South Dakota: Checkoff reform bill dies in close House vote

A resolution to encourage the South Dakota delegation to support Beef Checkoff reforms died by a slim margin in the House of Representatives last week.

District 18 Representative Julie Auch, a farmer, rancher and small business owner representing Yankton and Clay Counties introduced House Concurrent Resolution 6016, urging the two South Dakota Senators and one Congressional Representative to support the Opportunities for Fairness in Farming Act (the OFF Act) which includes several reforms for the federal Beef Checkoff including a prohibition on lobbying organizations obtaining the funds.

In a 10-3 vote, the House Ag Committee approved the resolution, with Drew Peterson, Wittman and Van Diepen voting “no,” and Goodwin, Ladner, Overweg, Hunt, May, Rice, Shubeck, Ismay, Nolz and Gosch voting “yes.”

The resolution supported amending the Beef Checkoff rules to require a periodic audit, periodic vote, and to prioritize promotion of US beef rather than generic beef.

Support for 6016

Brett Kenzy, Gregory, South Dakota, R-CALF USA’s Checkoff Committee Chair spoke in favor of the bill.

“In my estimation, there are two problems,” he said. “Congress directed the money to lobbying organizations and then prohibited them from using it to lobby. In my analogy, that’s like giving a fat kid a candy bar and telling him to hold onto it. Being a fat kid myself, I can promise you, you’re only going to come back to wrappers. It’s just too much temptation that was put into the bill right from the beginning.”

He pointed out that the majority of contractor organizations lobby heavily against reforms popular with many of the cattlemen who pay the Checkoff such as MCOOL, increased market competition and transparency, Packers and Stockyards enforcement and so on,” he said.

“That leads us to the second fatal flaw of today’s Checkoff structure,” he said. “In the late ’90s, the National Cattlemen’s Association merged with the Beef Industry Council of the National Livestock and Meat Board which brough the packers into the fold of that cattle organization creating National Cattlemen’s Beef Association. And NCBA’s Federation holds half of the seats on the Beef Promotion Operating Committee which has final authority over awarding Checkoff funds. This was approved by the USDA of that time – we have a very different USDA than then – and effectively legalized NCBA’s undue power over the checkoff,” he said.

The two “fatal flaws” were: Putting lobbying organizations in charge of funds prohibiting lobbying and then that merger that happened in the late ’90s that brought the cattlemen and packers together….which is really hard because there is an inherent conflict…cattlemen want to sell cattle high, packers want to buy cattle cheap,” he said.

“If I were to summarize the majority of complaints that come to me, the first would be generic promotion,” he said. Kenzy pointed out that the Beef Checkoff website is full of “pro-American rhetoric,” perhaps it’s time to promote American beef in America he said, and then explained that the Checkoff does promote American beef overseas.

Other concerns include: NCBA and Cattlemen’s Beef Board meetings are held together and the CBB (Beef Checkoff funds) pays approximately $1,200 to NCBA for each CBB member to attend the NCBA trade show, in addition to financing meeting registration fees and travel expenses.

TSLN contacted CBB to confirm this fact but, but CBB has not yet returned TSLN’s e-mail.

Kenzy testified that ranchers also express concern over CBB-funded projects such as the methane-related student educational material that taught students to prepare a proposal for ranchers that would instruct ranchers how to lower their cattle’s methane emissions.

The CBB’s sponsoring of full page ads in Drovers’ Journal and Beef Magazine is another concern Kenzy shared.

He wrapped up his testimony discussing the “Beef Industry Long Range Plan” which is linked to on the CBB website and is also used to lobby Congress. One goal in the Long Range Plan is “strong policy advocacy,” which he said he believes is akin to “lobbying.”

“Policy and supply chain viability,” talks about “reducing unnecessary regulations,” “targeting the behaviors of regulators and stakeholders,” and “educating policy makers,” Kenzy said these goals sounds like lobbying.

Another pillar talks about “promoting traceability,” which he pointed out is a very controversial topic in the cattle industry.

“Don’t hate the player, hate the game,” he said. “We have to look at the game, what it’s evolved into, not be afraid to change the game and to modernize these programs,” he said.

