Casey Reynolds, Executive Director
Turfgrass Producers International
Members of the U.S. sod production industry have asked Turfgrass Producers International (TPI) to investigate grower interest in a sod checkoff program and the impacts it could have on marketing and promoting natural turfgrass. On May 19th, 2020 TPI held an online webinar to seek input from producers and share information on what a potential checkoff could look like for the sod industry. Over the next 12 to 18 months, all U.S. sod producers will have a chance to provide input on establishing an industry-wide checkoff and ultimately be asked to vote on it in a nationwide referendum in order for it to become law.
Before getting into what a sod checkoff may look like, it is important to provide a brief overview of what they are and how they’re assembled and managed. Agricultural Research and Promotion Programs, known as “checkoff” programs, are industry-funded initiatives which improve the market position of a covered commodity by expanding markets, increasing demand, and developing new uses and markets. They began operating at the state and regional level nearly a century ago; the term “checkoff” originated in connection with some of the earliest programs in which producers marked a check box if they wished to contribute to the program. (Today, participation in approved checkoff programs is mandatory, but the name “checkoff” has remained.) In 1966, Congress began authorizing the establishment of checkoff programs at the federal level. Thirty years later in 1996, Congress passed the Commodity Promotion, Research and Information Act, which authorizes the U.S. Department of Agriculture (USDA) to establish checkoff programs through the federal rulemaking process, without Congress needing to pass a law for each and every program. Between checkoff programs authorized by Congress and checkoff programs established by the USDA under the authority of the Commodity Promotion, Research and Information Act, there are currently 21 agricultural checkoff programs at the federal level.
Checkoff programs establish a legal and organizational framework so competitors can pool resources and promote an industry as a whole. Checkoff programs help to develop new markets, strengthen existing markets, conduct important market and scientific research, and promote industry initiatives and activities. One of the most valuable characteristics of checkoff programs is that they promote and drive demand for a covered commodity without reference to specific producers or brands, thereby benefiting all producers and the entire industry. They are funded, governed and managed by the industry and not the government. In fact, the only government involvement is through the U.S. Department of Agriculture, which works with the checkoff board to ensure fiscal responsibility, program efficiency, effectiveness, and fair treatment of stakeholders. They also conduct an independent, third-party evaluation to determine return on investment to ensure that the program is benefiting the producers who fund it. In general, return on investment from checkoff programs can range from $3 to as much as $18 for each dollar spent.
A sod checkoff program would be governed by a board of directors, consisting of, as the sod industry determines, large and small producers, TPI members and non-TPI members, warm-season and cool-season growers, etc. from throughout the United States. Board members and their staff help would carry out the checkoff programs and direct the day-to-day management responsibilities. Boards may also contract out the administration of the program, and typically contract out the execution of the checkoff program’s research and promotional activities. USDA’s Agricultural Marketing Service provides oversight of the checkoff programs to ensure compliance with the regulations governing each program. This oversight includes approving budgets, contracts and communications, and is generally required in order for checkoff programs to legally operate. However, it is important to note that all funds raised through assessments would go directly to the sod checkoff board and not to or through the government.
How would a sod industry checkoff get formed? Ultimately, it requires passage by a majority vote of U.S. sod producers in a nationwide referendum. Pursuant to the previously mentioned Commodity Promotion, Research and Information Act, the USDA Secretary may issue orders that “strengthen the position of agricultural commodity industries in the marketplace,” “maintain and expand existing domestic and foreign markets and uses for agricultural commodities,” and “develop new markets and uses for agricultural commodities.” 7 U.S.C. § 7412(9). The Act states that an association of producers of the agricultural commodity may submit a proposed draft order to the Secretary and the USDA will consider this proposal if it has substantial industry support.
The draft order is designed solely by sod producers and lays out the details of the program, particularly with regard to 8 key questions:
- What types of programs will be authorized?
- What is the assessment rate?
- Which products will be assessed?
- Which entities shall pay the assessment?
- Will specific products or entities be exempt from assessments?
- Who shall represent the industry on the board?
- Will state or regional associations be involved?
- How will the program be approved in the referendum?
These questions will be answered by a sod checkoff formation committee throughout the summer and fall of 2020 and will be presented to the USDA for review later this year. This formation committee is made up entirely of sod producers who either attended the May 19th webinar and volunteered to serve or who have otherwise directly expressed an interest in serving on the formation committee. WatkinsonMiller, a law firm with over 25 years of experience in passing checkoff programs, will facilitate the formation committee meetings.
Two Floridians will be on the formation committee: Travis Council (Council Growers) and Will Nugent (Bethel Farms). Council, who is also the current president of Turfgrass Producers of Florida shares, “I am happy to see two Florida growers involved in the formation process. Both Will and I look forward to working on this effort.”
A key goal of this committee is to communicate with other producers in their state or region to make sure that they have a chance to provide input on the draft order. A properly constructed draft order that the industry will support is vital to its passage in a nationwide referendum. Checkoff programs have been very successful in other industries, and there is no doubt that one has great potential for the sod industry as well. There are many threats to our product from regulatory agencies, competitive products, shrinking lawn sizes, public misperception of the value of our product and its role in society. Not only will a checkoff program provide our industry the vehicle torespond to these threats, it will also allow us to capitalize on un-tapped opportunities. There are many examples in other industries with checkoff programs where they have partnered with others to forge new markets, expand current markets, and raise awareness and value of their products. A few of these examples can be seen in the May 19th webinar (a recording is available on the website, SodCheckoff.org) and their potential in the sod industry is no different.
“A checkoff program for U.S. sod production is an idea that has been discussed for many years,” says Nugent. “I’m excited to be a part of this process to see how we can elevate the sod business in Florida and the U.S.”
Learn More at www.SodCheckoff.org
- Watch the full May 19th webinar recording
- Sign up for notifications & announcements
- Read the list of Frequently Asked Questions (FAQs)
- Submit questions or provide input