Dateline: July 11, 2002

Cattle raisers working to keep beef checkoff

FORT WORTH- Texas and Southwestern Cattle Raisers Association has asked the U.S. Justice Department to seek a stay of a district court injunction that would terminate collection of the beef checkoff effective July 15.

The injunction was issued following a June 21 ruling by South Dakota Federal District Court Judge Charles B. Kornmann that the Beef Promotion and Research Act and checkoff “are unconstitutional and unenforceable” because they violate the First Amendment of the U.S. Constitution.

“It is imperative that the Department of Justice work quickly to request the Eighth Circuit Court of Appeals to grant a stay in this case pending appeal, and if possible to seek an expedited appeal of this decision,” TSCRA President John Dudley told U.S. Solicitor General Theodore B. Olson.

“Although the decision issued by the federal district court applies only to the beef program, it increases the threat to all similar initiatives by other industries such as cotton, soybean, honey, and dairy programs,” Dudley said.

Dudley explained that the majority of TSCRA members have small and midsize operations.

“These businesses are not large enough to advertise their own products,” he pointed out, “but by joining together with other cattlemen, they can enhance demand for their own products.

“The loss of these programs would be a huge blow to the livelihoods of thousands of family farms and ranches and add to the economic challenges facing rural America.”

Established as part of the 1985 Farm Bill, the checkoff assesses $1 per head on the sale of live domestic and imported cattle and a comparable assessment on imported beef and beef products.

The assessment became mandatory when the program was approved by 79 percent of producers in a 1988 referendum vote.  Since then, support for the program has remained above 60 percent, according to producer attitude surveys by three different companies independent of the industry.

States retain up to 50 cents on the dollar and forward the other 50 cents per head to the Cattlemen’s Beef Promotion and Research Board, which oversees the national program, subject to USDA oversight.  Checkoff revenues may be used for promotion, education, and research programs to improve the marketing climate for beef.

Termination of checkoff collections threatens funding for critical research on preventing E-coli and other food borne bacteria, demand-building promotions such as the Beef, It’s What’s for Dinner ads, and Beef Quality Assurance programs nationwide, to name a few.

The free Texas Beef Quality Program education programs conducted by TSCRA are partially funded through checkoff funds received from the Texas Beef Council.

The challenge to the beef checkoff’s constitutionality was raised by the Livestock Marketing Association, the Western Organization of Resource Councils and several individual producers.

Defendants in the case are the U.S. Department of Agriculture, the Cattlemen’s Beef Promotion and Research Board, which administers the checkoff, and the Nebraska Cattlemen, Inc., which is leading a group of supportive producers who have intervened on behalf of the defendants.

Citing producer unrest over the direction and administration of the beef checkoff, the Livestock Marketing Association initially sought a producer referendum on whether the program should continue.  In 1998, the group began a drive to collect the signatures (10 percent of eligible producers) required to call a referendum.

In November 1999, LMA submitted 126,000 signatures to USDA. In December 2000, with the signatures not yet validated, LMA filed a lawsuit in a South Dakota federal district court to compel USDA to immediately order a referendum.  The lawsuit also challenged the use of “producers communication funds” to promote the checkoff program.

In January 2001, following verification of the signatures by PricewaterhouseCoopers, a private accounting firm, then Secretary of Agriculture Dan Glickman announced that there were insufficient valid signatures and declined to order the referendum.

The lawsuit was still pending and took a drastic change of course when the U.S. Supreme Court ruled in June 2001 that the mushroom checkoff is unconstitutional under the First Amendment.

In August 2001, LMA and other plaintiffs filed an amended complaint, asking the federal district court to declare the beef checkoff unconstitutional because it violates producers’ First Amendment rights to freedom of speech and association.

“We are extremely disappointed with Judge Kornmann’s decision and its severity,” TSRCA Executive Vice President Matt Brockman told media representatives.

“We expect USDA and the Justice Department to appeal and hope a stay will be issued on the injunction on collection of fees.  The program should be able to continue during appeal process.”

Brockman said it was possible that the case would go all the way to the U.S. Supreme Court and noted that prior attempts to undermine the constitutionality of the beef checkoff have failed.

“The beef checkoff has proven over the years to expand consumption of beef both domestically and in other countries.  Today, more than ever, consumers know more about the nutritional benefits, convenience and ease of preparation of beef.

“It would be disastrous not to have this very effective program!”