The Other Lawsuit

Pork producers are fighting in court to keep a $51.4 million marketing program that the U.S. Department of Agriculture wants to scrap.

Producers won a temporary injunction in January to keep the USDA from abolishing a 15-year-old checkoff program that funds the National Pork Board. A federal hearing was set for Feb. 2 to consider whether the USDA has the authority to kill the program, which brought in $54 million last year and is budgeted at $51.4 million this year. Pork producers pay 45 cents per $100 in sales to fund marketing ($31.4 million, or 61% of the total budget), research ($12.9 million, or 25%), and education ($7.2 million, 14%). The focus this year is value-added and niche marketing, with $10.4 million earmarked for retail and foodservice initiatives.

The group that filed suit, which includes the National Pork Producers Council, the Michigan Pork Producers Association, and a number of independents, contends that the USDA had no authority when it held a binding referendum among all U.S. producers last fall to end the program.

“We have confidence that the federal court system will follow the law when determining how the referendum was called, how it was conducted, and how the votes were interpreted,” says pork producer and plaintiff Pete Blauwiekel. “If the decision to terminate the program was made legally, then we’ll move on. But if USDA took it upon themselves to end my access to promotion, research, and education for my livelihood, then I want some answers.”

Butterfly Pork Chops?

Producers have battled for more than a year about keeping the checkoff program, and the September referendum was bitterly contentious. Long before butterfly ballots became infamous in Florida, the referendum was plagued by problems. First, checkoff proponents said the USDA and Secretary of Agriculture Daniel Glickman didn’t have authority to call a vote.

Checkoff opponents — notably a group called Campaign for Family Farms — pushed hard for the referendum in 1999 and early 2000, collecting 19,043 signatures, about 20 percent of all hog farmers, to force the vote. (They needed 15 percent under USDA rules.) The group later accused USDA’s Agricultural Marketing Service of bungling verification and under-counting signatures. Glickman ultimately demanded the referendum, which ended in a very close vote — nearly 53 percent against, 47 percent for continuing checkoffs. Then program supporters accused the USDA of botching the vote count.

“The USDA ran the referendum in a manner that failed to apply consistent standards or to count all lawfully cast ballots,” says a National Pork Producers Council statement. The council alerted the USDA to irregularities, but “neither the Office of the Inspector General nor USDA took these concerns seriously or even investigated the situation thoroughly,” the council declares.

The injunction allows time for the court to examine whether the petitions and voting were flawed. “Allowing the Secretary [of Agriculture] to terminate a program relied on by many, when the process used to arrive at termination is allegedly flawed, is not in the public interest,” the injunction reads in part.

Hog farmers are still recovering from the 1999 crash in which wholesale prices plummeted but retail prices held steady (February 2000 PROMO). Checkoff fees fund promos including the fourth-quarter 2000 Other Tailgate Party at 15,000 retailers (10 grand prizes: trip for two to the Championship College Game and tailgate party with former NFL coach Mike Ditka) and tie-ins with QSRs including McDonald’s (Johnsonville brats) and Burger King (bacon club sandwiches).

Checkoffs also fund the Pork: The Other White Meat ad campaign, the fifth-most recognized ad slogan, according to Northwestern University research. State associations get 20 percent of checkoff funds, a total of $10.8 million, for local promos and education.

FTC CLEARS DOUBLECLICK

The Federal Trade Commission in January closed an 11-month-old investigation into data-collection practices at Internet advertising network DoubleClick, New York City. The FTC concluded that the company never used or disclosed consumers’ personally identifiable information for purposes other than those disclosed in its privacy policy, and did not use sensitive data for any online preference-marketing product. Closing the investigation doesn’t mean that no violation occurred, however, and the FTC can reopen the case if it chooses.

After discussions with the FTC, DoubleClick agreed to revise its privacy policy to explain its use of “Web bugs” (GIFs) that track surfers’ progress through sites; add more info on an “opt-out cookie” that bans tracking; and clarify what data it sells to third parties (from consumers who opt in for promotional offers).

DoubleClick, which handles planning, execution, and tracking of online media campaigns, has advocated privacy over the last year by creating an advisory board and privacychoices.org to let consumers opt out of targeted ads, and by naming a former New York City consumer affairs commissioner, Jules Polonetsky, as chief privacy officer.