Evaluation of California Commodity Marketing Programs

GOVERNMENT mandated commodity market­ ing programs continue to be both popular and controversial. These programs, which are re­ quested, approved, and funded by California produc­ ers, have the stated objectives of contributing to or­ derly marketing and/or improving producers’ returns. Their popularity is reflected by their long-standing use and the number of California commodity groups which have approved these programs. Currently, California has 13 federal marketing or­ ders and 48 state marketing programs, including state marketing orders, commodity commissions, and coun­ cils. California commodity producers have recently assessed themselves upwards to $150 million annu­ ally to operate these marketing programs, with about 75% of budgeted expenditures devoted to generic ad­ vertising and promotion. These programs cover com­ modities that account for over 50 percent of California’s agricultural output, based on value.1 The use of these marketing programs is in a con­ tinuous state of flux. A total of 24 new state programs were added since 1980 and 15 were terminated. Of the 17 federal marketing orders operating in 1993, four were eliminated by January 1996, with none added. The federal programs that were terminated included the marketing order for desert grapes and the long­ standing marketing orders for California-Arizona na­ vel oranges, Valencia oranges, and lemons. Five of the currently effective California programs have been in continuous operation for over 50 years. Although supported by an overwhelming majority of covered producers, government mandated commodity marketing programs have encountered organized and powerful opposition. The opponents, who have largely failed in the political arena, have concentrated on filing legal actions against various provisions of individual pro­ grams. These legal challenges were largely ineffective until 1995, when the U.S. Ninth Circuit Court declared that federally required funding of commodity promo­ tion programs for peaches and nectarines violated the First Amendment rights of the producers funding them. This decision, which had a potentially adverse impact on all state and federal mandatory commodity promotion programs, was appealed by the government to the United States Supreme Court and the case, Daniel R. Glickman, Secretary of Agriculture v. Wileman Bros. & Elliott, Inc., et al. was heard December 2, 1996. In a 5-4 decision handed down on June 25, 1997, the Supreme Court upheld the constitutionality of federally required funding of commodity promotion programs. This ac­ tion, which reversed the Ninth Circuit’s 1995 decision, will severely restrict First Amendment challenges to marketing programs, but likely it will not end the le­ gal challenges to these programs. A number of pend­ ing court cases involving constitutional challenges to the marketing programs for kiwifruit, plums, apples, grape rootstocks, cut flowers, almonds, milk, and cling peaches are expected to be dismissed as a result of the Supreme Court decision.