I-BAND expresses concerns with increase ND brand inspection fees; calls for performance audit of brand program

The Independent Beef Association of North Dakota (I-BAND) expresses concerns with a proposal by the North Dakota Stockmens Association (NDSA) to increase brand inspection fees in the state by 50 percent, from the current $1.00 per head to $1.50 per head, and is calling for a performance audit of the brand inspection program in order for stakeholders to better understand how brand inspection revenues are being spent. Last month, North Dakota’s State Board of Animal Health approved the increase proposal, which now moves to North Dakota Agriculture Commissioner Doug Goehring for appropriate public notification and a public comment period.

The North Dakota brand inspection program is administered by NDSA and the Brand Board consists of the NDSA executive committee plus four additional members. Brand inspection fees were raised in 2011 from 75 cents to $1.00 per head, amounting to a 33.3 percent hike. According to 2013 IRS filings available in the public domain, NDSA reported total revenues of $2,336,258 including brand inspection revenues of $1,326,526, brand recording revenues of $17,599 and the estray fund revenues were $233,260. Membership dues revenue of $153,506 accounted for just 6.5% of the organization’s total income for the year.

Earlier this year, NDSA successfully lobbied the North Dakota Legislature in obtaining a $1.00 per head increase in the state-wide beef checkoff, estimated to raise an additional $1 million annually from North Dakota’s cattle producers on top of the $1 per head already being collected for the national checkoff program.

I-BAND president Larry Kinev says his organization wants the brand inspection program audited before any increase is considered so producers who are paying the fees can be assured that the funds are being spent efficiently and effectively and are not being used to support a private organization’s political agenda. “It’s not a good business practice for the State of North Dakota to authorize a private lobbying organization to control a state mandated program,” noted Kinev. “Our neighbors in South Dakota struggled with this same issue several years ago and, in the end, administration of the state mandated brand program there was removed from a private cattle organization and placed into the hands of the state so producers could feel confident that their brand fees were not being used to support a policy group’s political endeavors. A performance audit will shed light on how the program in North Dakota is functioning and whether or not another increase is warranted.”

“To date, livestock producers in North Dakota have not been formally notified about the intended increase,” noted Kenny Graner, I-BAND immediate past president. “If the Agriculture Commissioner is going to advance this initiative, then producers deserve to be notified appropriately and an adequate public comment period should commence after that notification occurs. This proposal amounts to a 50 percent increase in fees on top of the 33% increase made just four years ago. Stakeholders deserve the opportunity to voice their opinion about the proposed increase and I-BAND will be working towards that goal.”

“The vast majority of brand programs in this country are administered by state government,” noted Mike Heaton, former president of I-BAND. “Some states like Wyoming have statute in place that caps the percentage brand fees can be increased. If this proposed increase were to go through, the NDSA would accomplish an 83% increase in brand revenues in under five years. I don’t believe North Dakota cattle producers will support that. If the State of North Dakota believes this is a wise business model then it could be argued that Triple A should be running the Department of Transportation. It’s time to scrutinize how brand fees are being used, how the estray fund is being managed and modernize the program so that it’s free of political entanglements.”