Frequently Asked Questions
Is this just another government program?
The Research and Promotions Program (commonly known as checkoff program) is not a government-run program. It is designed and governed by industry. The program board of directors develops the business plan and decides how funds will be spent. USDA provides oversight of the Board to ensure that funds are used in accordance with the law and regulations. This is a collaborative effort in which USDA is committed to oversight that does not impinge on the Board’s ability to grow and adapt to a fast changing market place.
Is the assessment a government tax?
The assessment is an industry self-imposed payment which is used to fund industry-related research, promotion and program-related expenses. The industry votes on the level of assessments and the range the assessment may take. This is an investment in the future health and sustainability of an industry increasingly being disparaged by bad science and misinformation.
How can industry be sure that assessment money is not used inappropriately?
A wood-to-energy check-off program is run by the industry through its own board of directors which has the fiduciary responsibility of keeping it financially sound. The Board develops program business plans, approves annual work plans, and decides how funds will be spent. By law, check-off program administration costs cannot exceed 15% of the total annual income. However, Boards can chose to lower this percentage. Also, by law, program results must be measured every five years by a third-party and reported to the industry. The industry will then have the opportunity to review the report, consider the program’s value and vote to determine whether to continue the program.
Does USDA approve all budgets, projects, research, promotion programs, etc.?
Yes, USDA works with the check off program board of directors and staff to ensure that all expenditures of funds are in accordance with the law and regulations. This is a collaborative effort in which USDA is committed to oversight that does not impinge on the Boards ability to grow and adapt to a fast changing market place.
Does USDA ever deny such projects?
On rare occasions USDA will determine that the project is not within the law and regulations. But, in those cases USDA personnel will work with the program to revise the project so that it can conform. This collaborative relationship between USDA and the industry is much different than what some may have experienced with other government agencies.
How is the Board of Directors Selected?
The Board of Directors are selected by the industry. The names are then presented to the Secretary of Agriculture for approval. The Secretary reviews the Board’s composition for fair representation using such indicators as geography, company size, industry sector and diversity. Should the Secretary find deficiencies in these indicators he may make recommendations to the industry for adjustments.
Can the larger companies control voting?
Based on the ad hoc committee’s draft in order for any initiative to pass in a wood-to-energy check-off program, it must have a simple majority from member companies AND a simple majority representing production expressed in BDTs. Requiring majorities in BOTH categories for an initiative to be adopted precludes any segment of the industry from controlling the process.
Will a check-off program duplicate work being done by trade associations?
Check-off programs have been shown to support, not supplant the work of trade associations. History has shown that forest-based industry trade associations have not been able to sustain funding for research and promotion initiatives long enough to have a significant impact on target audiences. Unlike trade associations, the funds cannot be used to influence legislation or government policy. These prohibitions do not preclude boards from providing factual information to government officials in an unbiased manner. For example, the Board may share results of research with government officials, but they may not recommend the government take action based on results of the research. This does not prohibit companies, individuals or organizations such as trade associations from using the results of the research in any manner they wish, including lobbying and influencing government policy, both domestically and abroad.
Can the Board use funds to influence the result of subsequent referenda?
No. Board and Board members, when they are acting in their official capacities, are prohibited from attempting to influence the result of a referendum.
Is USDA required to review the Board’s promotional campaigns?
Yes, USDA will review and approve in advance all promotion campaigns to ensure they conform to the law and regulations. USDA personnel are not involved in the development of these campaigns. Board and industry marketing experts are responsible for carrying out all aspects of the program.
In their advertising can the Board disparage another commodity?
AMS will disapprove any advertising, press releases, etc. deemed to disparage another commodity or which is false or misleading. However, comparative advertising is allowed by USDA. Comparative advertising compares facts about different commodities or products.