GAO

United States General Accounting Office

Report to Congressional Requesters

September 2000 PORK PROMOTION 

PROGRAM

Petition Validation 

Process Needs to Be 

Strengthened

GAO/RCED-00-274

Page 1 GAO/RCED-00-274 Pork Promotion Program

Contents

Letter 3

Appendixes Appendix I: Chronology of Steps in AMS' Process to Validate 

the Pork Check-off Petition 18

Appendix II: The Secretary of Agriculture’s Authority to Order a 

Referendum and Use Appropriated Funds 23

Appendix III: GAO Contacts and Staff Acknowledgments 31

Tables Table 1: Steps in AMS’ Validation Process 6

Abbreviations

AMS Agricultural Marketing Service

NPPC National Pork Producers Council

USDA U.S. Department of Agriculture
Page 2 GAO/RCED-00-274 Pork Promotion Program
Page 3 GAO/RCED-00-274 Pork Promotion Program

United States General Accounting Office

Washington, D.C. 20548

Resources, Community, and

Economic Development Division

B-286107 Letr

September 28, 2000

Congressional Requesters

Since its enactment in 1985, the mandatory pork promotion program has 

collected over $500 million from pork producers to fund advertising and 

research for strengthening the pork industry’s position in the marketplace.1

Under this program, more commonly known as the pork check-off 

program, the Secretary of Agriculture is required to hold a national 

referendum, or vote, on whether to continue the program when 15 percent 

of eligible pork producers sign a petition making such a request. On May 24, 

1999, the U.S. Department of Agriculture (USDA) received a petition with 

about 19,000 signatures requesting a vote on whether to continue the 

program.2

 After 8 months of reviewing the petition, USDA had not 

completed its validation efforts to determine whether the 15-percent 

requirement had been met. On February 25, 2000, the Secretary ordered a 

referendum on his own authority, which was held on September 19−21, 

2000, and USDA plans to use appropriated funds to pay an estimated 

$529,000 in referendum expenses.

Concerned about the Secretary’s decision to order a referendum in the 

absence of a validated request from 15 percent of the eligible pork 

producers, you asked us to determine (1) what major problems USDA’s 

Agricultural Marketing Service (AMS) encountered in its process to 

validate the pork petition and AMS’ plans to improve the validation 

process, (2) what factors led to the Secretary’s decision to order the 

referendum, and (3) whether the Secretary has the authority to order a 

referendum and whether USDA can use appropriated funds to pay its cost.

Results in Brief AMS’ process to validate the pork petition was flawed in three key areas, 

according to our analysis. Problems in any one of these areas would have 

raised questions about the integrity of the validation process. First, AMS 

did not accurately estimate the population of pork producers. Second, it 

1

The check-off program also applies to pork importers. For purposes of this report, we refer 

to both producers and importers as producers.

2

USDA estimates that in 1998 there were about 100,000 producers.
B-286107

Page 4 GAO/RCED-00-274 Pork Promotion Program

did not develop a reliable database of petitioner information as a basis for 

verifying petitioners’ eligibility to sign a petition. Third, it employed a 

flawed survey methodology to verify the eligibility of the petitioners. As a 

result, AMS could not determine with certainty whether 15 percent of 

eligible pork producers had signed the petition, which would require the 

Secretary to hold a referendum on whether to continue the program. 

Although AMS has recognized that its validation process was flawed, it has 

not taken substantial actions to improve its process. 

Two primary factors led the Secretary of Agriculture to order a referendum. 

First, he concluded that AMS’ validation process was flawed. Consequently, 

the Secretary determined that it was impossible to ascertain the number of 

valid petitioners and that efforts to revalidate the petition would not result 

in any greater certainty. Second, the Secretary based his decision on his 

belief that check-off programs, including pork, should be subject to 

periodic referendums. Furthermore, he strongly believed that pork 

producers should have the opportunity to vote on whether to continue the 

check-off program because the program is a mandatory assessment and the 

industry has changed dramatically since the last vote in 1988. 

In our view, the Secretary has the authority to order a pork referendum, but 

referendum expenses must be reimbursed from pork check-off funds, and 

appropriated funds may not be used to pay referendum expenses. The 

Secretary interprets the Pork Promotion, Research, and Consumer 

Information Act of 1985 as granting him authority to conduct a referendum 

as a tool in deciding whether to terminate the pork check-off program. We 

find this interpretation to be a reasonable one. However, the Secretary may 

not pay for a referendum with appropriated funds because the act 

specifically states that AMS must be reimbursed for referendum expenses 

from pork check-off funds.

We are recommending that AMS strengthen its petition validation process 

and seek reimbursement from check-off funds to pay all referendum 

expenses.

Background AMS is responsible for ensuring that 14 commodity check-off programs, 

such as pork, beef, and soybeans, comply with their authorizing legislation. 

Each commodity check-off program gives producers an opportunity to 

petition the Secretary for a national referendum on whether to continue 

their program. Currently, AMS is validating a petition received from beef 

producers calling for a referendum on the beef check-off program.
B-286107

Page 5 GAO/RCED-00-274 Pork Promotion Program

The Pork Promotion, Research, and Consumer Information Act of 1985,3

which established the pork check-off program, requires U.S. pork 

producers to pay an assessment. This assessment is currently 45 cents for 

every $100 of hog sales.4

 In 1999, pork producers paid $41 million in 

assessments. The assessments are managed by the National Pork Board, 

which is composed of 15 pork producers nominated by producers and 

appointed by the Secretary of Agriculture. In addition to distributing some 

of the assessment funds to state pork associations, the National Pork 

Board contracts with the National Pork Producers Council (NPPC), a 

nonprofit organization, for conducting research and generic advertising 

and promotion to strengthen the pork industry’s position in the domestic 

and international marketplace. One of NPPC’s more visible advertising 

campaigns has been “Pork, the Other White Meat.” 

The Pork Promotion Act requires that a referendum on continuing the pork 

check-off program be held when the Secretary determines that 15 percent 

of the eligible U.S. pork producers petition for such a referendum.5

 To be 

eligible to sign a pork petition, a person must have owned and sold at least 

one hog during a defined period. The Pork Promotion Act also requires that 

expenses associated with a referendum be paid with check-off funds. Pork 

producers have not voted on whether the pork check-off should continue 

since 1988.

In 1997, the Campaign for Family Farms, a rural advocacy group, began an 

effort to collect petition signatures from producers to initiate a referendum 

on continuing the pork check-off program. In the opinion of this group, the 

program does not benefit independent pork producers. Pork producers had 

13 months to sign the petition, beginning on April 24, 1998. In May 1999, the 

Campaign for Family Farms delivered a petition with about 19,000 

signatures to AMS, and the agency began its validation process to ensure 

that 15 percent of the eligible program participants had signed the petition. 

AMS’ validation process consisted of the five major steps listed in table 1. 

Because AMS did not have written procedures for validating petitions prior 

to receiving the pork petition, it developed them as the process evolved. 

3

Pub. L. No. 99-198, sections 1611-1631, 99 Stat. 1354, 1606-22 (1985), codified at 7 U.S.C. 

sections 4801-4819.

4

Importers also pay an assessment on imports of hogs, pork, and pork products.

5

7 U.S.C. section 4812(b).
B-286107

Page 6 GAO/RCED-00-274 Pork Promotion Program

AMS discontinued its validation process on February 25, 2000, when the 

Secretary ordered a referendum on his own authority. (See app. I for a 

detailed chronology of the steps in AMS’ validation process.)

