The State of Animal Agriculture, Part I: USDA Subservience

This is Part I of a three part series on the state of animal agriculture in the United States.

The USDA—specifically, the Agricultural Marketing Service (AMS) branch—oversees “research and promotion boards,” funded via mandatory checkoff programs, which contract with private industry with the goal of increasing the sales of a given commodity.

Farmers are required by law to pay a portion of each sale to the relevant board for each commodity that is subject to a checkoff program. Typically, half the proceeds help fund a farmer’s state-run board and half go to the national board, though a farmer may decide to have all of her checkoff money given to the national board if she so chooses. The objective is to use advertising, consumer relations, research, and other tactics to maximize demand for a product that benefits all producers rather than, say, a particular manufacturer.

There are currently 22 such boards—one for everything from Christmas trees to mangoes to cotton—and not all farmers are thrilled about having a portion of each sale taken from them. Representatives of any agricultural industry may propose that the USDA establish a research and promotion board for their commodity, should they wish to do so. Each board is a quasi-government agency, and AMS oversight of boards is divided into five categories: fruit and vegetable; poultry; dairy; livestock and seed; and cotton and tobacco.

The first boards were established in the late 70’s and their advertisements quickly seeped into the collective American conscious; “Got Milk?” “Beef. It’s What’s For Dinner.” and “Pork. The Other White Meat,” are some of the more recognizable campaign slogans created with checkoff dollars. But it wasn’t long before the Office of the Inspector General received complaints about board activities that led to scathing audits of AMS oversight—or lack thereof.

“Our review disclosed serious problems with the […] Board’s management structure and with the manner in which expenditures were made,” reads the executive summary of a 1998 audit by the Office of Inspector General (OIG) on the National Fluid Milk Processor Promotion Board, covering the inception of the board in December 1993 through June 30, 1997. “The Board remained detached from the day-to-day operations of the Program, delegating all administrative tasks to contractors and taking no independent actions to ascertain the effectiveness of the Program. According to the Board Administrator […], he did not believe anyone was interested in knowing whether the Board’s activities influenced milk consumption.”

And AMS provided “little active oversight of the Board’s activities,” according to the report. The board entered into no-bid, “sole-source” contracts, often without obtaining approval from AMS beforehand, as is required by law. The board was not receiving progress reports from the firms they contracted and sub-contracted to perform work on behalf of milk producers, leaving them in the dark as to whether the projects were effective or being completed at all.

Perhaps even worse: “The Board presented audited financial statements which did not accurately reflect its financial condition. The financial statements as of March 31, 1995, and as of April 30, 1996, contained material omissions and questionable statements that, in the aggregate, were significant enough to affect the decisions of its users.” As a result, the USDA’s reports to Congress in 1995 and 1996 on the milk board’s performance omitted from the board’s balance sheet the liability of over $350,000 for “incentive commission” for an advertising campaign and failed to disclose that $127 million in checkoff funds were expended without USDA approval.

The audit report even featured a heated exchange between OIG and AMS over the board’s decision to allow photographers for the famed celebrity “Got Milk?” mustache series (even Dr. Phil participated) to keep the copyright to the photos. As a result, the board paid the photographer a fee for each year they wished to use the photos rather than stipulate in the contract that the board shall receive ownership.

To put it as bluntly as an OIG report possibly can, “AMS effectively left all oversight responsibilities to the Board, and the Board, because it had no employees, left its oversight responsibilities to the contractors it relied on for administrative services.”

This is a common theme among the boards: serving as a mere vehicle for less transparent contractors to perform work funded by producers.

A 1999 OIG audit of the National Pork Board revealed that AMS was none the wiser. The board—at least between 1996 and the initiation of the audit—was awarding all contracts to the National Pork Producers Council (NPPC). “In our opinion, the Board’s relationship with the NPPC and its degree of dependence on it have subjected checkoff funds to a level of NPPC influence that is unnecessary and inappropriate,” reads the report. “Two committees that were funded entirely with non-checkoff dollars included Board members even though the committees engaged only in NPPC business. Another three committees that were funded partially with checkoff dollars did not include a Board member; these three committees engaged only in NPPC business.”

In fact, the board and NPPC were effectively one in the same: “The Board’s offices are located in a building owned and occupied by the NPPC. The Board pays rent to the NPPC and shares common facilities, such as meeting rooms, kitchen, library, receptionist, telephone system, and other equipment. The Board may be reached through the internet, but only through the NPPC domain at “nppc.org,” which incidentally is maintained with checkoff dollars provided through the Board. The co-location of headquarter offices of the Board and the NPPC may not be a significant factor in the Board’s independence, but it promotes the perception of the Board’s dependence on the NPPC.” Unnecessary and inappropriate influence, indeed.

