Harrison M. Pittman, Director, National Agricultural Law Center

On December 23, 2016, USDA announced in a court pleading filed in Ranchers-Cattlemen Action Legal Defense Fund, United Stockgrowers of America v. United States Department of Agriculture, 4:16-cv-00041-BMM, Doc. 45 (D. Mont., Dec. 23, 2016) (R-CALF) that a Memorandum of Understanding (MOU) has been entered into between the USDA Agricultural Marketing Service (AMS) and the Montana Beef Council (MBC) for the purpose of providing direct AMS oversight of the MBC in its use of state-retained funds derived from the $1.00 per-head assessment paid by Montana beef producers pursuant the national beef research and promotion program. Importantly, the MOU also binds all third-party persons, entities, or institutions that contract with MBC to conduct research, consumer information, and industry information programs. Additionally, the MOU provides that the USDA Secretary “or agents of the Beef Promotion Operating Committee or the Beef Board may audit periodically the records of the contracting party.” The MOU is binding on MBC until such time as both MBC and AMS mutually agree to terminate the MOU.

The MOU represents an historically and legally significant shift in the administration and operation of a state beef council under the national beef research and promotion program. Further, the MOU carries very significant implications for future federal-state implementation of both the national beef and soybean research and promotion programs. As such, the December 23 development is relevant to Qualified State Beef Councils (QSBCs), Qualified State Soybean Boards (QSSBs), states’ departments of agriculture and states’ farm bureaus that administer state beef and soybean programs, and any parties that contract with QSBCs and QSSBs. The nature of the legal issues at play in the R-CALF lawsuit strongly suggest that the MOU concept could be exported and applied to other QSBCs and QSSBs across the nation.

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