Issue in Focus
There is perhaps no better illustration of how, and for whom, the federal government works today than the case of the American Egg Board and its hostility toward a start-up food company called Hampton Creek.
The American Egg Board (AEB) is an administrative body appointed by the U.S. Department of Agriculture (USDA) to oversee the national egg checkoff program, which imposes a tax on egg producers in order to fund research and promotional activities related to eggs. (Similar checkoff programs, and implementing administrative boards, exist for many other commodities, like beef, milk, and even paper.) According to their website, the AEB’s mission is “to increase demand for eggs and egg products through research, education and promotion.”
But, according to a series of emails obtained under the Freedom of Information Act, many individuals in senior leadership positions at the Egg Board apparently believe that their mission goes much further.
The 600 pages of correspondence suggest that members of the AEB staff, USDA officials, and top executives from the egg industry engaged in a strategic, multifaceted campaign to use the power and resources of the federal government to undermine the economic prospects of Hampton Creek.
What did Hampton Creek do to draw the ire of the Egg Board? It disrupted the agricultural and food industries by developing popular and affordable eggless alternatives to many egg-based products, using plant-based proteins.
No wonder Joanne Ivy, AEB’s President and CEO, said in an email to colleagues that Hampton Creek’s vegan mayonnaise, Just Mayo, poses a “a crisis and major threat to the future of the egg product business.”
The USDA has an obligation to conduct a thorough investigation into all activities and correspondence of the American Egg Board related to Hampton Creek to determine whether, as the emails suggest, anyone at the AEB violated the federal laws and administrative regulations governing checkoff programs.
At the same time, Congress ought to undertake its own inquiry into the legitimacy and the fairness of agricultural commodity checkoff programs generally.
These checkoff programs first began in 1937 when Congress passed the Agricultural Marketing Agreement Act in response to the dire economic conditions and plummeting crop prices of the Great Depression. But today, with an economy and a farming industry that have changed and improved substantially since the 1930s, are these programs still necessary? Is it fair to give a select group of commodity producers privileged access to the powers of the federal government in order to promote their products?
If these Great Depression era institutions have outlived their purpose, and if the evidence shows that they behave like state-sponsored cartels that intimidate and handicap their competition at the expense of American consumers, Congress should cease authorizing them.