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Rice, soybean organizations argue over marketing money.

HOW SHOULD SOYBEANS AND rice be marketed?

Most Arkansans probably will never think about the question. But for the state's soybean and rice farmers, the issue is worth pondering.

Farmers pay a "checkoff" for each bushel sold of either rice or soybeans. The checkoff then funds research and promotion of the respective crop. Think of a checkoff as the farmer's equivalent of an advertising and promotion sales tax levied by many cities.

With millions of bushels of Arkansas rice and soybeans sold each year, the amount paid in checkoffs can grow large quickly. So choosing which organization will receive the funds can grow contentious.

The Arkansas Soybean Promotion Board collected $4.5 million in checkoffs in fiscal 2008, and the Arkansas Rice Research & Promotion Board collected $5.6 million in fiscal 2007, the last year for which figures are available, according to the respective boards. The governor selects both boards' members.

In the past year, spats have developed between leading rice and soybean organizations about how the funds are spent. Arkansas lawmakers considered legislation during the 2009 General Assembly that would have allowed Arkansas rice farmers to direct funds to the US Rice Producers Association instead of the USA Rice Federation, the traditional recipient of checkoff funding. And the U.S. Soybean Federation formed in early 2009 to oppose the American Soybean Association's request for an investigation of how the United Soybean Board handled the checkoff funds it oversees.


The rice skirmish is playing out on a small scale. During the past legislative session, the nonprofit US Rice Producers Association backed legislation that would have allowed the state's rice farmers to choose where their rice checkoff money goes. Senate Bill 349 never made it out of committee.

Arkansas currently levies 2.7 cents for each bushel of rice sold, with the farmer and rice broker each paying half. If the bill had passed, the legislation would have required rice farmers to pay the full 2.7 cents but would have allowed farmers to choose which organizations received the portion earmarked for promotional activity.

The bill failed because it would have raised the amount rice farmers pay, Ben Noble, the Arkansas Rice Federation's executive director, said.

"The bill would have doubled the assessment that farmers pay--doubling their assessment at a time when nobody is considering taking on new funding," Noble said. "The vast majority of Arkansas rice farmers support the existing funding of the rice checkoff."

Currently, the rice checkoff money is collected by the Arkansas Department of Finance & Administration. It then goes to the Arkansas Rice Resource & Promotions Board, which invests half of the proceeds in research and passes along half to the USA Rice Federation for promotions. The USA Rice Federation, of Arlington, Va., is a nonprofit lobbying organization for the rice industry.

Because rice farmers must pay the checkoff but do not determine where the funds will go, Greg Yielding, who supported the bill, said the current system was unfair.

"In Arkansas, we don't have a checkoff; we have a tax," said Yielding, executive director of the Arkansas Rice Growers Association, a private organization representing rice farmers in the state. Other states allow farmers greater choice, Yielding said. Yielding, whose association is affiliated with the U.S. Rice Producers, cited Texas and Missouri as states that offer farmers a refund on their checkoff contributions. Mississippi holds a periodic referendum among rice producers to assess whether farmers are happy with the use of checkoff funds.

Gary Sebree farms rice near Almyra (Arkansas County) and did not support the legislation supported by the US Rice Producers Association. The legislation introduced during the past session was "poor," he said. He also believes the current checkoff program is not broken, so why fix it?

"We have legislation in place today that allows us to handle our rice checkoff through the rice promotions board," he said. "I believe that is best."

Rice farmers sit on the board that oversees where the checkoff goes, Sebree said. He would rather rely on the board members' expertise than allow all farmers to weigh in on what can become a complicated issue.

"That sounds good on paper: 'Let's let everyone choose.' But that's not how democracy works," Sebree said. "I don't think our state Legislature is going to give everyone in Arkansas a choice where their tax dollars are spent.

"Our time would be better spent with real issues, not our checkoff," Sebree said.

Yielding countered that the selection process for the rice promotion board ensures that groups other than rice farmers have too much power. The governor selects the board based on recommendations provided by several Arkansas organizations, including the Arkansas Farm Bureau and Riceland Foods of Stuttgart, Yielding said.

Despite the bill's failure, Yielding and the Arkansas Rice Growers Association will continue pushing the issue, he said.

"We are going to keep on," Yielding said. Lobbying efforts during and before the 2009 general assembly helped inform legislators, and Yielding expects continued lobbying and education to further enhance his organization's position. "Eventually we are going to prevail and farmers are going to get a choice."


The tiff between soybean organizations boiled over in December when the American Soybean Association, a nonprofit advocacy group based in St. Louis, successfully petitioned the U.S. Secretary of Agriculture to conduct an audit, and possibly an investigation, into the National Soybean Checkoff Program, which the United Soybean Board oversees. The soybean board is a private organization led by soybean farmers that determines how the soybean checkoff will be spent for research and marketing.

In January, soybean growers in Minnesota, Missouri and Mississippi formed a nonprofit advocacy group titled the U.S. Soybean Federation to oppose the Soybean Association's actions.

The Soybean Association asked the U.S. Department of Agriculture to audit the checkoff program's administration of annual checkoff funding. Allegations of the checkoff program's misdeeds include an employee allegedly using a knife against an individual during an official function; an alleged improper sexual relationship that disrupted the Japanese foreign office and almost jeopardized U.S. soy exports to Japan; misusing checkoff funds for the improper relationship; alleged nobid contracting violations; terminating "whistleblower employees"; and more, according to an ASA release.

The U.S. Soybean Federation formed because several farmers opposed the "negative campaign" the ASA led against farmers on the United Soybean Board, said Warren Stemme, USSF vice president and a soybean farmer from Chesterfield, Mo.

"We have always supported the checkoff, and we don't have a problem with the audit," said Stemme, who was appointed to the ASA board days after the initial audit was requested.

After the audit was requested, "What immediately followed was a negative campaign against the farmer-leaders who head the USB," Stemme said. "What we have is a problem with the negative campaign that ensued."

The federation is still attempting to gain members. The original organization included members from Minnesota, Missouri and Mississippi. Since then, the Nebraska Soybean Association has joined. The federation grants each participating organization three seats on its board of directors, Stemme said.

"Whether you are a large soybean-producing state or you are a smaller soybean-producing state, you each get three board members on the federation's board," Stemme said.

The federation is currently developing its policy positions and is searching for an executive director. Supporting the checkoff is a stance the federation will maintain, though.

"Without the national checkoff, you wouldn't be able to accomplish these things on a national basis as we have," Stemme said.

By Mark Hengel
Arkansas Rice Research & Promotion Board for fiscal 2007

Gross Collections $5.6 million
Research/Extension $2.5 million
Promotion/Market development $2.7 million


Breeding and genetics ($298,876)
Breeding and evaluation for improved rice varieties ($328,017)
Quality analysis for rice breeding and genetics ($122,931)
Research projects on three Arkansas ecosystems ($12 million/

Arkansas Soybean Promotion Board for fiscal 2008

Gross Collections $4.5 million
Promotion $2.1 million
Research/extension $1.8 mill ion


Early-season soybean production system ($297,153)
Full-season soybean production system ($460,877)
Comprehensive disease screening of soybean varieties in Arkansas
Double-crop soybean system ($184,648)
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Title Annotation:AGRICULTURE
Author:Hengel, Mark
Publication:Arkansas Business
Date:Aug 31, 2009
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