Table 1: Steps in AMS’ Validation Process

In step 1, AMS estimated a population of 99,909 pork producers.6 From this, 

it determined that 14,986 signatures (15 percent) would be required to 

trigger a referendum. In step 2, AMS determined that it had received 19,043 

petitioners from the Campaign for Family Farms. In step 3, AMS 

determined it had 17,694 potentially valid signatures. In steps 4 and 5, AMS 

contracted with a telephone-polling firm to conduct a survey of a random 

sample of 2,500 potentially valid petitions to verify signatures and 

determine eligibility. Because of the surprisingly large number of 

petitioners who said that they had not signed the petition, AMS sent a 

follow-up letter to verify the telephone survey results and obtain 

documentation proving eligibility.

On January 5, 2000, AMS briefed NPPC, the Campaign for Family Farms, 

and others on the status of its validation efforts. Using the results of its 

validation efforts as of that date, AMS estimated the number of valid 

petitioners, with a 95-percent confidence level, was no more than 12,428, or 

2,558 less than required to trigger a referendum. In addition, at this briefing 

AMS stated that this estimated number could and probably would change 

as it continued its validation efforts. 

Step Validation process

1 Estimate the population of eligible pork producers to determine the number of 

petitioners required to trigger a referendum

2 Count petitioners and create a database of petitioner information

3 Review database and remove invalid petitioners—those with no signature, dates 

outside the representative period, and duplicates—to determine remaining 

potentially valid petitions

4 Verify that the producer named in the petition had actually signed it 

5 Verify that the petitioner was eligible under the Pork Promotion Act to sign by 

asking the petitioner to provide documentation on pork sales

6

AMS estimated the number of importers to be 1,017.
B-286107

Page 7 GAO/RCED-00-274 Pork Promotion Program

On January 31, 2000, the Secretary met with both NPPC and the Campaign 

for Family Farms to discuss their views on the petition validation process. 

By that time, AMS had revised its estimate to no more than 13,696 valid 

petitioners. However, the AMS Administrator said that she could not tell 

the Secretary with certainty the number of valid pork petitioners because 

of problems the agency had encountered in the validation process. On 

February 25, 2000, the Secretary ordered a referendum without having 

ascertained that the 15-percent requirement for a mandatory referendum 

had been met, and AMS discontinued its validation process.

The Validation Process 

Was Flawed in Three 

Key Areas, Making 

AMS Unable to 

Determine Whether the 

Petition Should Trigger 

a Referendum

Because of flaws in three areas, we conclude that AMS was unable to 

determine whether the petition presented was signed by 15 percent of 

eligible pork producers, which would therefore trigger a referendum. First, 

AMS did not accurately estimate the population of pork producers and 

therefore could not accurately compute the number of producers required 

to meet the 15-percent requirement. Second, AMS did not create a reliable 

database of petitioner information, which undermined its efforts to validate 

the eligibility of the signatures. Finally, AMS employed a flawed survey 

methodology to verify petitioners’ eligibility. Although AMS has 

acknowledged that its process was faulty, it has not yet developed and 

implemented improvements to ensure the successful validation of future 

check-off petitions. Any one of these problems calls into question the 

integrity of AMS’ process to validate the pork producers’ petition. 

AMS Underestimated the 

Population of Pork 

Producers 

As the first step in validating the pork petition, AMS had to determine what 

number of petitioners would meet the threshold of the 15 percent of 

eligible producers needed to trigger a referendum. Because information on 

the population of eligible producers is not available, AMS could not arrive 

at a precise number. Consequently, it attempted to estimate this population 

from data on the number of farms that sold hogs. AMS made some 

adjustments to this number. For example, it deleted from its estimate farms 

that raised hogs owned and sold by another producer who paid the checkoff assessment. Even with such adjustments, however, the estimate was 

flawed because AMS counted farms, not the number of producers on those 

farms who pay check-off assessments. According to industry experts, it is 

not uncommon to have more than one producer on a farm who sells hogs, 

such as a family farm in which the father and daughter sell hogs 

individually and each pays separate check-off assessments. Consequently, 

AMS may have understated the eligible population and thus understated 

the number of petitioners required to trigger a referendum. 
B-286107

Page 8 GAO/RCED-00-274 Pork Promotion Program

The Petitioner Information 

in the Database Is 

Questionable

After counting the number of petitions—19,043—AMS hired a contractor to 

keypunch the petition information into a database to facilitate the review of 

petitioner information. AMS did not follow generally accepted practice in 

providing instructions to the keypunch contractor. Normally, the party 

providing the data is responsible for reviewing and editing this information 

before giving it to the keypunch contractor. However, AMS instead required 

its keypunch contractor to make decisions about the information that 

should be entered into the petitioner database. Such exercise of judgment 

in this type of operation allows the least knowledgeable people to decide 

how to handle illegible data, incomplete information, and information in 

incorrect locations on petition cards. For example:

• The petitioner had to enter a date between April 24, 1998, and May 24, 

1999, in a designated location on the petition to be considered valid. If 

no date was evident in this location, AMS asked the keypunch operator 

to examine the petition for other evidence of the date, such as a 

postmark, which the operator was to enter. This process is likely to 

result in inconsistent data entry, which makes the database information 

unreliable.

According to AMS, these problems were compounded by the fact that the 

contractor apparently did not follow AMS’ requirement to reenter the data 

and resolve differences between the two sets of entries, which is a practice 

in a data entry operation to ensure quality and was required by the 

purchase order between AMS and the contractor.

After receiving the completed database from the contractor, AMS’ internal 

auditors found a high rate of data entry errors—about 13 percent. Because 

the errors exceeded AMS’ acceptable level of 5 percent, the auditors were 

unable to confirm the reliability of the information in the database. In 

addition, after AMS performed an initial analysis on the database, the 

auditors found that the agency had failed to follow its written guidelines on 

eliminating duplicate petitions and verifying the eligibility of more than one 

petitioner at the same address and failed to document its reasons for 

eliminating, or not eliminating, potential duplicates. Consequently, AMS 

may have inappropriately excluded or included some petitioners. 

Methodology to Verify 

Signatures and Eligibility 

Was Faulty

To verify that the producer named in the petition actually signed it and was 

eligible to sign, AMS conducted a telephone survey of a random sample of 

the petitioners. However, we found that AMS did not follow professional 

practices for designing and administering its telephone survey. This 
B-286107

Page 9 GAO/RCED-00-274 Pork Promotion Program

contributed to the lack of reliability of AMS’ entire validation process. 

Specifically, AMS did not (1) pretest the telephone survey, (2) employ 

practices to encourage high response rates from surveyed petitioners, (3) 

consider the burden on the petitioner when choosing the method for 

obtaining documentation proving eligibility, and (4) conduct an analysis of 

petitioners who did not respond to the survey. AMS did not follow these 

practices principally because of inadequate planning and pressure to 

complete the entire validation process quickly.

AMS Did Not Pretest the 

Telephone Survey

AMS’ failure to pretest the telephone survey meant that the agency had no 

assurance that the information gathered, when aggregated across all 

producers contacted, could be relied upon by decisionmakers. Professional 

practices for administering a telephone survey advocate that it be pretested 

on typical members of the population to determine that respondents are 

able to provide reliable and consistent information. If it had pretested the 

telephone survey, AMS could have assessed whether it was asking the right 

questions in the right way and whether producers were willing and able to 

give AMS the information it needed. Moreover, if the results of the pretest 

indicated a low likelihood of AMS’ obtaining the data it needed, AMS could 

have explored other means of obtaining the data, such as a mail survey. 

