There are certain events and decisions in everyone's life that have a major impact. We often call these “defining moments.” Some come suddenly, others more slowly.
Industries have defining moments, too. Looking at the pork industry the latter half of the 20th century, the formation of the National Swine Growers Council in 1954 qualifies as a defining moment. This council focused on developing meat-type hogs and initiating pork-specific promotional programs.
A decade later, amendments to the Packers & Stockyards Act paved the way for a voluntary checkoff program. In 1965, industry stakeholders met in Moline, IL, and developed the “Blueprint for Pork,” a master strategy to organize the nation's pork producers — another pivotal event.
A national voluntary checkoff program, dubbed “Nickels for Profit,” was launched in 1968, providing a vehicle for producers to contribute 5¢/head to a national fund.
Legislative Checkoff Drafted
Twenty years after the renowned “Moline meeting,” industry stakeholders refocused on helping draft a legislative initiative prescribing a national, mandatory checkoff program under which all producers of hogs and pigs and importers of hogs and pork products would be required to contribute to an industry self-help fund. The Pork Promotion, Research & Education Act was incorporated in the 1985 Farm Bill and enacted in 1986 at an initial rate of 25¢/$100 of market receipt value. The Pork Act dictates that the rate cannot exceed 50¢/$100 value.
Fifteen years later, a handful of pork producers challenged the mandatory checkoff enacted by Congress, on the grounds that it violated their First Amendment rights. Their argument — they oppose having to contribute to programs and promotional messages they do not endorse.
The USDA conducted a referendum on the legislative checkoff in the fall of 2000. The tabulated results were challenged, setting in motion a series of legal challenges and appeals from both sides of the issue.
The fate of the checkoff now resides in the hands of the judicial system, possibly even, the highest court in the land — the Supreme Court.
If lower court rulings and appeals push the case that far, I'm told the Department of Justice and the USDA will encourage Supreme Court justices to hear the appeal and provide a ruling that could affect other commodity checkoff programs, too.
Meanwhile, a great deal of scrutiny and soul-searching has occurred at all levels of the pork industry's governance. At the 2002 Pork Industry Forum, the official business meeting of the National Pork Board, delegates voted to reduce the mandatory rate from 45¢/$100 market value to 40¢.
Discussions about the mandatory checkoff rate continued, however. Some argue that the industry and the challenges it faces have changed so dramatically since the inception of the mandatory checkoff that the funds would be better spent on matters of public policy and regulatory issues. By law, however, funds collected under the Pork Act cannot be used for lobbying or advocacy initiatives.
The compromise, proposed through resolutions at some state meetings, is to lower the mandatory checkoff rate further and encourage producers to reallocate those funds to a voluntary contribution program such as the Producer Consent program managed by the National Pork Producers Council (NPPC), the industry's advocacy organization.
Minnesota delegates passed a resolution calling for the mandatory rate to be reduced to 35¢. However, producers in three other states supported resolutions calling for the rate to be dropped to “0” — thereby eliminating the mandatory program and paving the way for voluntary contributions to unrestricted funds, such as the Producer Consent program.
File Your Opinions
Regardless of the decisions that could come from the judicial system, it is apparent that priorities differ amongst producers and states. When state delegates meet in Dallas on March 6-8, it is imperative that they clearly understand your wishes. If you don't know your state delegates or how to contact them, call your state pork producer association office or the National Pork Board (800-456-7675). If you can't find the information you need, call me, and I'll help you find it.
The activities of the past 24 months have positioned the U.S. pork industry at the cusp of another defining moment. It is essential that all pork producers consider the impact a change in the checkoff rate will have on industry research, education and promotion programs. Take stock. Think through the best- and worst-case scenarios these actions will have.
The decisions made at this year's Pork Forum could shape the U.S. pork industry for the next decade or two. This is a defining moment. Do not squander it.