To recap: producers of a commodity that corresponds to a USDA-approved research and promotion board have no choice but to pay forward a portion of each sale, with the goal of increasing sales by funding projects that promote the commodity. Instead, farmers unwillingly fork over their cash, only to have it line the pockets of contractors to whom the boards outsource all of their duties—who then contract, sub-contract, and sub-sub-contract with other firms—effectively veiling from the producers and public-at-large how the money is spent and who benefits. There can be little doubt that this is a contractor’s wet dream.

As the New York Times reported in 2010, a financial review of the activities of the National Cattlemen’s Beef Association—the largest contractor of the beef board—found that checkoff funds were used for lobbying, in violation of federal guidelines. Forrest Roberts, the NCBA’s chief executive, used board money for travel expenses for himself and his family; expenditures and worker hours were charged inappropriately; and documentation was lacking.

A March 2012 OIG report which investigated AMS oversight of all research and promotion boards concluded that “AMS needs to improve its monitoring of the five program areas that oversee the various boards’ activities.” Regarding the guidelines for board conduct previously used by AMS, “[w]e also concluded that AMS did not recognize […] that its oversight role extends to monitoring subcontracts”—a troubling observation given that boards frequently outsource all operations to contractors who inevitably use subcontracts to carry out board activities.

Another OIG audit report, this one dated January 2014, investigated AMS oversight of the beef board’s activities. The report recommended that AMS “strengthen their oversight controls.” “For example, AMS had not identified deficiencies in the beef board’s internal controls over project implementation costs. This occurred due to inadequate AMS procedures for performing management reviews of beef board operations and AMS officials’ decision to perform these reviews of the beef board only if a complaint or concern arose.” The review selected a random sample of 983 transactions and found that “the beef board had not required detailed cost estimates from contractors prior to approving project implementation costs.”

But concern over boards’ conduct goes further than questionable expenditures, the lack of transparency resulting from outsourcing all board responsibilities to the same one or two contractors year after year, and poor oversight.

Outrage erupted in 2015, after FOIA-maven Ryan Shapiro unearthed emails revealing the American Egg Board’s years-long campaign against Hampton Creek (now JUST, inc.)’s egg-free mayo. AMS launched an investigation into the AEB’s activities. AEB staff, whose testimonies were included in the subsequent report, repeatedly asserted—against a mountain of evidence—that they were waging a battle against vegan mayo as a whole rather than Just Mayo in particular. The latter, of course, is not permitted.

This scandal—which led to the resignation of the AEB’s CEO Joanne Ivy—is hardly an isolated incident; the boards often skirt, and may occasionally cross, the fine line between promoting their commodity and disparaging others.

Using FOIA, the New York Times reported in 2010 that Dairy Management, inc.—a contractor of the Dairy Board—teamed up with restaurants to “sell more pizza and more cheese!” In a 2003 USDA report to Congress on the activities of the Dairy Board, a partnership with Taco Bell produced “a new Steak Quesadilla item,” which, the USDA gleefully pointed out, “used an average of eight times more cheese than other items on their menu.” The board also teamed up with Pizza Hut and Domino’s, the former of which declared summer 2002 the “Summer of Cheese,” during which time they reintroduced the stuffed crust pizza.

Needless to say, as reporter Michael Moss observed, overseeing these activities while also producing dietary guidelines for Americans—as the USDA does—poses a conflict of interest. The result is a set of guidelines that says what to eat more of instead of what to avoid, according to Jeff Herman, author of “Saving U.S. Dietary Advice From Conflicts of Interest,” published in a 2010 issue of the Food and Drug Law Journal. 

“[T]he USDA should not have any role in dietary advice, as its duty to promote and support the agricultural industry is fundamentally inconsistent with promoting health and preventing chronic diseases,” writes Herman. “This put[s] the USDA in a tough position: if it follow[s] the science, it would violate its duty to promote the agricultural industry; if it protect[s] the industry, it would violate its duty to issue science-based dietary advice.”

More troubling: “[I]n 1991 the USDA delayed publishing the Eating Right Pyramid after the meat and dairy industries demanded it be withdrawn. When finally released in 1992, the Pyramid had 33 changes, including the highest recommended daily intake of meat ever.”

Surprising no one, many high-ranking employees of the USDA – including those who serve on the advisory committee that creates the dietary guidelines – have major current or former ties to the very agribusinesses who stand to gain from the non-confrontational and unclear dietary advice we are graced with every five years.

Despite the fact that the laws which regulate the operation of these boards—overseen by the Agricultural Marketing Service of the USDA—bar advertising campaigns which are “false” or “misleading” or which otherwise denigrate another commodity, much of the promotional material published through these programs is shoddy, inaccurate, and critical of alternative foods.

In Part II, we will take a look at how the animal agriculture industry uses checkoff funds to propagate unsubstantiated, misleading, and improbable claims about animal-based foods and their plant-based counterparts.

 

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