AMS’ Survey Practices Did Not 

Encourage High Response Rates

Although the telephone pollsters introduced themselves as representing 

USDA, it was likely that some petitioners were reluctant to discuss their 

actions with an unannounced telephone caller because of controversy 

surrounding the pork petition. For example, according to the sponsor of 

the petition, producers were concerned that if the meatpacking companies 

learned that they had signed the petition, the companies might no longer 

buy their hogs. To increase the participation rate in a telephone survey, 

professional practices advocate sending a letter preceding the telephone 

call to ensure that the person surveyed knows the caller is from a legitimate 

research organization. In addition, the telephone survey was conducted 

during the harvest season for farmers, which could have reduced 

participation in the survey because producers may have been unavailable 

to answer the telephone.

AMS Did Not Consider the 

Burden on Surveyed Petitioners 

AMS’ telephone survey required producers to send in proof that they sold at 

least one hog between January 1, 1997, and June 1, 1999. This approach 

created an unnecessary burden on producers by requiring them to write 

down a dictated address and provide an envelope, stamp, and copy of 

pertinent sales records. Instead, professional practices are to avoid asking 

questions that require significant effort or cost on the part of those 
B-286107

Page 10 GAO/RCED-00-274 Pork Promotion Program

surveyed. If documentation is required, professional practices advocate the 

use of a mail survey with the inclusion of a stamped, self-addressed 

envelope for returning the requested documentation. AMS’ failure to 

consider the burden it was imposing on petitioners may have discouraged 

eligible producers from sending in documentation and ultimately could 

have led to incorrect conclusions about petitioners’ eligibility. 

AMS Did Not Determine the 

Characteristics of 

Nonresponding Petitioners

AMS did not attempt to learn more about the 42 percent of producers who 

could not be reached by the telephone polling contractor; nor did AMS 

attempt to reach these nonresponders by an alternative means, such as a 

letter. Professional practices suggest that lack of information on 

nonresponders calls into question the results of a survey because these 

nonresponders may differ disproportionately from those who did respond. 

Consequently, AMS’ conclusions about the number of eligible pork 

producers who signed the petition could be unreliable. Because AMS did 

not initiate efforts to contact these petitioners, it is not possible to know 

how their responses would have influenced the results. 

AMS Has Not Improved Its 

Validation Process for 

Check-off Petitions

Although AMS has recognized that its validation process was flawed, it has 

not taken substantial actions to improve the process. On December 15, 

1999, a USDA task force led by the Under Secretary for Marketing and 

Regulatory Programs recommended, among other improvements, that AMS 

develop uniform petition procedures for all check-off programs and publish 

those procedures for public comment. The task force was established in 

1998 out of concerns about how some of the check-off programs were 

spending producers’ assessments. The task force’s report stated that there 

are several areas in which policies and procedures could be adopted to 

provide consistency across check-off programs, including establishing (1) 

deadlines for petitions, (2) the basis for determining the number of 

signatures required, (3) methods for how AMS should handle petitions and 

verify signatures, (4) a time requirement for the collection of signatures, 

and (5) public notification guidelines. According to USDA officials, the 

Department has not yet decided if it will implement these recommended 

procedures because it is still in the process of analyzing public comments 

on the proposed changes to AMS’ oversight of the check-off programs. 
B-286107

Page 11 GAO/RCED-00-274 Pork Promotion Program

Secretary’s Concerns 

About AMS’ Validation 

Process and Support 

for Periodic 

Referendums Led to 

His Decision to Order a 

Referendum

Two principal reasons led the Secretary of Agriculture to order a 

referendum. First, as we also found, the Secretary believed that AMS’ 

validation process was flawed, making it impossible to state precisely the 

final number of petitioners. The Secretary concluded that AMS did not 

develop a reliable database of petitioner information to verify petitioners’ 

eligibility to sign a petition and thus was vulnerable to criticism in a 

number of respects. The development of the database of petitions was 

open to criticism: The data entry process was flawed, valid petitioners were 

deleted, duplicate entries were not removed, and AMS’ judgments about 

individual petitioners when the form was not completed perfectly or legibly 

were open to challenge. In addition, regarding the telephone survey, the 

Secretary believed that the unannounced telephone calls by non-USDA 

employees to petitioners resulted in many petitioners responding that they 

had not signed the petition, when he believed that, in fact, they had actually 

signed. Thus, the Secretary concluded that any decision he made regarding 

the actual number of valid petitioners was likely to have little or no 

credibility. 

At this point the Secretary considered other options and concluded that 

further efforts to validate the pork petition would not result in any greater 

certainty concerning the number of eligible pork petitioners. Therefore, 

completing the validation of the petition was not necessary and would have 

wasted check-off funds. Furthermore, starting over was not a practical 

solution because the process had already taken a great deal of time, and 

many of the signatures were nearly 2 years old. AMS had already spent 8 

months working to validate the petition without success. In addition, both 

those in favor and those against a referendum wanted the issue to be 

resolved. 

Second, the Secretary’s decision was grounded in his belief that check-off 

programs, including pork, should be subject to periodic referendums. In his 

February 25, 2000, memorandum ordering a referendum, the Secretary 

stated that he strongly believed pork producers should have the 

opportunity to vote on the check-off program because it is a mandatory 

assessment and producers have not voted on its continuation since 1988. 

The Secretary also stated he believed the check-off program derives its 

legitimacy from the support of producers, and they have endured dramatic 

changes in their industry in recent years, including the trend toward fewer 

and larger pork producers. Furthermore, he believed the substantial 

number of petition signatures, whether or not they represented 15 percent 

of the eligible pork producers, indicated that the program might not have 
B-286107

Page 12 GAO/RCED-00-274 Pork Promotion Program

the support of those producers who are paying for it. Thus, the Secretary 

stated that it was appropriate and necessary to determine through a 

referendum whether a majority of current pork producers do, in fact, 

continue to support the check-off program. 

The Secretary of 

Agriculture Has the 

Authority to Order a 

Referendum but Must 

Use Pork Check-off 

Funds, Not 

Appropriated Funds

The Secretary of Agriculture has the authority to call for a pork 

referendum, but referendum expenses must be reimbursed from pork 

check-off funds. The Secretary interprets the Pork Promotion Act (7 U.S.C. 

section 4812(a)) as granting him the authority to conduct a discretionary 

referendum to be used as a tool in deciding whether to terminate or 

suspend the pork check-off program. We find this interpretation to be a 

reasonable one. However, the Secretary does not have the authority to pay 

for a referendum with appropriated funds because the Pork Promotion Act 

specifically states that referendum expenses must be reimbursed with 

funds collected by the National Pork Board from pork assessments. (7 

U.S.C. section 4809.) (See app. II for a more detailed discussion of these 

issues.) 

The Secretary Has the 

Authority to Conduct a 

Discretionary Referendum

The Pork Promotion Act requires the Secretary to conduct an initial 

referendum7

 and to conduct a subsequent referendum at the request of 15 

percent of the pork producers. However, the act, as well as the legislative 

history, is silent on the Secretary’s authority to conduct a referendum at his 

own discretion (a discretionary referendum). For some agricultural checkoff programs, the Secretary has explicit authority stating that he “may 

conduct a referendum at any time.” 8

7

The Secretary of Agriculture conducted an initial referendum on September 7-8, 1988. At 

that time, 77.5 percent of the pork producers and importers favored continuing the program.

