Order Code 95-353 ENR
Updated March 25, 2004
CRS Report for Congress
Received through the CRS Web
Federal Farm Promotion (“Check-Off”)
Programs
Geoffrey S. Becker
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Summary
Over the past 35 years Congress has enacted laws authorizing generic promotion
(“check-off”) programs for various farm products. Supporters view them as self-help
activities demanding minimal government involvement and cost. Producers and, often,
importers are required to pay an assessment, usually deducted from revenue at time of
sale — thus the name check-off. However, some farmers contend they are being “taxed”
for advertising and related activities they would not underwrite voluntarily, and have
challenged the constitutionality of the programs in federal courts, with some successes
— making the programs’ future unclear. This report will be updated if events warrant.
Over the past 35 years, Congress has enacted laws authorizing national generic
promotion (“check-off”) programs for various farm commodities.1 Interest in new check-
off programs increased during the 1980s and 1990s, as various commodity groups sought
new methods of support for their products. These programs are viewed as farmer self-
help activities requiring minimal federal involvement or funding. USDA’s Agricultural
Marketing Service (AMS) has some administrative and oversight responsibilities, but the
producer boards who run the programs reimburse the agency for such costs.
Federally sanctioned programs collected assessments for 16 commodities: avocados
(implemented in 2003; $12.8 million collected in the first nine months), beef ($45.9
million collected in 2003), blueberries ($1.2 million in 2003), cotton ($61 million),
dairy products ($86.2 million), eggs ($18 million), fluid milk ($105.8 million), honey
($3.3 million), lamb ($2.7 million), mushrooms ($1.8 million), peanuts ($7.6 million),
popcorn ($600,000), pork ($43.1 million), potatoes ($8.5 million), soybeans ($36.2
1 This report focuses on free-standing generic promotion programs; it generally does not cover
similar promotion activities linked to marketing orders authorized by the Agricultural Marketing
Agreement Act of 1937 as amended. See CRS Report RS20512, Federal Marketing Orders for
Fruits, Vegetables, and Specialty Crops. For a fact sheet on promotion programs and their
requirements, congressional requesters may contact USDA at 720-3203.
Congressional Research Service ˜ The Library of Congress

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million), and watermelons ($1.3 million).2 Other check-offs have been authorized by
Congress but either were not implemented or were terminated by producers in referenda
(e.g., for wheat, flowers, limes, sheep, and pecans).

Title V of the Federal Agricultural Improvement and Reform Act of 1996 (P.L. 104-
127) gave USDA broad-based authority to establish national generic promotion and
research programs for virtually any commodity, either at its own initiative or upon the
request of an industry group, without waiting for specific legislative authority. Prior to
the 1996 law, a check-off necessitated passage of specific authority for an individual
commodity — a route that some producer groups still follow. For example, the Hass
Avocado Promotion, Research, and Information Act of 2000, signed into law on October
23, 2000, explicitly authorized the program that took effect September 9, 2002.
Rationale
Many billions of dollars are spent annually on “branded” U.S. food advertising and
promotion, where one producer pits its name brand against the names of others offering
a similar or substitute product. Perdue chicken and Tropicana orange juice commercials
are examples of branded advertising. Generic ads, on the other hand, have no connection
to the name of a specific producer. Because producers of a basic agricultural product
cannot easily convince consumers to choose a particular egg or potato over another,
generic advertising can help to expand total demand for the product, it is argued. Generic
advertising also uses television, radio, and other media to reach consumers. The Beef: It’s
What’s for Dinner, and milk mustache ads are examples. The programs also seek to
expand foreign markets and to fund research and education, such as development of new
or improved products or surveys of consumer behavior.
Producers can and do organize voluntary check-offs, but they account for only a
small share of all funding for generic efforts. Since the prototype Florida Citrus
Advertising Tax was instituted in 1935, hundreds of mandatory farm commodity
promotion programs have been legislated by states or the federal government. Nine out
of 10 U.S. farmers were contributing to one or more of these efforts by the mid-1990s.3
Numerous commodity groups prefer mandatory check-offs as a way to address the
so-called “free rider” problem — nonpaying producers who benefit economically from
programs that others have funded. Requests to Congress or USDA to authorize
mandatory check-offs have been prompted by various factors, including the search for
new ways to stimulate product demand, particularly as farm markets have globalized.
Increasing foreign competition has caused U.S. producers to seek more money — from
both public and private sources — to promote food and agricultural sales in other
countries. Also, a belief that voluntary efforts have been ineffective, and the perceived
successes of existing mandatory check-offs, may contribute to interest in new programs.
2 Source: USDA Budget Explanatory Notes for FY2005. Reflects amounts that go to national
boards. Some programs collect additional sums but return them for state-level activities.
3 Armbruster, Walter J., and John P. Nichols. Commodity Promotion Policy. 1995 Farm Bill
Policy Options and Consequences, Texas A&M University, October 1994.

