WASHINGTON -- Commodities groups hailed the U.S. Supreme Court's decision supporting the Beef Checkoff program as a major victory with positive implications for their own court battles.
The court recently ruled that U.S. beef producers must all help fund the Checkoff instituted by the 1985 Farm Bill, whether or not they agree with advertising funded by the program.
"We're elated for the industry," said John Braly, vice president, industry and member services, for the National Cattlemen's Beef Association, a Denver-based commodities group supported by the Beef Checkoff. "This program benefits cattle producers across the U.S., and now we know that we'll be able to continue working on our demand-building programs."
Braly added that NCBA "feels strongly" that demand for beef, up about 25% since 1998, has been driven higher through marketing efforts supported by Beef Checkoff funding.
Other groups expressed similar sentiments. "We view this ruling as a victory for all commodities programs, including the Pork Checkoff program," said Cindy Cunningham, assistant vice president of communications for the National Pork Board, Des Moines, Iowa. The group has a similar case pending before the U.S. Supreme Court.
"We're not sure that the court will apply exactly the same decision to our case, but we do think that this is a very important step," Cunningham added.
The Florida Department of Citrus also has a case pending in the Florida State Supreme Court over the varied "box taxes" it assesses on crates of citrus fruits produced by state growers. Andy Taylor, chairman of the Florida Citrus Commission, described the Beef Checkoff ruling as "extremely favorable."
"I don't think the [U.S. Supreme Court] justices could have written a clearer, more compelling argument for our case," he said. "It will also impact litigation that has taken place across the country against a number of commodities groups."
The decision represented a turnaround for the Supreme Court, which ruled against the Mushroom Council, Dublin, Calif., in a similar 2001 case. The Supreme Court then drew from decisions made in earlier court battles involving the "compelled speech" of labor unions and bar associations. Those earlier rulings established that members of such private-sector groups can withhold membership dues if they don't support a particular line of advocacy, and the Supreme Court decided that, on the same grounds, growers who didn't want to support the Mushroom Council couldn't be forced to. A similar court decision in 2003 later choked off funding for the Washington Apple Commission.
However, the checkoff programs and box taxes that benefit many commodities groups, including the NCBA, the FDOC and the NPB, are programs established by state and federal governments. As a result, the court this time decided that the Mushroom Council case could raise a problematic question. Namely, if a grower now had the right to withhold money from a government-appointed program because he disagreed with the marketing message paid for by the funds, could a private citizen say he was similarly entitled to withhold personal taxes from the government because he disagrees with its policies?
"Citizens may challenge compelled support of private speech [such as the advocacy of unions and bar associations], but have no First Amendment right not to fund government speech," the court's final opinion read.
The FDOC has taken a similar line of argument for the box-tax case, according to Taylor. "The principles of government speech are one of the foundations of the arguments that the FDOC has made in the box-tax case," he said. "We will be filing the appropriate motions to put the court on formal notice of this landmark decision."
Although the ruling may stem the tide of legal battles that have faced various commodities groups during the past decade, the controversies that brought the cases to court are not likely to dissipate.
While commodity board programs generally benefit supermarket retailers with specialized promotions, national advertising campaigns, research and category management advice, some growers and ranchers contend that these efforts are too generic and do little to help individual producers.
Many producers of Angus or Hereford beef, for example, say that generic advertising such as the NCBA's "Beef: It's What's for Dinner" campaigns overshadow their own efforts to market their products as unique. In Florida, the six growers that have argued against the FDOC's box tax say that the department's advertising and research efforts also benefit Brazilian, Mexican and Caribbean imports, which, of course, aren't subject to the box tax.
Taylor said that this was a valid point, but argued that the six growers who filed the lawsuit against the FDOC were in the minority. "The import market does reduce the value of the advertising," he said. "But, independent research indicates there is still a benefit of $2 to $4 back to the grower for every $1 invested in advertising. That's why the vast majority of growers support it."