8

For example, the promotion programs for cotton, eggs, and potatoes have statutory 

provisions with this explicit authority. However, the programs for mushrooms, popcorn, and 

honey have no such authority.
B-286107

Page 13 GAO/RCED-00-274 Pork Promotion Program

While the Secretary does not have this explicit authority to conduct a 

discretionary referendum in the pork check-off program, he does have 

implied authority under a provision in the Pork Promotion Act—section 

4812(a)—that allows him to terminate the pork check-off program if he 

determines it is no longer meeting its policy goals.9

 The Pork Promotion 

Act does not explicitly set out the declared policy, and the Secretary has 

discretion in determining whether the program is effectuating the policy. 

Under the Department’s interpretation of the termination provision, the 

Secretary’s authority to conduct a referendum can be inferred because a 

referendum may help inform his decision on whether to terminate the pork 

check-off program. 

The Supreme Court has held that in cases where the Congress has not 

explicitly addressed an issue, an agency’s interpretation of a statute 

prevails so long as it is reasonable.10 We find that the Department’s 

interpretation of the Pork Promotion Act is reasonable. A referendum is 

potentially valuable as input to a decision on whether to terminate a 

commodity promotion program.11 Moreover, the pork check-off program is 

funded by participant assessments, and it is reasonable that participants 

have a voice in determining the effectiveness of the program. The 

referendum may help the Secretary determine whether the pork check-off 

program is meeting its policy goals. Thus, in our view, the Secretary has the 

authority to conduct this discretionary referendum. 

The Secretary May Not Use 

Appropriated Funds to Pay 

Referendum Expenses

The Secretary stated he will use AMS-appropriated funds to pay for 

referendum expenses, which AMS estimates to be $529,000. USDA broadly 

interprets the permissible use of these appropriated funds to include 

anything that promotes farm income and farm marketing, including, in this 

case, the referendum expenses. However, the Pork Promotion Act specifies 

that referendum expenses must be reimbursed from check-off funds. 

9

Specifically, the section states, “If, after the initial referendum...the Secretary determines 

that an order, or a provision of the order, obstructs or does not tend to effectuate the 

declared policy of [the Pork Promotion Act], the Secretary shall terminate or suspend the 

operation of such order or provision.” 7 U.S.C. section 4812(a).

10FDA v. Brown & Williamson Tobacco Corp., __U.S.__, 120 S. Ct. 1291 (2000); Chevron, 

U.S.A., Inc. v. Natural Resources Defense, Inc., 467 U.S. 837 (1984). 

11The Secretary has stated that he will terminate the pork check-off program if the majority 

of voters do not favor its continuation.
B-286107

Page 14 GAO/RCED-00-274 Pork Promotion Program

USDA stated that it is conducting the referendum on the basis of the 

Secretary’s authority to terminate the check-off program under section 

4812(a). Expenses for a referendum conducted under this section, 

however, are explicitly provided for in the act under another provision. (7 

U.S.C. section 4811(c).) Section 4811(c) specifically requires that a 

referendum conducted under section 4812 be reimbursed from 

assessments collected by the National Pork Board. While an agency has 

reasonable discretion in carrying out an appropriation, and it is not 

necessary to specify every expenditure in an appropriation, the 

expenditure must not be an item that falls within the scope of some other 

appropriation or statutory funding scheme.12 Moreover, the Congress only 

authorized the appropriation of the funds necessary for the Secretary to 

carry out the pork check-off program, subject to reimbursement from pork 

assessments. (7 U.S.C. section 4819.)

These statutory provisions cannot be overcome by the more general 

appropriation to AMS.13 Accordingly, the Secretary must not use 

appropriated funds but must follow the provisions of the Pork Promotion 

Act and be reimbursed from pork assessments to pay referendum 

expenses. 

Conclusions Because commodity check-off programs require mandatory assessments, 

one of the key provisions of every program is that producers have the right 

to petition to vote on whether to continue the program. In the Pork 

Promotion Act, it is clear that a referendum must be held when 15 percent 

of the eligible producers request a vote. AMS has known about this 

requirement since 1985 but did little to prepare for the challenging task it 

presents. Furthermore, the procedures the agency developed in response 

to the petition were not based on professional standards. Therefore, the 

validation process it employed was not defensible. As a result, AMS was 

not able to successfully fulfill its responsibilities for determining if the 15-

percent requirement had been met. Nonetheless, in deciding to go ahead 

with a referendum, the Secretary acted under legal authority. However, 

when the Secretary decided to use appropriated funds to pay referendum 

expenses, he was not following the Pork Promotion Act. The act requires 

that referendum expenses be reimbursed from pork check-off funds. 

1263 Comp. Gen. 422, 427-28 (1984); B-230304, March 18, 1988.

13See, e.g., 62 Comp. Gen. 617 (1983).
B-286107

Page 15 GAO/RCED-00-274 Pork Promotion Program

As recommended by the Secretary’s task force, a uniform petition and 

validation process that is based on professional standards would increase 

AMS’ ability to successfully validate future petitions. AMS will need to 

obtain technical advice from experienced methodologists when developing 

a validation process to ensure that it is sound. Furthermore, a publicized 

uniform process will improve interested parties’ understanding of AMS’ 

petition process. These actions will enhance AMS’ credibility in validating 

future petitions. Without improvements to its validation process, AMS will 

likely experience similar problems as it validates the beef petition and 

other future petitions. 

Recommendations for 

Executive Action

To strengthen AMS’ petition validation process, we recommend that the 

Secretary of Agriculture direct the Administrator of AMS to develop a 

uniform petition validation process for pork and all other check-off 

programs that is based on standard professional practices.

Furthermore, to ensure compliance with the Pork Promotion Act, we 

recommend that the Secretary direct the Administrator of AMS to obtain 

reimbursement from pork check-off funds to pay all referendum expenses.

Agency Comments We provided a draft of this report to USDA officials for their review and 

comment. We met with the AMS Administrator and Associate 

Administrator. These officials agreed with the report’s findings and 

provided us with technical comments, which we incorporated as 

appropriate. The officials also agreed with the conclusions and 

recommendations.

Scope and 

Methodology

To identify and assess the major problems AMS encountered in validating 

the pork petition and corrective actions, we reviewed AMS’ approach for 

validating the petition and compared this approach with professional 

practices. We also interviewed officials from USDA’s Office of the Secretary 

and AMS and reviewed relevant documents.

To determine the key factors leading to the Secretary’s decision to order a 

referendum, we submitted questions and obtained a written response from 

the Secretary of Agriculture on the basis for his decision. We also 

interviewed officials with USDA’s Office of the Secretary, Office of General 
B-286107

Page 16 GAO/RCED-00-274 Pork Promotion Program

Counsel, and AMS, as well as leaders of NPPC and the Campaign for Family 

Farms.

To examine the authority of the Secretary of Agriculture to order a 

referendum on the pork check-off program and to use appropriated funds 

to pay its costs, we conducted a statutory review and legal analysis of 

relevant laws, including the (1) Pork Promotion Act and related legislative 

history, (2) appropriations law and principles, and (3) other relevant laws 

and cases. In addition, as part of our legal analysis, we interviewed officials 

from USDA’s Office of the Secretary, Office of General Counsel, and AMS. 

We also collected and analyzed relevant documentation.

We conducted our review from June through August 2000 in accordance 

with generally accepted government auditing standards.

