LAMB PROMOTION, RESEARCH AND INFORMATION ORDER

1. Why did the Department of Agriculture (USDA) publish the proposed Lamb Promotion, Research, and Information Order (Order) in the Federal Register?

In response to a surge in lamb imports, the industry filed a petition with the International Trade Commission (ITC). In conducting their investigation, the ITC found that lamb meat was being imported into the United States in such increased quantities as to be a substantial cause of the threat of serious injury to the domestic industry and in April of 1999, recommended a series of relief measures. Acting upon the ITC recommendation, the President enacted safeguard measures in accordance with the Trade Act of 1974, as amended, and instructed the U.S. Trade Representatives Office to provide ITC with benchmarks for the use in monitoring developments in the domestic lamb industry and in preparing the Commission's mid-term report. The first of the six benchmarks was for the Commission to “Evaluate the effort and success to put forth a coordinated and comprehensive strategy for market development; and the industry's utilization of any future checkoff program or other program using industry funds for generic lamb promotion.” This benchmark is an industry self-help program supported by checkoff funds to improve production efficiency and increase demand. Accordingly, the proposed Order was published to give members of the industry an opportunity to provide suggestions and comments regarding the proposed self-help program for the lamb industry.

2. What is the purpose of the proposed Order?

The Order is intended to develop and finance an effective and coordinated program of promotion, research, and information to maintain and expand the markets for lamb and lamb products including pelts but excluding wool and wool products.

3. Who developed the concepts for the proposed Order and what opportunity was made available to the industry to provide input?

The American Sheep Industry Association (ASI) submitted the proposed Order to USDA on December 22, 1999, in response to a November 23, 1999, Federal Register notice inviting interested parties to submit such an Order. The proposal was developed utilizing input from the USDA Sheep Industry Checkoff Exploration Team (Team), a 15-member team representing all segments of the industry, as well as from input received at two industry-wide meetings and from other interested parties. 

4. Under what legislative authority would the Order be implemented?

The Order would be implemented under the Commodity Promotion, Research, and Information Act of 1996.

5. How much money is the Order expected to generate?

Approximately $3 million annually.

6. Is this Order similar to other commodity checkoff programs already in place?

Yes. This Order has many of the same guiding principles as the other 14 checkoff programs the Agricultural Marketing Service oversees including beef, pork, dairy, cotton, potatoes, and eggs.

7. Why doesn't the proposed Order contain any provisions for the assessment of importers?

Based on the Team's recommendations, the industry-submitted proposal did not include any provisions for the assessment of importers. Also, an ASI-conducted survey sent to over 1,000 lamb industry representatives, showed 89 percent of those responding agreed with this recommendation. Domestic producers want to promote “American Lamb” and assessing importers would have led to promotion of both domestic and imported lamb.

8. Who will be assessed under the proposed Order and at what rate?

Under the Order, lamb producers, seedstock producers, feeders, and exporters would pay an assessment of one-half cent ($.005) per pound when live lambs are sold. The first handler, primarily packers, would collect the assessment and pay an additional 30 cents per head of lambs purchased by the first handler for slaughter. The first handler would remit the total amount of assessment due to the proposed Lamb Promotion, Research, and Information Board (Board).

9. What are the proposed duties of the Board?

The primary responsibility of the Board will be to administer the Order in accordance with its terms and conditions. The Board will be charged with collecting assessments due under the Order. The Board must use the funds collected to carry out an effective, continuous, and coordinated program of promotion, research, and information, designed to strengthen the lamb industry's position in the marketplace. Also, the Board will be responsible for developing and submitting budgets, plans, and projects to USDA for approval and for entering into contracts or agreements for program development and operations.

10. How many members will serve on the proposed Board and what criteria will be used to select the Board members?

The proposed Order provides for a 12-member Board to administer the Order and will be composed of: six producer representatives (three from the geographic region east of the Mississippi River and three from the geographic region west of the Mississippi River), three feeder representatives, two first handlers, and one seedstock producer. When making appointments to the Board, USDA will ensure that the representation for producers and feeders meets the following criteria: two of the producers appointed to the Board shall own annually 100 or less head of lambs, one producer shall own between 101 and 500 head of lambs, three producers shall own more than 500 head of lambs, one of the feeders shall feed less than 5,000 head of lambs annually, and two of the feeders shall feed 5,000 or more head of lambs annually. 

11. When would members of the industry be able to vote on whether or not they favor the Order?

If the Order is implemented, USDA would oversee the Board's activities and would conduct a referendum not later than three years after assessments first begin. Approval in referendum would require approval by a majority of those voting and by a majority of the volume represented in the referendum. A subsequent referendum must be conducted not later than seven years after assessments first begin under the Order. Additional referendums may be conducted at the request of the Board, at the request of 10 percent or more of the number of persons eligible to vote in referenda, and at any time USDA determines a referendum is warranted.

12. Will USDA be reimbursed for the costs it may incur if this Order is implemented?

USDA implementation and oversight costs would be reimbursed by the Board.

13. Does the proposed Order provide for refunds?

Yes. A one-time refund would be available for assessments paid provided refund requests are filed by the date the required referendum results are announced. Full refunds or prorata refunds would be paid from a 10 percent reserve established for refunds.