USDA and Agribusiness Cartel Plot to Destroy a Small Business

A bipartisan bill was just introduced by Senators Cory Booker (D, NJ) and Mike Lee (R, UT) aimed at preventing federal programs that were established to promote sales of agricultural products from being illegally used to attack competitors and influence public policy. The Commodity Checkoff Program Improvement Act of 2016 is a reaction to the discovery last year of an egregious conspiracy between the American Egg Board and a U. S. Department of Agriculture official to destroy a small company producing an eggless vegan mayonnaise.
Documents released last year under the Freedom of Information Act revealed that the American Egg Board, a compulsory cartel of egg producers supervised by the USDA, attempted to destroy small start-up Hampton Creek, producer of Just Mayo. The Egg Board is one of several commodity checkoff programs that are designed to promote commodities such as eggs, beef, pork, mushrooms and soy. These programs are funded by mandatory fees levied on all producers of the commodity – whether they wish to participate or not – and their budgets and activities are supervised by USDA. The boards are legally barred from using their funds to attack competitors or influence public policy.
When Just Mayo appeared for sale on the shelves of the the Whole Foods grocery chain in 2013, Joanne Ivy, the president of the Egg Board, sounded the alarm to fellow cartel members via email, calling the new product “a crisis and major threat to the future of the egg product business” and asking:
What are we doing at AEB with regard to this competing product? We need to have an answer.

This post was published at Ludwig von Mises Institute on Joseph T. Salerno.