We are sending copies of this report to the Honorable Richard G. Lugar, 

Chairman, and the Honorable Tom Harkin, Ranking Minority Member, 

Senate Committee on Agriculture, Nutrition, and Forestry; the Honorable 

Larry Combest, Chairman, and the Honorable Charles W. Stenholm, 

Ranking Minority Member, House Committee on Agriculture; the 

Honorable Dan Glickman, Secretary of Agriculture; the Honorable Jacob J. 

Lew, Director of Office of Management and Budget; and other interested 

parties. We will also make copies available to others upon request.

Please contact me at (202) 512-5138 if you or your staff have any questions 

about this report. Key contributors to this report are listed in appendix III.

Lawrence J. Dyckman

Director, Food and

Agriculture Issues
B-286107

Page 17 GAO/RCED-00-274 Pork Promotion Program

List of Congressional Requesters

The Honorable Thomas W. Ewing

The Honorable James A. Barcia

The Honorable J. Dennis Hastert

The Honorable Roy Blunt

The Honorable Bill Barrett

The Honorable John A. Boehner

The Honorable Leonard L. Boswell

The Honorable Steve Buyer

The Honorable Ken Calvert

The Honorable Dave Camp

The Honorable Ernie Fletcher

The Honorable Greg Ganske

The Honorable Gil Gutknecht

The Honorable David L. Hobson 

The Honorable Peter Hoekstra

The Honorable John N. Hostettler

The Honorable Asa Hutchinson

The Honorable Marcy Kaptur

The Honorable Ray LaHood

The Honorable Steve Largent

The Honorable James A. Leach

The Honorable Ron Lewis

The Honorable Donald A. Manzullo

The Honorable Jim Nussle

The Honorable Michael G. Oxley

The Honorable Bob Schaffer

The Honorable John Shimkus

The Honorable Debbie Stabenow

The Honorable Lee Terry

The Honorable Fred Upton

The Honorable Ed Whitfield

House of Representatives
Page 18 GAO/RCED-00-274 Pork Promotion Program

Appendix I

Chronology of Steps in AMS' Process to Apendxies

Validate the Pork Check-off Petition ApendxiI

1997 1998 1999

Petition Form Development and 

Approval: CFF corresponded with 

LSP about requirements for a 

referendum on the pork check-off 

program. LSP approved the 

design of CFF's petition forms.

Chronology of Steps in AMS' Process to Validate the Pork Check-off Petition

May 29, 1997-July 9,1998

Determination of the 15-Percent 

Threshold Needed to Trigger a 

Referendum: AMS estimated 

99,909 eligible pork producers, 

thus determining that 14,986 

petitions would meet the 

15-percent threshold.a

March 23, 1999

Petitions Submitted: CFF 

submitted petitions to AMS.

May 24, 1999

Petition Count: LSP counted 

19,043 petitions.

June 15, 1999

Data Entry to Create an 

Electronic Database: A data 

entry firm keypunched data from 

the petition cards and forms into 

an electronic database.

July 20, 1999

March May June July

AMS Agricultural Marketing Service

CFF Campaign for Family Farms

LSP Livestock and Seed Programs (a division within AMS)

NPPC National Pork Producers Council

Development of Petition Validation Procedures: LSP developed petition validation 

procedures. AMS' internal auditors reviewed and approved early drafts of the 

procedures. However, in September 1999, LSP revised the procedures without 

informing the internal auditors.

May 25, 1999-October 26, 1999
Appendix I

Chronology of Steps in AMS' Process to 

Validate the Pork Check-off Petition

Page 19 GAO/RCED-00-274 Pork Promotion Program

1999 continued

October December

Chronology of Steps in AMS' Process to Validate the Pork Check-off Petition (continued)

Telephone Survey to Verify Signatures and Eligibility: 

To confirm that the person listed signed the petition and 

was a hog producer and seller during the representative 

period, LSP contracted with a telephone polling firm to 

conduct a telephone survey of a random sample of 2,500 

petitioners. Of 1,339 respondents, 911 answered "yes" 

to all questions and 428 answered "no" or gave a non 

positive response to having signed or answered "no" to 

being a hog producer and seller during the period. 122 

additional individuals refused to answer the questions. 

The polling firm was unable to contact the other 1,039 

petitioners.

Some AMS officials became concerned about the high 

number of negative responses. Explanations included the 

timing of the calls during harvest season and the possibility 

that those being surveyed did not believe the polling firm 

was acting under USDA's authority.d

October 15, 1999 - November 3, 1999

Attempt to Resolve Data Entry and Database Review 

Problems: On Nov. 5, AMS' internal auditors notified LSP that 

they intended to suspend temporarily their verification of LSP's 

work due to their findings of a high data entry error rate and 

insufficient documentation for decisions made in the database 

review phase. 

The internal auditors were asked to redo their data entry 

review. The second review found 119 errors in a random 

sample of 400 petitions. 

The internal auditors sent a December 1 draft memo to 

the Administrator stating that the high data entry error rate 

tainted the subsequent database review and might have 

adversely affected the telephone survey. They also outlined 

their concerns about the database review, including inconsistent 

decisions by LSP and a lack of procedural documentation. 

The memo included three options available to AMS: (1) start 

over using the same process; (2) start over with a new process; 

or (3) work with existing data while recognizing the flaws. 

AMS chose the third option.

November - December 1999

November

AMS Agricultural Marketing Service

CFF Campaign for Family Farms

LSP Livestock and Seed Programs (a division within AMS)

NPPC National Pork Producers Council

Database Review to Remove Invalid 

Petitioners: LSP identified duplicates, 

unsigned petitions, and petitions not signed 

during the 13-month representative period that 

began on April 24, 1998, thus eliminating 

1,349 petitions. 17,694 petitions remained.c 

September - October 1999

Data Entry Verification: In comparing 

a sample from the database to the 

petition cards and forms, LSP found a 

data entry error rate of about 2 percent, 

which was within AMS' established 

standard of 95-percent accuracy.b

September 9, 1999

September
Appendix I

Chronology of Steps in AMS' Process to 

Validate the Pork Check-off Petition

Page 20 GAO/RCED-00-274 Pork Promotion Program

2000

Chronology of Steps in AMS' Process to Validate the Pork Check-off Petition (continued)

Secretary's Meetings 

With CFF and NPPC: 

The Secretary met separately 

with CFF and NPPC. He asked 

them to prepare written criticisms 

of LSP's validation process.

January 31, 2000

NPPC's Letters to the Secretary: 

NPPC's February 2 letter outlined 

inconsistencies in AMS' practices and 

decision-making. It stressed that the 

Secretary can only call a referendum if 

15 percent of bona fide hog producers 

sign the petition. NPPC supported

the validity of the telephone survey. 

NPPC's February 16 follow-up letter presented 

five key points: (1) a statistically valid survey 

had determined that the petition fell short of 

the required 14,986 signatures; (2) USDA's 

process was open and transparent; (3) USDA 

made accommodations to the referendum 

proponents; (4) the petition fell short of the 

required number of signatures even without 

verifying documentation; and (5) the Secretary 

does not have authority to hold a referendum 

without a 15-percent threshold.

February 2, 2000 and February 16, 2000

Preliminary Telephone and 

Letter Survey Results: 

Based on the survey results, 

AMS statisticians projected 

with 95-percent confidence 

that the number of validated 

petitions was no larger than 

13,6961,290 less than the 

required 14,986. However, 

these results were preliminary 

as AMS had not completed 

the validation process.