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Legal Challenges
Even as new check-offs are being considered, some producers are vigorously (and
in some cases, successfully) challenging existing programs, creating future uncertainties
for all check-offs. These producers contend that the check-off is a “tax” to fund
advertising and other activities they would not pay for voluntarily. Numerous producer
lawsuits have questioned the constitutionality of generic check-off programs. Two cases
have reached the U.S. Supreme Court, with quite different results.
In Glickman v. Wileman Brothers and Elliot, Inc., California peach and nectarine
handlers challenged the USDA marketing order, which is not only a promotion program
but also sets quality standards and other marketing rules for those fruits (see footnote on
page 1). The 9th Circuit Court of Appeals had held that the order mandating the
assessments violated the affected parties’ First Amendment rights and therefore was
unconstitutional. The Circuit Court stated that such generic advertising had not been
proven necessary or more successful than individual advertising, and also, in effect,
violated the free speech of growers who would prefer to use their money to advertise in
other ways. The government appealed the case to the Supreme Court, which on June 25,
1997, reversed, by a 5-4 vote, the lower court’s ruling. It found that the program “should
enjoy the same strong presumption of validity that we accord to other policy judgments
made by Congress. The mere fact that one or more producers ‘do not wish to foster’
generic advertising of their product is not a sufficient reason for overriding the judgment
of the majority of market participants, bureaucrats, and legislators who have concluded
that such programs are beneficial.”4
However, on June 25, 2001, the Supreme Court, in United States v. United Foods,
Inc., ruled, by a 6-3 vote, that mandatory assessments for the mushroom check-off were
a violation of the First Amendment and therefore are unconstitutional because they force
producers to pay for commercial speech. Upholding a decision by the 6th Circuit Court
of Appeals, the Supreme Court reasoned that the program authorized by the Mushroom
Promotion Act differs fundamentally from that under Glickman. The court said that the
mushroom check-off is a stand-alone program that is not part of a broader regulatory
scheme, as was the marketing order for peaches and nectarines.
In Glickman the mandated assessments for speech were ancillary to a more
comprehensive program restricting marketing autonomy. Here, for all practical
purposes, the advertising itself, far from being ancillary, is the principal object of the
regulatory scheme.... Beyond the collection and disbursement of advertising funds
there are no marketing orders that regulate how mushrooms may be produced and
sold, no exemption from the antitrust laws, and nothing preventing individual
producers from making their own marketing decisions.5
4 Glickman v. Wileman Bros. & Elliot, Inc. 521 U.S. 457, 477 (1997).
5 United States v. United Foods, Inc. 533 U.S. 405, 412 (2001). Since the Court’s decision, the
Mushroom Council, the producer board that administers the program, in 2001 reduced the
mandatory assessments and diverted their revenue to non-promotional activities. The Council
began soliciting voluntary contributions to use for generic advertising.

