Commodity checkoff program

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In the United States, a commodity checkoff program collects funds through a checkoff mechanism, sometimes called checkoff dollars, from producers of a particular agricultural commodity and uses these funds to promote and do research on that particular commodity. The organizations must promote their commodity in a generic way, without reference to a particular producer. Checkoff programs attempt to improve the market position of the covered commodity by expanding markets, increasing demand, and developing new uses and markets. Checkoff programs amount to $750 million per year.[1]

The United States Department of Agriculture is responsible for overseeing the formation of checkoff organizations under the authority of the Commodity, Promotion, Research and Information Act of 1996.

These organizations are responsible for familiar American advertising campaigns, including "Milk Does a Body Good," the Got Milk? milk moustache series, "Pork. The Other White Meat", "The Incredible, Edible Egg", and "Beef: It's What's for Dinner."

United States policy[edit]

Because individual producers of nearly homogeneous agricultural commodities cannot easily convince consumers to choose one egg or orange or a single cut of beef over another, they often have joined together in commodity promotion programs to use generic advertising in an effort to expand total demand for the commodity, with the objective of helping their own sales as well. Activities are intended to expand both domestic and export demand; examples include advertising, nutrition education, research to improve product quality and appeal, market research studies, and technical assistance. These activities are often self-funded through assessments on marketings – hence, the name check-off programs.

Controversies[edit]

Congress has permitted producer groups to make checkoffs mandatory, and this aspect has generated legal challenges by some producers, who contend they must pay taxes for activities they would not underwrite voluntarily. The U.S. Supreme Court [in United States v. United Foods, Inc., 533 U.S. 405, 412 (2001)] ruled that the mushroom check-off violated the Constitutional free speech provisions (First Amendment), creating uncertainty about the future of other check-offs. Since then, separate lower federal courts have ruled that various check-offs also are unconstitutional. However, on May 23, 2005, the Supreme Court ruled that the beef check-off does not violate the First Amendment. In its decision, Johanns v. Livestock Marketing Association and Nebraska Cattlemen v. Livestock Marketing Association (Nos. 03-1164 and 03-1165), a majority of the Court agreed with check-off defenders that the programs are in fact "government speech" (an issue that was not considered in the mushroom decision).

"Compelled funding of government speech does not alone raise First Amendment concerns,"..."Citizens may challenge compelled support of private speech, but have no First Amendment right not to fund government speech."[2]

A Montana federal court ruled in June 2017 that the operation of the beef checkoff there was unconstitutional.[3]

In 2008, the American Egg Board attempted to funnel $3 million to oppose a ballot measure in California prohibiting the extreme confinement of farm animals. They were stopped by an injunction issued by a federal court.[4] In 2013, the Egg Board attempted to get government regulators and retailers to take action to halt sales of egg-free vegan “Just Mayo” brand products.[5] In this scandal, an Egg Board executive was caught discussing "putting a hit on" Hampton Creek co-founder Joshua Tetrick.[6]

Despite $4 million spent to support the retention of the checkoff, a referendum held in 2000 among hog farmers voted to eliminate the checkoff. Ann Veneman, the Secretary of Agriculture, voided the results.[7] The Pork Board also agreed to a deal that would funnel $60 million to the NPPC to fuel prohibited lobbying activity under the guise of paying for a trademark that is no longer in use. That deal is being challenged in ongoing litigation in federal court.[8]

The Senate in 2017 is considering changes to the enabling legislation.[9] The constitutionality of checkoffs is being challenged again in federal court in Ranchers-Cattlemen Action Legal Fund v. Sonny Perdue. The propriety of labelling Canadian and Mexican beef as domestic (and therefore eligible for promotion under the checkoff program) is being challenged in Ranchers-Cattlemen Action Legal Fund v. USDA.

In 2017, Congress is considering a checkoff program for Concrete Masonry Products.[10]

Major checkoff organizations[edit]

See also[edit]

References[edit]

 This article incorporates public domain material from the Congressional Research Service document "Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition" by Jasper Womach.

  1. ^ Sabet, Michael (April 2010). "UNDERSTANDING THE FEDERAL COMMODITY CHECKOFF PROGRAM" (PDF). PSU Law: 7. Retrieved 25 August 2017. 
  2. ^ Greenhouse, Linda (May 24, 2005). "Justices Say All Ranchers Must Help Pay for Federal Ads". The New York Times. Retrieved September 2, 2011. Compelled funding of government speech does not alone raise First Amendment concerns," Justice Scalia said, adding, "Citizens may challenge compelled support of private speech, but have no First Amendment right not to fund government speech. 
  3. ^ "Does Beef It's What's for Dinner Violate the First Amendment? In Montana, a Judge Says Yes". Retrieved August 21, 2017. 
  4. ^ "Chickens Beat Eggs in Proposition 2 Lawsuit". Retrieved August 21, 2017. 
  5. ^ "USDA Says American Egg Board's Anti-Vegan Mayo Campaign Was 'Inappropriate'". Retrieved August 21, 2017. 
  6. ^ "The Egg Industry Launched a Secret Two-Year War Against a Vegan Mayonnaise Competitor". Retrieved August 21, 2017. 
  7. ^ "Hog Farmers Criticize Veneman for Not Terminating Checkoff". Retrieved August 21, 2017. 
  8. ^ "Lawsuit on Hold While USDA Reviews Pork Trademark Contract". Retrieved August 21, 2017. 
  9. ^ Huehnergarth, Nancy Fink (July 14, 2016). "Senators Introduce Bill To Halt Anticompetitive Activities Of USDA Checkoff Programs". Forbes. Retrieved 25 August 2017. 
  10. ^ "H.R. 1046: Concrete Masonry Products Research, Education, and Promotion Act of 2017". govtrack. Retrieved Aug 22, 2017. 

External links[edit]