WASHINGTON, D.C. — The U.S. Department of Agriculture is directing federally overseen agricultural checkoff programs to halt funding for certain environmental, social, and governance initiatives, immediately restricting how mandatory producer assessments can be used across dairy and other commodity promotion programs.
The Sept. 17 directive requires the Agricultural Marketing Service to work with all research and promotion boards to identify ESG-related projects that seek commitments from producers, processors, handlers, retailers or similar entities. Existing contracts may remain unchanged, be modified or be terminated depending on whether USDA determines they align with the administration’s policy.
For activities ordered terminated, the restrictions extend to research, media, social media, websites and meetings supporting the affected ESG work. The directive applies to research and promotion boards, contractors, affiliated organizations and state, regional and importer programs.
The policy represents a shift in federal oversight of producer-funded commodity promotion programs, which collect mandatory assessments to finance activities including market promotion, research and consumer information. USDA’s directive states that those assessments should be focused on expanding markets and demand rather than ESG, net-zero or climate-neutrality initiatives that the department views as imposing non-statutory costs or restrictions.
Agriculture Secretary Brooke Rollins framed the change as a return to the programs’ market-development mandate.
“American dairy producers, cattle ranchers, and farmers pay checkoff assessments so those dollars can build demand for their products — not bankroll radical climate agendas that raise costs and constrain production,” Rollins stated.
The action specifically affects ESG-related work supported through the Dairy Checkoff, including projects associated with the Innovation Center for U.S. Dairy and its greenhouse-gas and net-zero goals, according to USDA.
The department is allowing administrative functions that do not advance the targeted initiatives to continue while directing AMS to ensure that research and promotion money in other commodity checkoff programs is not used to advance ESG mandates.
Under the memorandum, checkoff money cannot support the solicitation or enforcement of mandatory ESG commitments, pledges, scorecards or reporting requirements. It also bars support for activities that condition market access or participation on adopting ESG metrics, emissions targets or related non-statutory standards that USDA determines disadvantage U.S. producers.
AMS is also directed to review budgets, plans, projects, contracts and other activities across the programs. Research and promotion funds cannot be used for ESG mandates, climate-neutrality or net-zero frameworks that impose additional regulatory, reporting or cost burdens, while permitted activities are to remain within authorized promotion, research and consumer-information functions.
USDA maintained that the underlying checkoff model can generate economic returns when focused on promotion and market development. The department cited an independent Texas A&M analysis estimating an aggregate dairy return of $5.93 for each dollar spent on checkoff activities.
The figures cited by USDA included estimated returns of $4.16 per dollar for fluid milk, $2.67 for cheese, $24.85 for butter and $12.82 for dairy exports. The department also cited separate return-on-investment studies showing $13.41 for beef, $6.40 for cotton and $33.54 for softwood lumber.
The memorandum, issued by Under Secretary for Agriculture for Marketing and Regulatory Programs Dudley Hoskins, took effect immediately and will remain in force until modified or rescinded. Implementation must comply with applicable law, existing orders, and individual contract terms.
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