Checkoff Programs – An Overview

Background

Checkoff programs – also referred to as research and promotion programs – promote and provide research and information for a particular agricultural commodity without reference to specific producers or brands. The term “checkoff” is derived from historical programs that were not mandatory; producers marked a checkoff box if they wished to contribute to the program. Mandatory programs do not have such forms, but the name has remained. Producers and handlers usually finance these programs from assessments charged on a per unit basis of the marketed commodity. Federal checkoff programs are authorized and operated by federal statute by commodity program. State checkoff programs may also exist, authorized by state legislation, to promote and market products within the state. Checkoff programs attempt to improve the market position of the covered commodity by expanding markets, increasing demand, and developing new uses and markets.


Challenges

Checkoff programs have been challenged in court on several occasions. Challengers argue that the requirement that they pay mandatory assessments in accordance with a checkoff program unlawfully forces them to pay for speech that they do not support. In its first opportunity to hear the issue, the U.S. Supreme Court ruled that assessments for promotion that were part of a broader regulatory framework included in a marketing order were legal and did not violate the First Amendment. In a later decision, the Court decided that assessments for a generic mushroom promotion program violated the First Amendment because they were directed primarily at generic advertising that some producers did not support.  In a third checkoff decision, the Court determined advertisements promoting beef as a generic commodity were government speech, thus not susceptible to First Amendment compelled-subsidy challenges.  The Court did, however, hold open the possibility that the beef checkoff program could be unconstitutional if it is shown that the advertisements are attributable to individual producers who disagree with the message.

These decisions have led to splits among circuit courts of appeal and district courts. Similar battles have taken place in state courts challenging state checkoff programs. The checkoff programs continue to be scrutinized.