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Legal experts who have studied the two cases generally agree that stand-alone check-
offs (those covered in this report) are likely more vulnerable to challenges than promotion
that is part of a marketing order authorized by the Agricultural Marketing Agreement Act
of 1937. However, these experts also conclude that the Supreme Court did not
specifically prescribe what level of regulation is needed to provide protection against such
challenges. Another issue not addressed by the Supreme Court’s mushroom ruling was
whether the speech compelled under the check-offs could be deemed “government
speech,” which might be more likely to pass Constitutional muster, these experts noted.
The 2001 Supreme Court decision has influenced other lawsuits. On June 21, 2002,
a U.S. District Court in South Dakota ruled, in Livestock Marketing Association v. United
States Department of Agriculture, that the national beef check-off also violates the First
Amendment by forcing producers “to pay, in part, for speech to which the plaintiffs
object.” The court further ruled that the generic advertising conducted under the Beef
Promotion and Research Act and the ensuing Beef Order is not government speech. On
October 17, 2003, the 8th Circuit Court of Appeals announced that it would not reconsider
the District court’s ruling.
In another case, on October 25, 2002, a federal judge ruled, in Michigan Pork
Producers v. Campaign for Family Farms v. Ann Veneman, that the pork check-off also
is unconstitutional because it violates complainants’ rights of free speech and association.
The judge made reference to the United Foods decision. On October 22, 2003, a three-
judge panel of the Sixth Circuit Court of Appeals agreed with the lower court’s ruling.
However, on November 1, 2002, a district judge in Montana ruled, in Jeanne Charter and
Steve Charter v. USDA, that the speech compelled under the beef check-off law
“constitutes support for government speech” and “does not violate the rights of free
speech or association.” The U.S. Justice Department, defending the beef and pork check-
offs, has asked the U.S. Supreme Court to consider both the South Dakota and Michigan
cases. Ultimately, Congress might be asked to re-examine their statutory basis.6
Producer Referendums
Dissident industry groups also have worked outside of the courts, usually by seeking
producer referendums where they hope to win enough votes to terminate the programs.
Most of the current check-offs contain provisions enabling USDA, the promotion boards
and/or a minority of producers to petition for a vote on whether to terminate the program.
The 1996 farm law providing USDA with standing check-off authority permits new
programs to start with either delayed or prior referendums, but they also must have
periodic referendums in later years to test continued support.
Legislation creating the dairy, beef, and pork programs in the 1980s stipulated that
they were to operate for a prescribed period before referendums on whether to continue
6 More analysis of the check-offs is in the July-August 2001 and September-October 2003 issues
of The Agricultural Law Letter published (at [http://www.agriculturelaw.com]) by the law office
of McLeod, Watkinson, & Miller, which has assisted groups to establish check-offs; and in
Promotion Checkoffs, Why So Controversial? The Evolution of Generic Advertising Battles
(September 2001) by John M. Crespi, Cornell University National Institute for Commodity
Promotion Research and Evaluation.

