Checkoff laws enable twisted relationship

Kate Clabby

I first learned about checkoff programs when I encountered radio ads discouraging people from drinking unpasteurized (raw) milk, sponsored by an organization called DairyMax. It didn’t surprise me. Raw milk is a specialty product, and farmers in Texas are only allowed to sell it directly to consumers. It makes sense that the industrial dairy industry would oppose it.

But what exactly was DairyMax? As it turns out, it’s a nonprofit organization funded by mandatory contributions from all dairy farmers in Texas, New Mexico, Oklahoma and part of Kansas. The national dairy checkoff program requires dairy farmers to pay $.15 for every 100 lbs of milk that they sell. $.05 goes to the National Dairy Board and $.10 goes to regional organizations, such as DairyMax.

Many Texas farmers pay checkoff fees. Beef producers pay into a fund managed by the Texas Beef Council. Cotton producers pay into the national Cotton Research and Promotion Program. Pork producers pay into the national pork checkoff program, managed by the National Pork Board.

The relationship between government and checkoff programs is twisted. A checkoff fee is not a tax, and it is not collected by the government directly. It is mandated by law, and farmers who don’t pay are subject to legal penalties. National checkoff programs are overseen by the USDA. In 2005, when some beef producers challenged the constitutionality of a mandatory checkoff fee, the Supreme Court upheld the law, claiming that the checkoff fee funded “government speech,” not “private speech.”

Checkoff fees are used to increase the demand for generic commodity foods. Campaigns like “Got Milk?” “Pork: The Other White Meat,” and “Beef: It’s What’s For Dinner” have all been funded by checkoff dollars. What are some of DairyMax’s current priorities? Getting lactose-intolerant people to drink more milk and ensuring that flavored (e.g. chocolate) milk stays in cafeterias. They also fund nutrition education campaigns, that, not surprisingly, emphasize the importance of dairy products. Some of the National Dairy Council’s recent accomplishments? Working with Domino’s to develop a pizza that uses 40 percent more cheese and working with McDonald’s to develop burger options that use two slices of cheese instead of one.

It makes absolute sense that dairy producers do everything they can to sell more milk. What I’m having trouble understanding is why the government has taken it upon itself to secure advertising dollars for them.

This is especially true when some of the farmers that are required by law to pay into the checkoff program may actually be hurt by it. DairyMax, the organization that put out ads discouraging the consumption of raw milk, is funded by all Texas dairy farmers — including raw milk farmers. They discontinued these ads after receiving complaints from the Farm and Ranch Freedom Alliance, but it’s fair to say that most of their efforts, which push products such as lactose-free milk and industrially-produced cheese, do not help small-scale dairies that sell directly to the consumer.

The reason checkoff programs exist is because farmers who produce commodity products, such as industrial milk, would have a hard time differentiating their particular milk over any other milk at the grocery store. But many small dairy producers, like small meat and vegetable producers, build their business by doing exactly that. They don’t participate in the commodity dairy market. It’s absurd that they have to pay into a fund devoted to expanding it.

Although it’s theoretically illegal for DairyMax to lobby, the line between lobbying and “education” is thin. They have called anti-raw milk ads “public service announcements.” But these “announcements” went on air just after HB 75, a bill that would make raw milk more accessible in Texas, was filed. The bill is currently stalled in committee.

Our government is charged to act with our best interests in mind. It is not in our best interest to see more ads every day. It is not in our best interest to hear distorted nutrition information and it is not in our best interest to eat a McDonald’s hamburger with an extra slice of cheese.

Proponents of checkoff laws argue that if contribution was not mandatory, commodity groups would suffer from the free rider problem: Farmers who did not contribute to their programs would still benefit from them, giving them no incentive to pay. The free rider problem is real, and every other interest group finds ways to deal with it without legally enforced donations. Commodity groups can follow their lead. If they end up smaller and less powerful, all the better. The government has no business securing advertising dollars for industrial food.