Question: Who Pays The Beef Checkoff Program?
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About ‘Who Pays’
1) Who pays the dollar?
By law, all producers selling cattle or calves, for any reason and regardless of age or sex, must pay $1 per head to support beef/veal promotion, research and information through the Beef Promotion and Research Act, which is the 1985 enabling legislation for the Beef Checkoff Program. The buyer generally is responsible for collecting $1 per head from the seller, but both are responsible for seeing that the dollar is collected and paid.
In addition, the checkoff is collected at the same rate on every live beef animal imported and at the equivalent rate of $1-per-head on all beef products that are imported. [The current equivalent weight on live cattle is 592 pounds, and the formula for figuring the equivalents on imported beef and beef products is in the Beef Promotion and Research Order. See details of the rule in the Federal Register that set the current rate]
2) Is anyone exempt from paying the dollar?
Producers of 100 percent USDA-certified organic products are exempt from most commodity checkoffs, based on separate legislation, but they must meet strict requirements and re-apply for certification on an annual basis. No other producer is exempt from the beef checkoff, according to the Beef Act. Buyers who resell cattle no more than 10 days from the date of purchase may file a non-producer status form and avoid paying an additional dollar. They are, however, responsible for remitting collected funds and reporting any transactions to the qualified state beef council.
3) Who polices the collection of beef checkoff dollars in the case of over-the-fence trades between neighbors?
That is a tough one, because state beef councils and the Beef Board can’t police every transaction. To some degree, these collections depend on the integrity of our friends and neighbors. But state beef councils and the Cattlemen's Beef Board have a variety of tools for following cattle sales, and any private sales discovered after-the-fact not to have paid the checkoff assessment are subject to penalties, fines and late fees.
4) What is the penalty if someone doesn’t pay the $1 per head assessment?
A late fee of 2 percent on the assessments owed is compounded monthly. USDA can assess a civil penalty of up to $7,500 per transaction [the sale of one animal], plus those late fees.
5) Why do you take $1 per head?
The amount was established by the Beef Act and approved by 79 percent beef producers voting in a referendum. By law, half of the dollar collected can remain in the state to be invested in qualified programs. The beef checkoff was designed to increase consumer demand for beef and to create opportunities to enhance producer profitability. Checkoff dollars are invested in: promotion, research, consumer information, industry information, foreign marketing and producer communications programs. Some good examples of checkoff work are: the industry’s BSE preparedness and response; the Beef. It's What's for Dinner integrated marketing campaign; and the Beef Quality Assurance Program.
6) I’m a dairy producer - why do I pay $1 per head?
Although your primary business is producing milk, you also produce beef from the cows you send to market, or the male calves you sell. In fact, about 20 percent of the beef produced in the United States comes from dairy stock. Producers who helped write the Beef Act wanted to be certain that all producers who would benefit from increased beef demand would share in the cost of funding the program. Dairy producers are represented on state beef council boards and the Beef Board, which currently has about 20 dairy members.
7) Can my state beef council get all of my checkoff money? Why does some of it have to go to the Cattlemen's Beef Board? I think my state beef council and CBB do some of the same things – isn’t this a duplication of efforts?
The Act holds the answer to both of your questions: First, the Act says that 50 cents may stay in the state to conduct qualified programs, but the other 50 cents must go to the Beef Board for investment in national programs, from which state beef councils can get materials and extend national programs, in addition to their own state-based ones. Second, the Act also created a funding authority – the Beef Promotion Operating Committee – with representatives from the Federation of State Beef Councils and the Cattlemen's Beef Board to make sure efforts funded by the checkoff are coordinated and spent in accordance with the Beef Act and Order.