January 31, 2000

February

AMS Agricultural Marketing Service

CFF Campaign for Family Farms

LSP Livestock and Seed Programs (a division within AMS)

NPPC National Pork Producers Council

AMS Meeting With CFF and 

NPPC: AMS met with CFF 

and NPPC to share information 

about the validation procedures. 

January 5, 2000

Letter to the Telephone Survey's "No" Respondents: 

Due to AMS' concerns that a substantial number of hog 

producers, 428, answered "no" or gave a non positive 

response to the telephone polling firm, it sent letters to 

these 428 individuals that asked the telephone survey 

questions and requested documentation for proof of 

being a hog producer and seller. AMS received 96 

"yes" responses to bring the total number of sampled 

producers who said they signed the petiiton and were 

a producer to 1,007.e

December 10, 1999 - January 10, 2000

January

1999 continued
Appendix I

Chronology of Steps in AMS' Process to 

Validate the Pork Check-off Petition

Page 21 GAO/RCED-00-274 Pork Promotion Program

February

2000 continued

Chronology of Steps in AMS' Process to Validate the Pork Check-off Petition (continued)

Secretary's Decision Memo: 

The memo announced his 

decision to call for a referendum.

February 25, 2000

Secretary's Decision 

Announcement: The Secretary 

formally announced his decision 

at the annual meeting of the 

National Farmers Union in 

Salt Lake City, Utah.

February 28, 2000

Internal Auditors' Memo to 

LSP: The memo concluded 

that AMS could not conclusively 

determine the number of valid 

petitions and officially ended 

their review.

April 21, 2000

April

Secretary's Meeting With 

AMS Administrator: The 

Secretary informed the 

Administrator that he intended 

to call for a referendum.

February 24, 2000

AMS Agricultural Marketing Service

CFF Campaign for Family Farms

LSP Livestock and Seed Programs (a division within AMS)

NPPC National Pork Producers Council

AMS Administrator's Meeting 

With Internal Auditors: The internal 

auditors briefed the Administrator on 

their findings, which included faulty 

data entry and inconsistencies in 

handling duplicates.

February 23, 2000

CFF's Letter to the Secretary: 

CFF presented arguments for 

holding a referendum, offering 

process flaws and criticisms of 

the telephone survey. 

Appendixes included complaints 

from recipients of the telephone 

survey and four analyses of 

AMS' methodology from social 

scientists, each of whom 

criticized the telephone survey.

February 18, 2000
Appendix I

Chronology of Steps in AMS' Process to 

Validate the Pork Check-off Petition

Page 22 GAO/RCED-00-274 Pork Promotion Program

a

The Agricultural Marketing Service (AMS) based its estimate of the number of eligible pork producers 

and importers on the U.S. Department of Agriculture's (USDA) National Agricultural Statistical 

Service's 1998 estimate of farms with hogs or pigs, adjusted to remove farms that did not sell hogs or 

pigs, as well as Customs Service information on hog, pig, and pork importers.

b

AMS' internal auditors subsequently found much higher data entry error rates in samples examined in 

October 1999 (8 errors in a sample of 60 petitions) and November 1999 (119 errors in a sample of 400 

petitions).

c

In November 1999, internal auditors found that LSP—in conducting its database review—had not 

followed written guidelines and not documented why it had eliminated, or not eliminated, potential 

duplicates or other invalid petitions.

d

The internal auditors reviewed the polling firm's calling methods and found them adequate. They also 

found no pattern of fraud among the 428 “no” respondents.

e

AMS did not contact the 1,039 individuals who did not respond to the telephone survey.
Page 23 GAO/RCED-00-274 Pork Promotion Program

Appendix II

The Secretary of Agriculture’s Authority to 

Order a Referendum and Use Appropriated 

Funds ApendxiI

The Pork Promotion, Research, and Consumer Information Act of 19851

(the Pork Promotion Act), which authorizes the pork check-off program, 

requires the Secretary of Agriculture to conduct a referendum when 

requested by 15 percent of program participants, but it does not address 

whether the Secretary has the authority to conduct a referendum at his 

own discretion (a discretionary referendum). Program participants 

requested a referendum, but USDA could not be certain that those 

requesting the referendum represented 15 percent of program participants. 

However, in February 2000, the Secretary called for a discretionary 

referendum to determine whether program participants favor the 

continuation of the pork check-off program. This referendum was held on 

September 19-21, 2000. USDA plans to use appropriated funds to pay the 

referendum costs.

Members of the House of Representatives requested us to examine: (1) 

whether the Secretary has the legal authority to call for a discretionary 

referendum to determine whether a majority of participants wish to 

continue the program and (2) whether USDA can use taxpayer funds to pay 

the referendum costs. 

In our view, the Secretary has implied authority, based on his authority to 

terminate the pork check-off program, to conduct a discretionary 

referendum under the Pork Promotion Act. We also find that the Secretary 

must use assessments collected by the National Pork Board under the Pork 

Promotion Act for referendum expenses. 

Background The Pork Promotion Act authorizes the Secretary to issue and amend, as 

well as suspend or terminate, orders implementing a pork promotion and 

research program. This program, commonly referred to as the pork checkoff program, is financed by an assessment paid by the pork producers and 

importers who are participants in the program. The order implementing the 

pork check-off program was effective September 5, 1986, and assessments 

were collected beginning November 1, 1986. The Secretary conducted the 

required initial referendum2

 on September 7-8, 1988. At that time, 77.5 

percent of voting producers and importers favored continuing the program. 

1

Pub. L. No. 99-198, sections 1611-1631, 99 Stat. 1354, 1606-22 (1985), codified at 7 U.S.C. 

sections 4801-4819.

2

See 7 U.S.C. section 4811(a).
Appendix II

The Secretary of Agriculture’s Authority to 

Order a Referendum and Use Appropriated 

Funds

Page 24 GAO/RCED-00-274 Pork Promotion Program

This initial referendum is the only pork referendum USDA has conducted 

to date. 

In May 1999, USDA’s Agricultural Marketing Service (AMS) received a 

request for a referendum with 19,043 signatures on it. Under the Pork 

Promotion Act, the Secretary is required to conduct a referendum if he 

receives a request from at least 15 percent of eligible participants. 7 U.S.C. 

section 4812(b). USDA later concluded that it could not be certain of the 

exact number of valid signatures. In late February 2000, the Secretary 

called for a referendum at the Department’s expense “in the interest of 

fairness,” because “many thousands of valid signatures were received.”3

Secretary Has the Legal 

Authority to Conduct a 

Referendum

The first issue for consideration is whether the Secretary has the legal 

authority to call for a discretionary referendum. The Pork Promotion Act 

requires the Secretary to conduct certain referendums, including the initial 

referendum, to determine if participants wish to continue the program and 

subsequent referendums when 15 percent of program participants request 

it.4

 However, the act is silent regarding the Secretary’s authority to conduct 

a discretionary referendum. The legislative history of the Pork Promotion 

Act is also silent and provides no insight on this matter.

According to USDA, the Secretary’s legal authority to conduct a 

discretionary referendum stems from 7 U.S.C. section 4812(a). This section 

of the Pork Promotion Act provides that if “the Secretary determines that 

an order, or a provision of the order, obstructs or does not tend to 

effectuate the declared policy of this chapter, the Secretary shall terminate 

or suspend the operation of such order or provision.” 7 U.S.C. section 

4812(a). USDA believes this provision gives the Secretary implied authority 

to call for a discretionary referendum, since it may help inform his decision 

whether to terminate the program. 

