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Checkoffs, mushrooms and dominoes

by David Dechant

(July 16, 2001 CropChoice opinion) Recently, the Supreme Court Ruled in favor of United Foods, a mushroom grower that refused to pay the mandatory assessment on its mushrooms for generic advertising. This ruling has some very serious implications for the other dozen or so commodity checkoff programs in the US. Moreover, it could even mean that corporate agribusiness might lose a lot of free product development and promotion for hormones and GM crops.

This is the second time the nation's highest court ruled on mandatory checkoff assessments. The first time was in regards to the California tree fruit checkoff, which the court upheld. Later, the US 6th Circuit Court of Appeals, upon hearing United Food's case, interpreted the Supreme Court's ruling on the tree fruit checkoff as such:

" In the Wileman case, the Supreme Court emphasized and reemphasized that the compelled advertising program for California tree fruits under the Agricultural Marketing Agreement Act of 1937 contemplates "a uniform price to all producers in a particular market," a "policy of collective, rather than competitive, marketing" and an exemption from the antitrust laws in order "to avoid unreasonable fluctuation in supplies and prices." Wileman, 521 U.S. at 461. In his opinion for five members of the Court, Justice Stevens repeatedly "stress[ed] the importance" of the fact that the advertising takes place "as a part of a broader collective enterprise in which [the producers'] freedom to act independently is already constrained by the regulatory scheme." Id. at 469. In contrast, the mushroom market has not been collectivized, exempted from antitrust laws, subjected to a uniform price, or otherwise subsidized through price supports or restrictions on supply. Except for the compelled advertising program assessing growers based on their volume of mushroom production, there appears to be a relatively free market in mushrooms, both processed and fresh.(3)"

http://pacer.ca6.uscourts.gov/cgi-bin/getopn.pl?OPINION=99a0391p.06 The 6th Court ruled in favor of United Foods. The US government, wanting to continue the mushroom checkoff, appealed to the Supreme Court. Now that it has ruled and made some very important distinctions between the two checkoffs, why one violates free speech but the other does not, other checkoffs are worried they might fall like dominos as a result.

From what I see, most other checkoffs are more like the mushroom checkoff than the California tree fruit checkoff. For example, producers affected by other checkoffs are not forced to make cooperative decisions or market by cooperative rules. Nothing prevents individual growers from acting independently and making their own marketing decisions. Furthermore, if, in fact, pork producers had an antitrust exemption and made marketing decisions collectively, would they ever have decided to sell hogs for 5 cents a pound, as they did a few years ago?

One of the first dominos to fall could be the beef checkoff. Steve and Jeanne Charter from Montana have a suit in federal court challenging it, which had been put on hold pending the Supreme Court's decision.


If the Charters win their suit, watch all of the other checkoff organizations start masquerading as a bunch of California tree fruits in an attempt to escape the Supreme Court's ruling. Instead, they should be working on how they will function as voluntary organizations, which they can do. And because producers don't have the choice of whether they want to be assessed at the point of sale and must apply for refunds in writing and within 30 days under current voluntary checkoff rules, all producers get assessed but many don't bother getting refunds. However, since it is possible to get a refund, most dissenting producers can live with such rules.

One might wonder why so many producers are upset with checkoffs, since they are supposed to be for the producers' benefit. However, many dissenting beef producers feel the beef checkoff promotes hormones and gives processors free product development and retailers free advertising. As for pork producers, the fact that many family pork growers went broke due to massive oversupply, exacerbated by the mega corporate hog factories, speaks for itself.

As a Colorado corn and wheat farmer, I'm glad the corn checkoff in my state is fully refundable and I hope the wheat checkoff will be made that way, too. When I see the state directors of these checkoffs testifying against labeling at a state senate hearing, I feel like they're promoting GMOs, something oppose.

One really big problem with checkoffs is that they have the same "let's not upset our corporate donors" mentality that the farm organizations which accept corporate donations have. That's because they are closely affiliated with these same organizations and while they might have separate boards of directors, in many cases they share office facilities and staff. Even where no such sharing exists, they still work closely together. And that's why many feel checkoffs are no more than a propaganda arm for agribusiness corporations.

If all checkoffs eventually are forced to become voluntary, I encourage all producers who get refunds, if they can afford to part with the money, to use their refunds to support activist farm groups that accept no corporate favors. Then, perhaps, we can begin to stop the attrition of family farmers and livestock producers.

Finally, I am all for promoting what I grow. However, assuming checkoffs really do increase demand for our production, then maybe those things that negate or reverse their accomplishments in doing so should be assessed, specifically, those things which cause overproduction or tarnish our products' good reputations, rather than assessing every farmers' production.

David Dechant is a Colorado wheat farmer