CONTENTS

Glickman vs. Wileman - On the Doorstep of
The Supreme Court

USDA's Viewpoint

Editor's Notes

Director’s Corner

Next Meeting

USDA's Viewpoint

by Dr. Kenneth Clayton

The U.S. Department of Agriculture (USDA) has been involved in national research and promotion programs for agricultural commodities since their inception. As a matter of policy, USDA supports industry self-help initiatives, including research and promotion. USDA’s role in national research and promotion programs has been defined by Congress to be one of oversight. The challenge for USDA is to meet its oversight responsibilities while avoiding unnecessary or inappropriate micro-management of these programs.

With passage of the 1996 Farm Bill, Congress added significantly to the national research and promotion arena. Legislative authority was provided for three new programs, covering kiwifruit, canola, and popcorn. A new, generic statutory authority was established that will permit interested industries to work directly with USDA to initiate programs in the future. Last, but certainly not least, periodic evaluations are now required for all research and promotion programs.

All of the national research and promotion programs follow a similar outline. They are authorized to undertake the same types of activities, must be approved through referenda, and are managed by an industry board . . . to name just a few of the characteristics that they share in common. Even so, each industry that initiates a promotion program has a unique history. For example, a number of the current programs were preceded by state or regional promotion programs, the latter being accommodated in various ways when national programs were established. Perhaps more importantly, the experiences and expectations of industry members from across the country have shaped not only the initial designs but also the strategic directions and daily operations of the national programs.

Congress has made it clear that USDA should ensure that national research and promotion programs only conduct activities in the areas of research, promotion, consumer education, and industry information. USDA has also been given the responsibility to ensure that there is a full accounting of assessment funds. In this same context, the use of research and promotion program monies to influence government decision making is prohibited.

USDA policy has consistently held that in their promotion activities, agricultural commodity groups must not be disparaging of one another. In an era of comparative, often quite negative advertising, this policy has given rise to USDA intervention in planned promotion campaigns from time to time. Positioning on public policy issues by some promotion boards also has occasionally given rise to differences of view. Full page ads in major newspapers on sensitive or timely issues are argued by industry to be simply promoting the image of a commodity; however, such activities have been interpreted by others as attempts to influence government decision making.

One final area of oversight also deserves mention. Industries seeking national research and promotion programs sometimes fail to appreciate that such programs come with strings. There are statutory or policy limits on how assessment funds may be used. Accounting requirements are quite strict. Almost without exception, industries with pre-existing state or regional promotion programs, or industries with a dominant trade association that becomes the heir-apparent to manage a national promotion program, have adjustment problems in the early days of a new program. In those cases, USDA oversight often involves working with industry to create the necessary separation of program decisions and funds from other activities.

As part of the 1996 Farm Bill, Congress created generic legislative authority for future national research and promotion programs. Interested industries are now able to approach USDA directly to initiate a program, without having to first seek statutory authority from the Congress. This new generic authority offers a menu of provision regarding the scope, structure, and other features among which industries may choose in fashioning a program. USDA has already been contacted by several industry groups interested in pursuing programs under this new authority.

The 1996 Farm Bill also included a requirement that national research and promotion programs periodically evaluate their effectiveness. As the research and promotion boards consider this new requirement, the work of the National Institute for Commodity Promotion Research and Evaluation as well as that of NEC-63 should take on even greater significance.

From the research and promotion boards’ point of view, evaluation will be an opportunity to bring greater analytical strength to business planning, offer insight to those paying assessments as to the return on their investment, and provide a line of defense when programs come under legal challenge as to their effectiveness. For the research community, this new evaluation requirement represents both an opportunity and a responsibility. Methodological and data development issues must be addressed. Approaches to evaluation will have to be tailored to fit a diversity of programs; for example, smaller programs with limited budgets focusing their promotion on point-of-purchase literature may have to be evaluated differently than larger programs with major television campaigns. And, of course, results of econometric or statistical analyses must be put into usable form for industry boards.