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NAFTA notes and a warning

Free Market Reflections with Steve Dittmer

Closeup of the flags of the North American Free Trade Agreement NAFTA members on textile texture. NAFTA is the world's largest trade bloc and the member countries are Canada, United States and Mexico. 3D rendering with detailed textured grunge effect on closeup.

[UPDATED: Jan. 23, 2018 with ‘COMMENT’ at bottom] January 2018. The global economy is improving. The U.S. economy, drawing on Trump optimism, anticipated tax reform and more competitive American businesses seeing some profits, which should benefit Canadian businesses. U.S. beef demand is holding up decently in the face of increased supply.

The 800-pound gorilla in the room is the NAFTA renegotiation. The process has stalled so badly that the top dogs just sent in the troops to battle it out in the fifth round because they didn’t want to be associated with a stalemate. The U.S. complains that Mexico and Canada did not provide counterproposals to its proposals. In response, Mexico and Canada say they are not going to counter proposals that are non-starters.

The latest rumours are dismal. Any country that intends to pull out of NAFTA is required to give six months notice. Some speculate that President Trump will give notice and start the clock ticking to put more pressure on Mexico and Canada to capitulate. Meanwhile, most of the U.S. economy, including agriculture, is pleading with President Trump to not wreck something that needs little fixing. Some help could come from the confirmation of a free market agricultural negotiator.

On another front, some of you may be aware of the big beef check-off fight going on in the U.S. You’d think we’d have enough challenges without starting trouble within the beef industry.  But that would require rational players on all sides and rationality doesn’t extend to all corners of our industry. I will give you some highlights to warn you: Don’t allow this to happen in Canada.

I’m not sure how Canadians select their beef promotion board members but here, members of state beef councils are appointed by state cattlemen’s and cattlewomen’s groups or elected in statewide elections. For a time, some state groups were careless with their responsibilities. They didn’t carefully vet appointees or bother to recruit qualified candidates with association experience or a solid interest in promotion, research and consumer education to run for council elections. As a result, people with little experience or ties to cattle associations or industry promotion but with definite political agendas began permeating some state beef councils. The same thing happened at the national level, with the Cattlemen’s Beef Board (CBB). As a result board members with ties to radical political interests who were opposed to beef exports nearly completed a coup of the CBB.

Once the coup was thwarted, two groups, R-CALF and the Organization for Competitive Markets (OCM) changed tactics.

If you’re unfamiliar with OCM, don’t be fooled by the name. Its idea of achieving competitive markets is to use government power and anti-trust law to break up anything big — packers, feeders, retailers, fast food chains — and return the production chain to the mom-and-pop era of the 1940s.

One thing these two groups do agree on is their wish to destroy the National Cattlemen’s Beef Association (NCBA) because it is a free market organization. It believes the industry should focus on satisfying consumer demand, that all sectors of the industry should be free to co-operate where possible to accomplish that goal and that free markets allow for the import and export of beef as dictated by consumer demand.

All that is heresy to R-CALF and OCM. When they failed to change the NCBA platform from within, they decided to fix things by destroying it from the outside by attempting to eliminate the check-off.

Since the merger of the National Cattlemen’s Association (cattle producers) and the Beef Industry Council (beef check-off promotion), the new NCBA has had two divisions: a policy division funded by dues and a promotion division that contracts with the check-off board, the CBB, to carry out the bulk of the check-off-funded promotion activities. There is an accounting firewall between the two divisions, because, by U.S. law, check-off money cannot be used to lobby or influence government policy.

Despite having cattlemen and cattlewomen on the NCBA board, independent audits and supervisory government audits, OCM and R-CALF contend the NCBA policy division illegally uses check-off funds for lobbying efforts. OCM has sued the government, using Freedom of Information Act powers, seeking documents to prove its claims. R-CALF has brought a suit against the government and the Montana Beef Council, claiming check-off funds should not be collected by “private” organizations like beef councils.

