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Court delivers beef checkoff verdict: Guilty

By Alan Guebert

In America, you either vote or you go to court.

Sometimes, however, you vote, then go to court.

On rare occasions, you go to court and never vote.

Whatever the path, the outcome is always the same: Through law, the people rule.

That elegant Constitutional guarantee was reaffirmed June 21 when South Dakota Federal District Judge Charles B. Kornmann ruled the beef checkoff’s “entire Act and Order violate the First Amendment.” As such, he declared it “unconstitutional and unenforceable” and ordered $1-per-head checkoff collections to stop “as of the start of business July 15, 2002.”

In a lengthy opinion, the judge listed crystal clear reasons to kill the checkoff that has raised and spent more than $1 billion of cattlemen’s cash. But he was kind. Nowhere in the opinion did he mention the checkoff’s dismal record to lift cattle prices. From 1986, when beef checkoff money began flowing, through 2001, cattle prices averaged just $69.43, a dinky 4.5 percent growth over 16 years.

The case hinged on a simple legal question: Since the checkoff is mandated by federal law (it was part of the 1985 Farm Bill), are its programs “government speech,” which can fall outside the First Amendment’s free speech guarantees?

A review of checkoff material proved to Kornmann that “cattlemen run program,” is “producer-controlled” and is managed by an “independent board.” In short, he used the checkoff’s own public relations gas to roast it.

Then he basted it. “Common sense tells us the government is not ‘speaking’ in encouraging consumers to eat beef,” Kornmann wrote.

But common sense has been absent in the expensive, four-year battle run by the Cattlemen’s Beef Board, the National Cattlemen’s Beef Association and USDA to keep cattle producers from voting on the checkoff’s future. Thwarted the CBB, NCBA and USDA at every turn for an up-or-down checkoff vote, producers finally went to court. In the end, the law prevailed.

The decision makes federally-mandated checkoffs and USDA zero-for-two in federal court in just the last 12 months. On June 25, 2001, the U.S. Supreme Court killed the mushroom checkoff because that checkoff’s “mandated support is contrary to the First Amendment principles (of) persons who object to the speech” it funded.

Kornmann employed the Supreme Court’s sharp knife. Calling the payment of the $1-per-head checkoff “compelled dues,” he opined that the “use of compelled dues for advancing ideological causes objectionable to any members of the group violate the First Amendment.”

The “objectionable” speech was the checkoff’s

promotion of generic beef which, the five plaintiff-cattlemen complained, went against their grain because it also promoted imported beef. The judge agreed.

“I don’t disagree with the idea of a checkoff,” says Herman Schumacher, a South Dakota cattleman and auction barn owner who was one of the suit’s winning plaintiffs. “But this checkoff helps the importer, packer and the retailer make money, not me. I don’t sell beef; I sell cattle.”

Schumacher’s explanation holds the fundamental flaw of most agriculture checkoffs: Processors, wholesalers and retailers--highly industrialized, concentrated free riders in today’s agriculture--capture most of the increased profit a successful checkoff might deliver; tab-paying producers get a slap on the back. And today’s $62 cattle market is a kick in the pants.

The beef ruling carries two other kicks. First, the federally-chartered, non-refundable pork checkoff is now defending itself in a Michigan federal court. Although the South Dakota beef decision is not binding in the pork case, the U.S. Supreme Court’s mushroom decision is. As such, the Michigan federal judge has a ready-made spit to barbecue the pork checkoff, too. Odds now favor it being cooked by Christmas.

The second reality is really just that--reality. The times and circumstances that spawned most of today’s $1-billion-per-year commodity checkoffs are long gone. The checkoffs are going, too, because arrogant leadership failed to remember the basic American tenet that through the law, the people rule.

Soybean checkoff leaders, take note.