3

Pork Promotion, Research, and Consumer Information Program: Procedures for the 

Conduct of Referendum, 65 Fed. Reg. 43,498, 43,501 (2000) (to be codified at 7 C.F.R. pt. 

1230).

4

7 U.S.C. sections 4811(a), 4812(b).
Appendix II

The Secretary of Agriculture’s Authority to 

Order a Referendum and Use Appropriated 

Funds

Page 25 GAO/RCED-00-274 Pork Promotion Program

There is no indication that the Congress either granted or denied authority 

to conduct a discretionary referendum in the pork check-off program. The 

Congress passed the Pork Promotion Act as part of the Food Security Act 

of 1985,5

 which also included the Watermelon Research and Promotion Act 

of 19856

 and the Beef Promotion and Research Act of 1985.7 The 

Watermelon Act contains explicit language authorizing the Secretary to 

conduct discretionary referendums: “[t]he Secretary may conduct a 

referendum at any time.” 7 U.S.C. section 4913. The Beef Promotion and 

Research Act amended the Beef Research and Information Act, eliminating 

language that explicitly granted the Secretary authority to conduct 

discretionary referendums as well as a termination provision similar to that 

in the pork check-off program. The Congress enacted these varying 

referendum provisions in the same public law, which could arguably 

indicate a congressional intent to deny the Secretary this authority in the 

pork check-off program. 

However, the agricultural promotion programs enacted by the Congress are 

distinct programs with many varying provisions, making it difficult to 

analogize from one program to another. Some agricultural promotion acts 

provide explicit authority to conduct discretionary referendums, while 

others do not.8

 Neither the acts nor legislative history provide information 

or a basis for distinguishing why referendums are explicitly provided for in 

some promotion programs and not in others. None of the statutes 

authorizing agricultural promotion programs prohibit the Secretary from 

conducting a discretionary referendum, nor do they clarify the precise 

topic at hand—whether the Secretary’s termination authority in the pork 

check-off program provides the Secretary with the authority to conduct a 

discretionary referendum. 

Focusing on the statutory provision at issue, we note that the Secretary has 

explicit authority to suspend or terminate the pork check-off program 

5

Pub. L. No. 99-198, sections 1611-1631, 99 Stat. 1354, 1606-22 (1985).

6

Id., sections 1641-1657, 99 Stat. at 1622-30.

7

Id., section 1601, 99 Stat. at 1597-1606.

8

For example, the Secretary “may conduct a referendum at any time” under the cotton (7 

U.S.C. section 2108(b)), eggs (7 U.S.C. section 2709), and potatoes (7 U.S.C. section 2624) 

promotion programs. Other programs, including mushrooms (7 U.S.C. sections 7481-7491), 

popcorn (7 U.S.C. sections 6301-6311), and honey (7 U.S.C. sections 6101-6112) do not have 

this language.
Appendix II

The Secretary of Agriculture’s Authority to 

Order a Referendum and Use Appropriated 

Funds

Page 26 GAO/RCED-00-274 Pork Promotion Program

when he determines that it is not effectuating declared policy. 7 U.S.C. 

section 4812(a). The Secretary’s ultimate power to terminate necessitates 

the authority to inform his decision. To make such a decision, the Secretary 

has the authority to gather the information he needs. The Pork Promotion 

Act, however, does not explicitly state how the Secretary should determine 

whether the program is effectuating the underlying policy, nor does it have 

a declared policy section. 

Although the Pork Promotion Act lacks a statement of declared policy, it 

does have a section outlining the purpose of the act.9

 Section 4801(b) states 

that the purpose of the pork check-off program is

“to authorize the establishment of an orderly procedure for financing, through adequate 

assessments, and carrying out an effective and coordinated program of promotion, 

research, and consumer information designed to—

(A) strengthen the position of the pork industry in the marketplace; and (B) maintain, 

develop, and expand markets for pork and pork products.”

7 U.S.C. section 4801(b)(1). This purpose section addresses the 

effectiveness of the program. It is reasonable for the Secretary to consider 

the program participants’ view of whether the program is effective in 

attaining the goals, for example, of strengthening the position of the pork 

industry and maintaining markets. From a statutory analysis perspective, 

there is little difference between the Secretary’s obtaining this information 

by referendum or another method, such as sending letters to participants 

requesting their input. 

The support of program participants could also be considered one of the 

policy goals of the pork check-off program. Participant support is 

fundamental to agricultural promotion programs. Participants’ 

assessments pay for the program, not federal funds. Participants nominate 

and elect the delegate body, which, in turn, nominates the National Pork 

Board. Participants first show their support via an initial referendum and 

show their continued support through subsequent referendums. Moreover, 

the concept that participant support is essential to an agricultural 

9

The “purposes” section appears in the same place as did the declared policy in the dairy 

promotion act. See 7 U.S.C. section 602. The pork check-off program was crafted using the 

language of the dairy promotion program. H.R. Rep. No. 271, 99th Cong., 1st Sess., pt.1, at 

1561-62 (1985). Arguably then, what the Congress intended as the “declared policy” of the 

Pork Promotion Act is reflected in the stated purpose of the pork check-off program.
Appendix II

The Secretary of Agriculture’s Authority to 

Order a Referendum and Use Appropriated 

Funds

Page 27 GAO/RCED-00-274 Pork Promotion Program

promotion program’s effectiveness has been cited before. In the final rule 

terminating the Tokay grapes promotion program, USDA stated, “The 

Secretary of Agriculture has determined that the marketing order no longer 

tends to effectuate the declared policy of the Act because continuance of 

the program is no longer supported by growers.” 60 Fed. Reg. 33679, 33679 

(June 29, 1995). A referendum is a reasonable method to use in determining 

participant support. Thus, a referendum is one way the Secretary could 

determine if the pork check-off program effectuates the policy of the act.

The Congress gave the Secretary broad discretion in how to determine 

whether the pork check-off program is effectuating its declared policy. The 

Congress did not specify when the program would not be effectuating the 

declared policy, nor did it state what constituted the declared policy. 

Moreover, the decision is not of such great economic magnitude that the 

Congress would be unlikely to delegate it to the Secretary.10 The annual 

impact of the entire pork check-off program is less than $100 million.11

According to the final rule ordering the pork referendum, the economic 

costs were not major.12

10In determining whether the Congress has addressed an issue, e.g., discretionary 

referendums, one of the considerations is the economic and political magnitude of the 

decision and the manner in which the Congress would likely delegate such a decision. 

According to the Supreme Court, “Congress is more likely to have focused upon, and 

answered, major questions, while leaving interstitial matters to answer themselves in the 

course of the statute’s daily administration.” FDA v. Brown & Williamson Tobacco Corp., 

__U.S.__, 120 S. Ct. 1291, 1314 (2000).

11Pork Promotion, Research, and Consumer Information Order, 51 Fed. Reg. 31898, 31898 

(1986) (codified at 7 C.F.R. pt. 1230).

