Very little incites a good coffee shop argument than someone taking a strong pro or con position on a commodity checkoff program. All farmers have opinions, strong opinions, and those who have not served a couple terms on a commodity checkoff board have been those who have attempted to dismantle the programs. With the renewal of the Farm Bill, and perennial challenges about their constitutionality, what are the challenges facing commodity checkoff programs?

Nearly three-quarters of a billion dollars are collected by some of the largest checkoff programs regulated by USDA, and nearly half of that is paid by the dairy producers and the milk processors. Other large programs include soybeans at $88 million, beef at $81 million, cotton at $71 million, and pork at $47 million. All are monitored by USDA’s Agriculture Marketing Service; all are mandatory programs; and all of them have farmers who contribute into the programs make decisions on the use of the funds.

But in preparation for the Farm Bill, Members of Congress were provided fact sheets on commodity checkoff programs developed jointly by the Farm Foundation, Texas A&M University, and the National Public Policy Education Committee, all of which took a neutral position for the purposes of educating Congress. The groups said the generic advertising and promotional programs have come under intense scrutiny and legal challenges in recent years by individuals who question if their mandatory contributions for mass marketing are any better than individually-funded marketing efforts.

Authority for such programs goes back to 1937 with the Agricultural Marketing Agreement, and successive farm policies have enlarged the authority over the years. Early voluntary programs operated with little controversy. Mandatory programs overcame problems with “free riders.” Some programs authorized refunds after collection and expenditure.

But recent years have brought numerous court challenges by non-supporters and parallel concerns have arisen about the programs being compliant with World Trade Organization requirements. The initial Supreme Court decision, which occurred in the beef checkoff, found that USDA regulation of the programs constituted “government speech,” rather than private speech when First Amendment issues arose. Since the days of the early non-controversial programs, agriculture has changed with fewer, larger producers, and the smaller producers believe larger producers are in a better position to profit from the checkoff programs.

With the new Farm Bill, what challenges will face the checkoff programs which have a wide variety of rules and regulations? The study groups point to four possible challenges in their fact sheets:
1) Exemptions and opt-out provisions will be a continuing battle by small producers wanting independence, even though the largest producers of a commodity still produce a small percentage of the total commodity. The larger producers may be in a position to better benefit from the value of the checkoff program by virtue of their structure, and some programs may find a consensus in allowing producers under a certain threshold to opt out without hurting the program with the loss of the majority of producers.
2) The origin of the message will rise in consideration for some checkoff programs and will have to be resolved with all messages funded by the checkoff to be attributed to the federal government, rather than to the board of farmer directors who oversee the allocation of funds. That will reduce the complaints from opponents that some group of farmers is speaking which does not represent them.
3) More research funds may have to be diverted away from basic or advance research and directed at demonstrating to producers opposing the checkoff program about the ways their contribution has benefited them specifically. For example it may show how a specific product developed from the checkoff program increased the value of the commodity and a producer benefited with additional dollars from commodity sales.
4) Many of the commodity checkoff programs have funds allocated for export market development, and the WTO may take the position that such funding is not compliant with its rules and is closer to an export subsidy, which has been determined to be illegal under current regulations.

Summary:
Checkoff programs have touched every farmer in the Cornbelt, and many farmers in the rest of the US, but they remain controversial because the mandatory nature of them is in conflict with the independent nature of the farmer. Recent court challenges have only scratched the surface of issues which question the propriety of the checkoff programs and several other issues may confront checkoff proponents in coming years.