Check-Off Programs Amount to Slush Fund for Big Ag

By on October 28, 2015 with 1 Comment

During the throes of the political fight in California over Prop 2, we got wind that the American Egg Board – a Congressionally authorized body that manages millions of dollars that accrue from a tax on every egg sold, and that is charged with promoting and marketing egg consumption to the public – was attempting to divert $3 million from its coffers on advertising to influence the election. Under federal law, that’s forbidden. And with a $10 million campaign already in the opposition pipeline from trade associations for the egg, veal, and pork industries, state and local farm bureaus, and other agribusiness interests, the AEB ad campaign was a coordinated political effort to give them a major extra push. Our team got wind of it, and our lawyers convinced a judge to block the spending. It was, without question, an improper use of the egg check-off funds.

Last week, Joanne Ivy, the chairwoman of AEB, resigned after a Freedom of Information Act request yielded a raft of documents that the AEB had hired public relations firm Edelman to tar Hampton Creek, a Silicon Valley food start-up company that has developed a plant-based substitute for eggs. It’s the fastest growing start-up ever in the food industry, and its products, including Just Mayo, cookie dough, muffins, pancakes, and dressings, are now in 40,000 stores. The company, in four short years, has a valuation approaching a billion dollars.

Emails discovered through the FOIA request found that the AEB conspired to thwart Hampton Creek’s sales efforts in Whole Foods grocery stores. Among the documents were some pretty damning email exchanges within AEB’s leadership. Ivy sent messages to Edelman calling the startup “a crisis and a major threat.”

Just as the egg check-off money is not to be used for politics, it’s also not to be used to tear down competitors in the marketplace. These industries talk a good game about the free market and consumer choice, but then put their thumb on the scale with government interference in the marketplace.

That’s precisely why conservative U.S. Senator Mike Lee of Utah wrote to Agriculture Secretary Tom Vilsack last week and called on him to investigate these improper activities, since the U.S. Department of Agriculture oversees the program. He wrote: “If these Great Depression era institutions have outlived their purpose, and if evidence suggests they behave like state-sponsored cartels that intimidate and handicap their competition, should Congress continue to authorize them?”

Why is the government involved in promoting industries that have plenty of muscle and means already? And why is every farmer, and every consumer who buys these products, forced to participate in this program? Lots of cattle and pork farmers want out of their check-off programs because they don’t like the tax and, even more, they don’t like how the money is used to support big agriculture and industrial factory farming practices that harm family farmers.

In August, I wrote about a major development in a case brought by The HSUS and farmers to stop the misuse of federal dollars to finance lobbying activities by the pork industry. A panel of judges from the D.C. federal Court of Appeals issued a ruling that threatens to choke off a $60 million revenue stream that should have never been channeled to fund the political activities of the pork industry’s chief lobbying organization, the National Pork Producers Council.

The National Pork Board – which administers that industry’s check-off spending, as the AEB does for its industry — handed over this “Pork: The Other White Meat” slogan to the NPCC at no charge and with no licensing agreement. Then, after the publicity campaign had nearly run its course, in a case of self-dealing that boggles the mind, the NPPC sold the slogan back to the Pork Board for a staggering $60 million! In short, over the next 20 years, the Pork Board would give the NPPC $3 million a year – as much as a third of all the money that the NPPC gets to fund its daily operations. And the payments continue even after the Pork Board retired the spent slogan and swapped in a new one.

These check-off programs have become slush funds for big agriculture to conduct its political and lobbying operations, run its administrative and fundraising operations, pay salaries, and go after its marketplace competitors. They have outlived their usefulness, and the spending of these federal funds has been deeply corrupted.

It’s time for Congress to end these animal agriculture check-off programs, or at least make them voluntary for farmers and consumers. Farmers already voluntarily give money to their trade associations like the National Pork Producers Council, the National Cattlemen’s Beef Association, and other trade groups. The era of these Soviet-style check-off programs that play favorites in the marketplace and divert money to maintain the political status quo must come to a merciful close.

Categories
Farm Animals, Humane Economy

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1 Comment

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  1. Annoula Wylderich says:

    Disappointing to see such a conspiracy against companies that actually benefit consumer health.

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