Both groups are particularly incensed that the beef check-off promotes beef rather than American beef or U.S. beef, fearing that Canadian-fed beef or Mexican feeder cattle might be gaining some benefit from the U.S. check-off. In the past, R-CALF has even been willing to raise questions about the safety of America’s beef supply in order to highlight what they claimed were safety problems with Canadian beef, especially during the BSE crisis.

Now, both groups are partnering with avowed enemies of animal production to get legal and financial backing for their attacks against NCBA and the beef check-off. The Humane Society of the U.S. (HSUS) has pretty much taken over OCM, and R-CALF is working with Public Justice, an activist legal group opposing mainstream agriculture and legally representing both R-CALF and People for the Ethical Treatment of Animals (PETA).

Beware. Industry feuds are ugly and damaging to both sides.

[COMMENT below provided Jan. 19, 2018]
Multinational agribusiness activist should take a look a closer look at the “free market” he defends

‘I’m David Muraskin, a lawyer with Public Justice, the public interest organization Steve Dittmer derides in his piece attacking the campaign to restore integrity to the Beef Checkoff.  Mr. Dittmer objects because our work does not advance the agenda of the National Cattlemen’s Beef Association and the multinational beef packers that organization represents.  As a result, he vilifies Public Justice for representing the full range of groups whose rights are also trampled on by industrial agricultural companies.

Yet, the freedoms Mr. Dittmer article nominally defends can’t be limited to the people he chooses.

I and Public Justice represent any organization whose rights are attacked by corporate consolidation and control in the animal agricultural industry—whether they be independent American ranchers or animal welfare groups—because we know you can only ensure an open and honest system if you defend everyone’s right to participate.  Freedom for a select few is no freedom at all.  This is the cornerstone of the First Amendment of the United States Constitution, and we will not shy from defending those rights just because people misrepresent our work to score cheap points.

If Mr. Dittmer and the NCBA have their way, the United States government will continue to coerce ranchers into paying a checkoff that allows half their money to go to private state beef councils, whose members are selected by beef packers, who meet in secret, and, thus, who can be controlled by NCBA and its beef packer partners.  This is what happened in Montana, enabling the Montana Beef Council to use Montana producers’ money to fund an advertising campaign for the fast-food chain Wendy’s, which does not necessarily purchase its beef from the United States, let alone Montana.  The First Amendment, however, does not apply only 50% of the time.  It does not allow every other dollar you’re taxed to be turned over a private organization to advertise against your interests, without your consent.

This also doesn’t sound like Mr. Dittmer’s purported free market.  Should multinational companies get to use the Government’s power to tax to shift their advertising costs onto American producers?  That’s what’s at stake in our “radical” lawsuit.

Here’s the system we went to court to bring about:  If the government wants to allow half the Beef Checkoff money to go to private state beef councils, it needs to get the payer’s consent.  If producers like what their state beef council is doing, they should keep giving it their checkoff money.  If they don’t, they should have the power to ensure their money goes to a government controlled body that is responsible to its constituents.  We’re not forcing money out of the checkoff program.  We’re making sure that cattlemen and -women only fund the message of private state beef councils if they agree with it.

Public Justice is proud to stand with the farmers, fishers, ranchers, and workers that produce our food, the consumers who feed it to their families, and the communities within which food is made.  We’re proud to work with R-CALF because they connect us with the on-the-ground concerns of their independent-rancher members.

We believe that, particularly in the animal agriculture industry, mega-corporations possess undue influence, enabling them to exploit workers, producers, consumers, and others.  The key to reining in this system is to enforce existing rules, especially where they promote transparency and competition.  During the 2016 campaign, President Trump repeatedly set forth a vision that fit with ours.  We hope he’ll keep his promises, and that his USDA will change course on the operation of the checkoff.  Until then, we will stand alongside R-CALF in fighting to make the system responsible to those who pay into it.  We will also continue to stand behind any cause that helps create an open, honest, and safe food system.’

About the author


Steve Dittmer is the CEO of Agribusiness Freedom Foundation, a non-profit group promoting free market principles throughout the food chain. He can be reached at [email protected]



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