1265 Fed. Reg. 43498, 43499 (2000). 
Appendix II

The Secretary of Agriculture’s Authority to 

Order a Referendum and Use Appropriated 

Funds

Page 28 GAO/RCED-00-274 Pork Promotion Program

USDA’s interpretation of the Secretary’s termination authority as including 

the authority to conduct a discretionary referendum is not new. The 1986 

rule establishing the pork check-off program states, “The Secretary is also 

authorized to conduct periodic referenda to determine whether a 

termination or suspension of the order is warranted.”13 The Secretary 

called for this referendum “in the interest of fairness,” because “many 

thousands of valid signatures were received” from pork producers and 

importers requesting a referendum.14 The final rule for the pork referendum 

states that “[s]upport of the program by a majority of persons who pay 

assessments is essential to both the establishment and the continuation of 

this program.”15 The referendum outcome provides a way for the Secretary 

to determine if the pork check-off program is meeting its policy goals. If a 

majority of the referendum voters favor termination, the Secretary stated 

that the pork assessment collections would end no later than 30 days after 

that determination and the check-off program would be terminated as soon 

as practical.16

The Supreme Court has established that when the Congress has not 

specifically addressed an issue, then the implementing agency’s 

interpretation should prevail so long as it is reasonable.17 The Congress did 

not address discretionary referendums. Nor did it specify how the 

Secretary should determine whether the pork check-off program was 

effectuating its declared policy or even what constitutes that declared 

policy. However, the Congress recognized the importance of having the 

support of program participants by requiring an initial referendum. 7 U.S.C. 

section 4811(a). The pork check-off program is supported by participant 

assessments, so it is reasonable that participants have a voice in 

determining the program’s effectiveness. The program may not be effective, 

and may not be effectuating its policy, if it does not have the support of a 

majority of participants. The Secretary’s decision to conduct a referendum 

to inform his decision on whether to terminate the pork check-off program 

1351 Fed. Reg. 31898, 31898 (1986).

1465 Fed. Reg. 43,498, 43,501 (2000).

15Id.

16Id.

17FDA v. Brown & Williamson Tobacco Corp., __U.S.__, 120 S. Ct. 1291 (2000); Chevron, 

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). 
Appendix II

The Secretary of Agriculture’s Authority to 

Order a Referendum and Use Appropriated 

Funds

Page 29 GAO/RCED-00-274 Pork Promotion Program

is a reasonable one. Thus the Secretary, in our view, has implied authority 

to conduct this referendum. 

Secretary Must Use 

Pork Check-off Funds 

to Pay Referendum 

Expenses

USDA has stated that it will use its section 32 appropriation to cover 

referendum expenses. Section 32 of the Act of August 24, 1935 (7 U.S.C. 

section 612c) appropriates funds to encourage exportation and domestic 

consumption of agricultural products.18 Under AMS’ annual appropriation, 

“Funds for Strengthening Markets, Income and Supply,” AMS may use the 

section 32 appropriation “for commodity program expenses as authorized 

therein, and other related operating expenses.” Pub. L. No. 106-78, 113 Stat. 

1135, 1144 (1999). USDA broadly interprets the permissible use of these 

funds for “other related operating expenses” to include anything that 

promotes farm income and farm marketing, including, in this case, the 

referendum expenses. 

While an agency has reasonable discretion in carrying out an appropriation, 

the expenditure must not fall within the scope of some other appropriation 

or statutory funding scheme. See 63 Comp. Gen. 422, 427-28 (1984); B230304, March 18, 1988. Under this principle, the Secretary may not use the 

section 32 appropriation for referendum expenses. USDA states that it is 

conducting the referendum based on its authority to terminate the program 

in section 4812(a). Expenses for a referendum conducted under section 

4812, however, are explicitly provided for in another statutory funding 

scheme. The Pork Promotion Act specifically requires that a referendum 

conducted by the National Pork Board. 7 U.S.C. section 4811(c). 

18The Secretary may use these funds to “(1) encourage the exportation of agricultural 

commodities and products thereof by the payment of benefits in connection with the 

exportation thereof or of indemnities for losses incurred in connection with such 

exportation or by payments to producers in connection with the production of that part of 

any agricultural commodity required for domestic consumption; (2) encourage the domestic 

consumption of such commodities or products by diverting them, by the payment of 

benefits or indemnities or by other means, from the normal channels of trade and commerce 

or by increasing their utilization through benefits, indemnities, donations or by other means, 

among persons in low income groups as determined by the Secretary of Agriculture; and (3) 

reestablish farmers’ purchasing power by making payments in connection with the normal 

production of any agricultural commodity for domestic consumption. Determinations by the 

Secretary as to what constitutes diversion and what constitutes normal channels of trade 

and commerce and what constitutes normal production for domestic consumption shall be 

final.” 7 U.S.C. section 612c. 
Appendix II

The Secretary of Agriculture’s Authority to 

Order a Referendum and Use Appropriated 

Funds

Page 30 GAO/RCED-00-274 Pork Promotion Program

Moreover, all pork check-off program expenses are to be paid from 

assessments. The Pork Promotion Act states that the pork check-off 

program “shall be conducted, at no cost to the Federal Government.” 7 

U.S.C. section 4801(b)(2). When the Congress authorized the appropriation 

of funds for the Secretary to carry out the pork check-off program, it made 

the appropriation “subject to reimbursement from the National Pork Board 

under section 4809(c)(3)(B)(iv).” 7 U.S.C. section 4819. Section 

4809(c)(3)(B)(iv) requires that the National Pork Board use assessment 

funds for “administrative costs incurred by the Secretary to carry out [the 

Pork Promotion Act], including any expenses incurred for the conduct of a 

referendum.” Thus, not only does the Pork Promotion Act require all 

program expenses to be paid from pork check-off funds, but it also 

specifically mentions in two separate sections that referendum expenses 

should be paid from pork check-off funds.

These specific statutory provisions cannot be overcome by the more 

general section 32 appropriation. See, e.g., 62 Comp. Gen. 617, 617 (1983). 

Referendum expenses are not explicitly mentioned in the general 

appropriation but are provided for under the provisions of the Pork 

Promotion Act. Accordingly, the Secretary must not use the section 32 

appropriation, but must follow the statutory funding scheme and be 

reimbursed from pork assessments to pay referendum expenses. 
Page 31 GAO/RCED-00-274 Pork Promotion Program

Appendix III

GAO Contacts and Staff Acknowledgments ApendxiI

GAO Contacts Lawrence J. Dyckman, (202) 512-5138

Andrea Brown, (202) 512-5138

Susan Poling, (202) 512- 5400

Acknowledgments In addition to those named above, Gary Brown, Thomas Cook, Ruth Anne 

Decker, Arthur L. James, Jr., Mitch Karpman, Carol Herrnstadt Shulman, 

and Amy Webbink made key contributions to this report.

(150189) Letr
Ordering Information The first copy of each GAO report is free. Additional copies of 

reports are $2 each. A check or money order should be made out to 

the Superintendent of Documents. VISA and MasterCard credit 

cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address are 

discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

Orders by visiting:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders by phone:

(202) 512-6000

fax: (202) 512-6061

TDD (202) 512-2537

Each day, GAO issues a list of newly available reports and 

testimony. To receive facsimile copies of the daily list or any list 

from the past 30 days, please call (202) 512-6000 using a touchtone 

phone. A recorded menu will provide information on how to obtain 

these lists.

Orders by Internet:

For information on how to access GAO reports on the Internet, 

send an e-mail message with “info” in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web home page at: 

http://www.gao.gov

To Report Fraud, 

Waste, or Abuse in 

Federal Programs

Contact one:

• Web site: http://www.gao.gov/fraudnet/fraudnet.htm

• e-mail: fraudnet@gao.gov

• 1-800-424-5454 (automated answering system)

United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Correction Requested

Bulk Rate

Postage & Fees Paid

GAO

Permit No. GI00