In mid-September, state pork producer delegates met in a special session and gave near-unanimous approval to a new voluntary checkoff program. Meeting in the nation's Capitol, state representatives were called to act on a resolution tabled during the National Pork Producers Council annual meeting in Reno last March.
Delegates had chosen not to act on the Voluntary Investment Program (VIP) at the annual meeting, noting they wanted the proposal to receive ample study and discussion at state association meetings this summer, before making a final decision. Annual meeting delegates had set an Oct. 1, 1998, deadline for action on the resolution.
The primary driving force behind the VIP proposal was the need to develop necessary funds to address a constant barrage of pressure in recent years by local, state and federal lawmakers, regulators and environmental authorities. Legislative checkoff funds (.0045% of value on all market hogs, feeder pigs and breeding stock) cannot be used to represent pork producer views in public policy issues or in legal counsel representation. The proposed VIP funds, like other non-checkoff funds generated by state and NPPC efforts, can be used for such purposes.
The special delegate session was called to meet in conjunction with NPPC's annual legislative seminar held each September and to meet the Oct. 1 deadline.
Key Points Of Voluntary Checkoff The key points in the resolution before the delegates was whether NPPC should establish a voluntary checkoff program in conjunction with the state associations:
The checkoff rate would be 5 cents per market hog or sow collected at the point of sale.
The VIP revenue would be split equally between NPPC and the states.
The Packer Processor Industry Council (PPIC) would be strongly urged to establish a similar VIP contribution at half the producer rate or 211/42 cents on all market hogs or sows and/or the processed product equivalent. All PPIC funds would go to NPPC.
Minnesota delegate Jim Quackenbush asked for confirmation that the accounting procedures could/would track where the dollars are generated, from which states.
"It seems to me that part of the need for this program is to move dollars from some of the larger states, where they are generated, to those states that have the need but can't generate the dollars," Quackenbush noted. "If we have areas of the country that do not totally support this program, will that affect their allocation when they come back to NPPC to request dollars to help with their battles?"
The "pay-to-play" question remained unanswered. Delegates were told VIP fund allocation will be assigned to an NPPC governance committee that will oversee the funds and the issues targeted. NPPC will proceed to refine those details now that the resolution received delegate endorsement.
The resolution passed pretty much unscathed except for an amendment offered by Illinois delegate Rich Brauer. He amended the resolution as follows: "The voluntary investment program will be evaluated by the NPPC voting delegates at the conclusion of the fifth year of its existence to determine if it has been successful in meeting the original goals and to determine if the program should be continued."
What amounted to a "sunset clause" on the delegates' endorsement, Brauer suggested the clause could serve as a good review point for the program and perhaps revisit whether the 50-50 split was the best allocation of funds.
The resolution passed and became a part of the final resolution passed by the delegate body.
What Next? The target, start-up date for the voluntary investment program is Jan. 1, 1999. If 100% participation is realized, an estimated $4.8 million would be collected. However, NPPC conservatively projected a 28% participation in VIP or roughly $1.4 million.
Using the 50-50 split prescribed in the resolution, $700,000 will be returned to the states, $700,000 will be retained by NPPC. Administration and collection fees will be borne by NPPC, estimated at 9%, leaving them $580,000 for program spending.
The projected VIP spending plan for the NPPC portion breaks down as follows:
40% for public awareness/education effort, including research public concerns about pork production; develop media programs to improve public understanding of modern pork production practices.
24% for trade policy/market access issues including expanding export markets while protecting well-established pork markets.
16% for environmental policy development, legal and specialist assistance to direct outcome of EPA regulations and guidelines.
12% for general state assistance including legal assistance for state and local issues, public policy education for producers and expansion of public policy efforts in Washington, DC, and state legislatures.
8% targeted for food safety issues, encouraging more pork producer input in the regulatory process, including the impact of on-farm regulatory programs.
Now that the VIP resolution has passed, NPPC will refine and implement allocation procedures through existing producer program committees and the NPPC Budget Committee. Ultimately, however, the NPPC delegate body and the organization's board of directors will guide the allocation of VIP funds.
At the state level, pork producer associations, through their delegate bodies, standing committees, and board of directors will determine how their share of the funds will be spent.
This is not an "implied consent" program as previously discussed at the annual business meeting. Rather, each pork producer will receive a consent form at the point of sale. If the producer voluntarily signs the form to participate in VIP, the packer or marketing firm will deduct a nickel per market hog or sow and send it to NPPC. And NPPC will, in turn, forward 211/42 cents/hog or sow to the producer's state association.
Without a signed VIP Consent Form, no funds will be checked off. Since the program is completely voluntary, no provisions will be made for checkoff refunds.
The current legislative checkoff remains intact. Those funds cannot be used to address public policy issues.
The next step is to develop materials to explain the VIP program to all pork producers.
NPPC staff will meet with packer representatives to outline program, establish collection and program management procedures.