USDA Settles Pork Spat, Checkoff Continues

March 1, 2001

USDA has announced a settlement with the National Pork Producers Council (NPPC) and the Michigan Pork Producer Association that will continue the pork checkoff program. Under the settlement, certain program restructuring is required. The changes, effective immediately, will ensure the separation of the National Pork Board and the NPPC and make the program more responsive to concerns of pork producers, according to USDA.

The restructuring requires the National Pork Board to employ its own management and staff, including the chief executive officer and chief financial officer; manage separate contracts for promotion, research, and consumer information projects; maintain separate office operations from the NPPC and maintain separate communications from the NPPC.

Under the agreement, state pork producer associations will continue to operate independently and be accountable for checkoff funds but may cooperate on projects and communications with state affiliate organizations of the National Pork Producers Council. The Pork Board will have approximately two years to demonstrate to producers and importers the value of the checkoff program to the industry.

USDA will conduct a survey by June 2003 to determine whether 15% of producers and importers are in favor of conducting a referendum to decide continuation of the checkoff program. If the required number of producers and importers request a referendum, the referendum would then be held within one year.

Additional information about the settlement and related issues is available at http://www.ams.usda.gov/lsg/mpb/pork.htm.

The Michigan Pork Producers Association (MPPA) "enthusiastically supports" the settlement. "We sought an injunction, in January, contending that USDA had no legal authority to conduct a binding referendum. Moreover, the USDA's referendum was filled with irregularities and failed to apply consistent standards," said Pete Blauwiekel, Fowler, MI, pork producer. "Through this settlement, we have been able to help pork producers across the U.S. maintain their access to promotion, research and education funded by the checkoff. We believe that USDA's participation in the Settlement Agreement reflects their genuine concerns regarding the referendum and the way it was conducted."

He continued, "In Michigan there were nearly twice as many 'yes' votes as 'no' votes in the referendum. The reason we sought the injunction was to make sure that pork producers got a fair shake in the referendum. Without the checkoff, the future of pork production would have changed dramatically, especially in states like Michigan where there are already only a small number of pork producers. Without a unified organization who would have stood up for us?"

On Jan.12, the Michigan Pork Producers Association, independent pork producers and the National Pork Producers Council filed a lawsuit in the United States District Court, Western District of Michigan, seeking a temporary restraining order (TRO) and a preliminary injunction. These legal actions were intended to stop USDA from taking actions to terminate the mandatory pork checkoff.

Then on Jan. 19, the court granted a TRO, thereby blocking USDA from publishing or promulgating final rules while the order was in effect. In addition, the judge set a preliminary injunction hearing for Feb. 2. Subsequently, USDA requested a delay in the preliminary injunction hearing. The parties agreed to a delay until March 16.

A statement by the NPPC explained that the settlement agreement will require a distinct separation between NPPC and the National Pork Board -- and particularly checkoff-funded programming and non-checkoff-funded policy initiatives. As a result, NPPC's role as general contractor to implement checkoff-funded programs will be terminated. Thereafter, NPPC will focus on policy related legislative and regulatory issues.

These activities will be funded with only non-checkoff or unrestricted funds. In addition, the National Pork Board will be charged with the implementation of checkoff-funded promotion, consumer education and research initiatives. "NPPC has agreed to this settlement for a simple but extremely important reason. This settlement fulfills our overarching goal of continuing the highly effective pork checkoff for the benefit of every pork producer," the statement said.