“Send a message to Washington that it’s time for Checkoff accountability,” he said.

Opposition to 6016

South Dakota Cattlemen’s Association lobbyist and Executive Director Taya Runyan spoke against 6016, saying her members have policy that supports the Beef Checkoff and the SDCA has opposed the OFF Act over the years.

“I want to be really clear about this on the record. Neither NCBA or SDCA are using checkoff dollars to lobby or influence lawmakers. Ever. It’s not permitted by federal law,” she said.

“My support of the Checkoff is because of our producer members who have found value in the program and have asked us to support the Checkoff,” she said.

“I myself have gone to Denver and met with the staff in their office and walked through what those robust firewalls look like to make sure that the funds that are obtained by the Checkoff in order to do administrative things that assist the Checkoff are not used for lobbying or influencing,” she said.

The OFF Act would require redundant auditing practices that would essentially drain producers’ checkoff dollars away from research, education and promotion work they are doing in order to turn that investment,” she said. She reported that the Checkoff returns over $13 for every $1 invested according to a Checkoff-funded study.

The current CBB representatives are all accessible to answer questions about how Checkoff dollars are spent, she said.

“There is clearly not consensus that the Checkoff should be reformed in the ways set forth by this resolution. We ask that the legislature not pass concurrent resolution 6016,” she said.

Ultimately the committee did vote in favor of the bill, but the full House of Representatives failed to pass the resolution in a tight 32-34 vote.

The House vote follows:
Yeas: Andera, Auch, Aylward, Bahmuller, Baxter, Garcia, Goodwin, Gosch, Hughes, Hunt, Ismay, Jensen (Phil), Jorgenson, Kayser, Ladner, Lems, Manhart, May, Mulder, Nolz, Novstrup, Odenbach, Overweg, Pourier, Randolph, Rice, Schaefbauer, Schwans, Shubeck, Sjaarda, Soye, and Speaker Hansen.

Nays: Arlint, Czmowski, DeGroot, Derby, Duffy, Emery, Fitzgerald, Fosness, Greenfield, Halverson, Healy, Heermann, Jamison, Kassin, Kolbeck (Jack), Kull, Massie, Moore, Mortenson, Muckey, Peterson (Drew), Rehfeldt, Reimer, Reisch, Roby, Roe, Shorma, Stevens, Uhre‑Balk, Van Diepen, Walburg, Weems, Weisgram, and Wittman.

5001 – No eminent domain for private gain

A bill to protect South Dakota landowners from eminent domain is advancing through the legislature. HJR 5001E passed the House and has also passed through the Senate State Affairs Committee with an amendment the bill sponsors said was friendly.

If approved in the Senate, HR 5001 won’t go to the governor’s desk. Instead, it will go on to the general ballot.

HR 5001E (which includes the friendly amendment) would protect South Dakota landowners from eminent domain being used to take land for the purpose of economic development.

The resolution came in part as a response to the Kelo v New London decision.

Kelo v New London: In a 5-4 decision, the Supreme Court ruled in favor of New London, Connecticut. The opinion of the court was provided by Justice John Paul Stevens, which provided the legal precedent for the government’s “right” to seize land for private use as long as the land would provide some sort of public benefit. This ruling greatly expanded the traditional definition of the power of eminent domain, making it especially controversial. HR 5001E also comes in response to much controversy and conversation in recent years over Summit Carbon Solution’s (a carbon pipeline company) rights or lack thereof to conduct testing and obtain easements in South Dakota for their proposed pipeline.

Representative Karla Lems, Canton, a bill sponsor, said the language of the current bill is very similar to the North Dakota eminent domain language in the North Dakota constitution. She believes that the protections in the North Dakota Constitution prevented Summit Carbon Solutions from taking or threatening to take land via eminent domain from North Dakotans.

“We want 5001E to pass in its current form,” said Lems. “We want to resist any other amendments that might be proposed,” she said.
Lems explained that one version of 5001 included the word “solely” which would have make it more difficult to protect landowners from eminent domain, but in the 5001E version, that word has been removed.