. It’s a scam, an insult to Congress, and a massive rip-off of farmers and consumers.

The federal check-off system was designed to promote agricultural products. Industrial agribusiness operators now treat it as a cash cow to run their day-to-day operations and their lobbying campaigns.

This was never how it was supposed to be. The NPPC $60 million scam may be one of the worst instances, but there are other outrageous examples of the diversion of funds for the beef and egg check-off programs, too.

Our case against the pork check-off expenditures has shed light on the program. But it’s also time for the USDA to start taking names and checking off some boxes of its own.  The number one item on its list should be to stop allowing these trade associations from absconding with the money to execute a plan that leaves animals in misery and family farmers in the lurch.