Spotlight on Checkoff Programs

By Alex Kleinman (PO ’20)

Four years ago, Dutch scientist Mark Post created the first lab-grown hamburger. Following Post’s groundbreaking innovation, companies across Silicon Valley began developing milk without cows, eggs without chickens, and meat without animals. Studies have shown that plant-based and cultured animal products significantly reduce greenhouse gases, health risks, and animal suffering, all without compromising taste. As a result, conventional meat and dairy interests see the rise of cultured and plant-based food companies as a financial threat. Two years ago, tensions between food startups and traditional agricultural interests exploded in accusations that the American Egg Board (AEB), a government marketing program, had illegally used funds to undermine Hampton Creek, a plant-based food technology company. These allegations prompted Senator Lee of Utah (R) and Senator Booker of New Jersey (D) to introduce the Commodity Checkoff Improvement Act, which would prevent special interests from appropriating government funding for anti-competitive initiatives.

The AEB is one of many checkoff programs, which are responsible for conducting research and marketing campaigns that benefit whole agricultural industries. Some prominent checkoff program advertising campaigns include “Got Milk?”, “Beef: It’s What’s for Dinner,” “Pork. The Other White Meat”, and “The Incredible, Edible Egg.” Checkoff programs place a mandatory tax on producers of a given agricultural product and use the funds to research effective marketing strategies that promote an industry as whole, without preferential treatment to any particular corporation. According to the Commodity, Promotion, Research and Information Act of 1996, checkoff programs cannot use funds to lobby government officials or to undermine competitors.

A yearlong USDA investigation recently revealed that the AEB had conspired to undermine Hampton Creek. First, the AEB unsuccessfully lobbied the FDA to prohibit Hampton Creek from using the word “mayo” in their products. Subsequently, the AEB attempted to prevent Whole Foods from distributing Hampton Creek products. Lastly, the AEB paid prominent food bloggers to delegitimize Hampton Creek.

In response to the controversy between Hampton Creek and the AEB, Senator Booker and Senator Lee have introduced the Commodity Checkoff Improvement Act. Their bill prohibits checkoff programs from influencing government policy and engaging in anticompetitive activity. The Commodity Checkoff Improvement Act also requires checkoff programs to disclose budgets as well as the purpose, amount, and identity of the recipient of a disbursement. In order to enforce transparency, the Inspector General of the USDA must conduct an audit every three to five years.

The spotlight on checkoff programs has also reignited questions on whether compulsory participation violates the first amendment. In 2001, the Supreme Court ruled in United States v. United Foods, Inc. that mandated support in the mushroom checkoff program violated free speech. Justice Kennedy said, “We have not upheld compelled subsidies for speech in the context of a program where the principal object is speech itself.” However, three years later the Supreme Court upheld mandatory participation in beef checkoff programs in Johanns v. Livestock Marketing Association. Delivering the majority opinion, Antonin Scalia argued that mandatory checkoff funds were for government speech, not private speech.

With a renewed focus on checkoff programs, Senator Lee has sought to resolve this apparent legal contradiction by introducing the Voluntary Check-Off Program Participation Act, which would end taxes for producers who do not want to participate in the program. Both Senator Lee’s and Senator Booker’s policies are currently pending approval in the senate.

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