Checkoff Law and Legal Definition

In the past few decades, Congress has enacted legislation explicitly authorizing national generic promotion ("check-off') programs for 20 separate farm commodities. In 1996, the U.S. Department of Agriculture (USDA) was empowered to establish such programs for virtually any agricultural commodity ,and is no longer required to obtain congressional authorization.

For example, 0.5 percent of the selling price on the first purchase of soybean bushels is set aside as the soybean checkoff. This money is used to promote U.S. soybeans both domestically and internationally. Half of the checkoff funds are assigned to state-level soybean boards, or QSSBs. The remainder is administrated at a national level by the United Soybean Board (USB).

Many promotion programs have a no-refund policy, which assures stable funding and is consistent with the aim of eliminating the "free rider" problem. The 1996 Farm Bill requires that any new promotion orders maintain an escrow account from which refunds will be paid to producers who request them, but only if the order is not approved in an initial delayed referendum. In 1995, the U.S. Department of Agriculture announced that refunds would be discontinued on soybeans sold on or after Oct. 1, 1995. However, states have grace periods during which a producer can file a claim.

For example, in Ohio and Indiana, producers had 90 days after Oct. 1 to apply for a refund of money collected on soybeans sold prior to that date. This gives them until the end of the year to ask for their money back. However, total refunds are limited to 10 percent of all collections per state, so producers may get a partial, pro-rated refund depending on the number of requests.

Local soybean boards or QSSBs should be consulted for current applicable law and procedures.