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them could be held. In each of these cases, producers did vote to continue them.
However, producers rejected pecan, lime, and flower programs in delayed referendums.
Proponents of delayed (as opposed to up-front) referendums say the trial period gives
producers experience with the program; opponents contend that they are undemocratic
and allow for, at best, a subjective evaluation of benefits.
The Livestock Marketing Association in 1999 submitted a petition to USDA seeking
a referendum on whether the beef check-off should be discontinued. USDA rejected the
petition in early 2001 after determining that the number of signatures fell short of the
108,000 signatures or 10% of all producers required to institute the referendum.
In another high-profile case, USDA in late 2000 held a non-binding referendum on
whether to continue the pork check-off at the behest of several producer groups led by the
Campaign for Family Farms. The groups prevailed, by about 1,500 producer votes, to
end the program, but the National Pork Producers Council (NPPC) subsequently won a
temporary restraining order to prevent USDA from publishing a final termination rule.
A February 2001 settlement agreement was reached, whereby the check-off would
continue with modifications, including assurances that the check-off board would operate
independently of NPPC and be more responsive to producers’ concerns about its
activities.
Other Considerations
Government Role and Oversight. Once a program is authorized and requested
by an industry group, AMS works with the group on start-up and operating details,
prepares formal regulations, and holds a producer referendum. The Secretary of
Agriculture appoints members for the check-off boards, based on industry nominations.
AMS has the responsibility for approving board budgets, plans, projects, and contracts.
AMS among other things has published oversight guidelines aimed at ensuring that the
boards — which function as the programs’ governing and managing bodies — meet all
legislative, regulatory, and Departmental policy requirements.
However, some producers, importers, and the Department’s Inspector General have
contended that AMS’s oversight has been weak. These critics have charged that producer
dollars often have been spent on lavish entertainment of clients or on other activities they
consider inappropriate — and that the agency had done little to constrain such spending.
AMS and the check-off boards have countered that most funds are properly spent, and,
moreover, that Congress specifically intended for these programs to be producer-run, with
minimal USDA interference. Other than ensuring the legality of program activities, it is
not government’s role to second-guess a producer-elected board’s business decisions,
even if, in retrospect, they appear to be ill-advised, it has been argued. In fact, when
AMS has challenged a board’s activities, producers at times have asked Members of
Congress to intervene against the Department.
Program Effectiveness. Economists have been engaged in research on this
question. Studies of advertising for specific dairy, citrus, and several other products have
generally found a positive relationship between the amount of money invested in generic
advertising and sales of the advertised commodity, although the “law of diminishing
returns” may apply — that is, as advertising expenditures increase, sales do increase, but

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at a slower rate. Ten years ago, Forker and Ward generally confirmed these conclusions,
and cautioned that “producer welfare” might not improve in all instances, also noting:
The magnitude of [producer] benefits [if any] depends on the level of advertising
investment, the nature of other kinds of promotion programs associated with it, the
nature and extent of the research effort, the quality of the advertising and promotion
effort, the nature of the commodity, and the extent to which consumers and producers
respond.7
Economists widely believe that program evaluation should be an integral part of any
generic commodity promotion activity. The 1996 farm law requires an independent
evaluation, at least every five years, of the effectiveness of each established program.
Advertising Versus Advocacy. Virtually all federal promotion laws contain a
prohibition against using assessments “in any manner...for the purpose of influencing
governmental policy or action.” However, some critics regard the distinction between
selling a product to consumers and promoting it politically to lawmakers as a narrow one,
particularly as check-off funding raises a particular commodity’s national visibility. This
policy question is further complicated if a national check-off program staff is housed in
the same offices as that commodity’s trade association, or where the trade association
receives contracts from the check-off board to carry out some “permitted” activities.
Commodity “Cannibalism”. As more check-offs are added, at what point are
commodity groups simply chasing the same consumer dollars — particularly in the
United States, where total per capita food consumption is not likely to grow? For
example, if one promotion convinces consumers to eat more beef and pork, will they eat
less fish or chicken?
Industry Representation. Mandatory programs must be carefully designed to
ensure that all contributing producers benefit equitably. One key is board composition.
How are representatives chosen? Will the boards represent all geographical production
areas and all types of producers, including minority, limited resource, or other potentially
disadvantaged producers? These questions have become more pertinent as agriculture,
and the food industry it serves, both experience major structural changes — e.g., vertical
coordination has enabled end sellers to create more unique brand-name products from
what was once a largely homogeneous commodity. A related policy question is how to
treat importers of affected commodities, particularly as agricultural markets shift from
primarily domestic to global ones. Increasingly, importers are being required to pay
assessments, but also are being given seats on governing boards.
7 Forker, Olan D., and Ronald W. Ward. Commodity Advertising: The Economics and
Measurement of Generic Programs. Lexington Books, New York, 1993. A more recent broad
look at the federal check-offs has been under way, said an expert at Cornell University’s National
Institute for Commodity Promotion Research and Evaluation, who speculated that the Forker-
Ward conclusions likely are still relevant.

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