WASHINGTON, Sept. 21, 2016 - A proposed
rule that sounds like a simple formalization of an informal policy has ag law
experts scratching their well-educated heads.
In July, USDA’s Agricultural Marketing Service
(AMS) published a proposed rule dealing with shifting checkoff funds from the
state to the national level. In short, the proposed rule would allow for
producers to “redirect” their checkoff assessments from state checkoff groups
to their national counterparts.
But only in certain states, and only with
the soybean and beef
checkoffs.
The proposed rule went a little under the
radar – it received only 14 comments during a comment period that closed last
week.
One observer claims the rulemaking is an
effort to avoid further litigation. Bill Bullard, the CEO of the
Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF
USA), told Agri-Pulse that the proposed rule is a “direct response” to a
lawsuit filed earlier this year by his organization.
“It’s an attempt by the government to
resolve what they know to be a constitutional violation, but they fall well
short,” Bullard said. In response to the lawsuit, Bullard said USDA asked for
additional time to respond, saying they were working on a proposed rule “that
they said would address all or some of our concerns.”
The lawsuit involved a First Amendment
challenge over the administration of the beef checkoff in Montana. There, the
Montana Beef Council partnered with Wendy’s to promote hamburgers with “North
American beef,” much to the frustration of R-CALF USA, a strong proponent of
country-of-origin labeling which can be used to promote “U.S. beef.”
Frustrated Montana beef producers might
want to take part in just the kind of redirection USDA is proposing. But those
that have followed the process closely are a little confused by USDA’s
approach, saying it leaves several questions unanswered.
The proposed rule would allow for producers
to request their soybean and/or beef checkoff money – $1 for each animal sold,
in the case of beef – be redirected so as to only be allocated to the national
checkoff body. But the state where the producer lives must have laws on the
books allowing for such a redirection.
That policy was originally included in the
language that created the beef and soybean checkoffs, according to Wayne
Watkinson, a major player in authoring the checkoff language. Watkinson, who is
a lawyer with the McLeod, Watkinson, and Miller law firm in Washington, told Agri-Pulse
the provision was removed administratively about a decade ago, and few outside
of USDA seemed to know it happened.
“USDA decided that it wanted to delete all
the provisions they felt were obsolete because a referendum had been held,” he
said, adding that he was surprised when he found out the language had been
removed.
Harrison Pittman, the director of the
National Agricultural Law Center in Arkansas, was looking through the proposed
rule and several things caught his eye. For starters, he said AMS listed
several states that would allow the redirection,
particularly in Arkansas, despite evidence to the contrary.
“I just thought ‘Wow, that’s going to be
news to everyone around here,’” he said in an interview with Agri-Pulse.
He went down the list and came across a number of other states that were listed
but might not allow for the redirection. He says he thinks that, based on
recent action taken by state legislatures, AMS may be using an outdated list,
but still expressed confusion as to why potentially inaccurate information was
accompanying the proposed rule.
As currently written, the proposed rule
would require producers seeking to redirect their checkoff funds to do so at
each time of sale. In their comments on the rule, the U.S. Cattlemen’s
Association pointed out the impracticality of that suggestion, saying that beef
producers may sell cattle several times each year.
There’s also the question of why AMS would
go through the process. Pittman says people in the industry have told him
redirection is already happening on an informal basis. So why not just continue
to allow it without formalizing government language?
By AMS’ own estimates, only 20 beef
producers and 10 soybean producers are expected to redirect their assessment,
so the government might be going through formal rulemaking for the sake of 30
producers. Bullard balked at that figure, saying R-CALF USA has thousands of
members, many of whom would consider redirecting.
A spokesman for AMS told
Agri-Pulse that the agency plans to issue a final rule “following review of the
comments,” but didn’t offer a specific timetable on how long that review would
take.
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