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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.
www.worc.org
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
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