Farm Bill,  General

What’s OFF with Checkoff Programs?

The history of checkoffs is full of controversy, greed, and legal challenges. The initial idea was for farmers to pool their resources to boost product sales and increase farm profitability. But, over time, checkoff programs have become a way for corporations to consolidate wealth and power into ever-fewer hands.

Why Do OEFFA Members Care About Checkoff Programs?

We are now in a situation where very few people control a great deal of what we eat, where it is grown, how it is grown, and who profits. This has very real implications for public health, for the ability of beginning farmers to access land, for everyday farmers to just make a living, and much more.

As a significant contributor to consolidation in the food and agricultural system, checkoff programs operate virtually without oversight. Farmers, who fund this program, are not privy to how the $850 million collected in annual checkoff fees are spent.

What is a Checkoff?

Checkoffs are mandatory Department of Agriculture fees assessed on a per-unit basis that fund boards designed to promote the commodity as a whole. Farmers and ranchers pay the mandatory fee when they sell any of a diverse range of 22 commodities. Most people are familiar with slogans such as “Got Milk?” and “Beef, It’s What’s for Dinner,” but aside from dairy, beef, corn, pork, and soybeans, there are quite a few more.

While checkoff programs take money from every producer of these 22 commodities, not all of them benefit. Worse, oftentimes their best interests are harmed.

As Farm Action so eloquently put it, “The history of checkoffs is dripping with controversy, greed, and legal challenges.” Deviating far from their intended purpose, checkoff programs are now largely under the control of powerful corporate lobbyists. As a result, more wealth and power are being concentrated in a smaller group of hands—and most certainly not trickling down to the honey, mushroom, or blueberry producers who are funding the system.

Image licensed under the Creative Commons Attribution-Share Alike 3.0. Author: BenFranske

So… What’s the Beef?

  • Lack of transparency: The dairy checkoff has the largest pool of money (has been implicated in collusion with lobbyists) and is required to submit annual financial reports to Congress. Despite that requirement, those reports have not been made for the past three years.
  • Working against some producers: All of these commodity programs are for “conventional products,” meaning that they are not certified organic. For years, organic farmers and ranchers paid into a program that encouraged the public to buy conventional commodities. This has undermined organic producers’ ability to receive a higher price for goods raised without most synthetic chemicals and requiring more labor.
  • Playing fast and loose: There have been instances of commodity contractors spending checkoff dollars for lobbying and vacations—clearly not a statutory use of commodity checkoff funds. The Guardian reported that the American Egg Board conducted an extensive campaign to sink a non-egg-based mayonnaise company.

Checkoff programs are prohibited from influencing governmental actions or disparaging other commodities. If cases of bad behavior like those mentioned above were in isolation, we may deem some aspects of checkoffs as “bad.” Unfortunately, there are many more, indicating systemic problems with checkoff programs.

How Does This Relate to OEFFA’s Farm Bill Priorities?

These programs reward the consolidation of power into fewer and fewer hands and encourage commodity production at scales that cause environmental harm. They can also put smaller producers out of business. It can be really complicated to track the flow of how checkoff funds contribute to concentration, but it’s no secret that big food companies like to work with big farms—which means higher costs and fewer markets for smaller farms.

Take a minute to listen to Wisconsin dairy farmer Sarah Lloyd speak about the impacts of this concentration

Ultimately, we are all impacted by the negative effect of consolidation and the lack of real competition in food and agricultural markets. Currently, commodity checkoff programs make things worse, leading to higher prices at the grocery store.

So, What Can We Do?

U.S. Senators Cory Booker (D-N.J.) and Mike Lee (R-UT) led a bipartisan effort to reform agricultural checkoff programs. Elizabeth Warren (D-MA), Rand Paul (R-KY), and Kirsten Gillibrand (D-NY) have joined.

The Opportunities for Fairness in Farming (OFF) Act will make checkoff programs more responsive to the farmers who are required to contribute to them. Countless farmers, ranchers, and other producers have seen their checkoff dollars squandered or used against their interests. This bill would prohibit certain wasteful, anti-competitive, and deceptive behavior from checkoff boards.

Act Now

In March, OEFFA joined 130 other organizations in urging the Senate Committee on Agriculture, Nutrition & Forestry and House Committee on Agriculture to enact meaningful reforms to checkoff programs by supporting the OFF Act. Join us in addressing conflicts of interest, lack of transparency, and misuse of funding to better support small and organic producers.

OEFFA staff are available to help you call your members of Congress, write a letter to the editor or opinion piece for your local newspaper, or take other action. If you want a better shake for farmers, contact OEFFA Policy Director, Amalie Lipstreu, at today.