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January/ February 2014 Big Beef

Independent ranchers and animal rights activists don’t agree about much, except that it’s time to stop using federal tax dollars to support the meat lobby.

By Siddhartha Mahanta

Imagine if the federal government mandated that a portion of all federal gas taxes go directly to the oil industry’s trade association, the American Petroleum Institute. Imagine further that API used this public money to finance ad campaigns encouraging people to drive more and turn up their thermostats, all while lobbying to discredit oil industry critics—from environmentalists to those calling for better safety regulations or alternative energy sources.

That’s a deal not even Exxon could pull off, yet the nation’s largest meat-packers now enjoy something quite like it. Today, when you buy a Big Mac or a T-bone, a portion of the cost is a tax on beef, the proceeds from which the government hands over to a private trade group called the National Cattlemen’s Beef Association. The NCBA in turn uses this public money to buy ads encouraging you to eat more beef, while also lobbying to derail animal rights and other agricultural reform activists, defeat meat labeling requirements, and defend the ongoing consolidation of the industry.

Like most things that go awry in Washington, this one started out with arguably good intentions. The story begins in the 1980s, a time when the plight of family farmers and ranchers inspired the likes of Willie Nelson and Neil Young to put on benefit concerts and launch the Farm Aid movement. Another, more enduring response to the farm crisis of the 1980s was Congress’s decision to create what’s known today as the beef “check-off” program.

The idea was to help struggling ranchers by creating a program to pool their money and use it to promote demand for beef. Under a bill passed in 1985, cattle producers were required to pay $1 per head to one of forty-five “qualified state beef councils.” These councils in turn contributed to a national program supervised by the U.S. Department of Agriculture (USDA) dedicated to promoting the beef industry.

Older readers may recall the first major result of this legislation, which was a $42 million, seventeen-month advertising campaign launched in 1993 featuring Hollywood screen legend Robert Mitchum, who proclaimed in his gravelly voice, “Beef. It’s What for Dinner.” Over the years, similar federal programs have come to exist for other food groups, from avocados to popcorn, and have produced such memorable marketing slogans as “Milk: It Does a Body Good,” and “Pork. The Other White Meat.”

All along some have questioned whether it made sense for government to sponsor such programs. There’s the libertarian objection to government imposing taxes generally and otherwise trying to change market outcomes. Meanwhile, medical authorities have been warning for decades that Americans eat too much meat for their own good (to say nothing of popcorn). Mainstream economists point to the inefficiency of using tax dollars to promote competing food groups: when people eat more beef they eat less pork and vice versa, for example.

But at least in its early days, the checkoff program for beef arguably served the interest of small-scale ranchers and in ways that were not directly at odds with the public interest. The $1-per-head tax on beef ensured that no rancher shirked the costs of promoting the industry, while control over how the money was spent was widely shared. Today, however, the program couldn’t be more different than originally envisioned.

Nearly 99 percent of all the beef tax dollars collected by the government, some $45 million a year, winds up in the hands of just one group, the NCBA, which relies overwhelmingly on this public money to support itself. Fewer and fewer actual “cattlemen” belong to the organization, while more and more complain that the NCBA presses for policies that undermine their own way of life and the public’s interest by favoring large packers and other corporate giants.

The ongoing fight over so-called country-of-origin labeling for meat provides a case in point. Cargill, Tyson Foods, JBS, and National Beef Packing, which together control 85 percent of the meat-packing business, strongly oppose having to tell you where the different parts of your hot dog or frozen hamburger patty come from. As a practical matter, they say, it could well be that some parts come from imports that have been broken down and blended with fat from U.S.-fed cattle, making it difficult and expensive to determine which parts come from where.

On the other side of the question are independent American ranchers and most of the American public. In May, a poll by the Consumer Federation of America showed that 87 percent of adult Americans favor mandatory country-of-origin labeling for beef, while some 90 percent want food sellers to spell out whether the beef was processed domestically. America’s small-scale ranchers, especially those competing to sell beef raised in humane and environmentally sustainable conditions, naturally want such consumers to be able to tell where their beef comes from.

Nonetheless, the NCBA has joined with other trade groups representing meat-packers, including foreign groups, in suing to block the USDA’s full implementation of country-of-origin labeling. Such a regulation, they argue, would amount to “unduly compelled speech” in violation of the First Amendment of the Constitution. So far, a federal judge has rejected their argument, and the NCBA and its allies are appealing.

Yet independent ranchers complain that they are the ones being compelled to pay for speech they do not believe in. In 2004, they even got a ruling from the U.S. Court of Appeals for the Eighth Circuit, which declared that the taxes the cattlemen have to pay the NCBA are a form of compelled speech that violates their constitutional rights. But the Supreme Court reversed the lower court’s decision in 2005, with Justice Antonin Scalia holding that checkoff-financed speech is “government speech.”

This leaves ranchers like Fred Stokes of Mississippi fuming. The rancher’s own money, he says, is “being used to put him out of business, with government complicity.” Meanwhile, the consumer may ask, “Why is my government turning over tax dollars to a trade group that’s in court trying to keep me from knowing what I’m eating?”

The NCBA argues that it keeps the money it collects from the beef tax strictly separate from the money it spends on lobbying. But this has not always been true. In 2010, the NCBA returned $216,944 to the government after a spot audit revealed that it had misappropriated checkoff funds. More recently, an investigation by the USDA’s inspector general initially did not turn up any ongoing examples of illegal use of funds for lobbying purposes. But following charges that the USDA investigation did not meet the inspector general’s own “Information Quality Guidelines,” the investigation report has been withdrawn and is currently, according to the USDA, “undergoing a review.”

Siddhartha Mahanta writes about systemic fragility and our food system at the New America Foundation. His work has also appeared in Mother Jones, the New Republic, and other publications.

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