WASHINGTON, DC - After reviewing more than 950 comments about the proposed Hardwood Checkoff published in the Federal Register on November 13, 2013, the USDA’s Agricultural Marketing Service (AMS) has elected not to proceed further on the proposal . This decision was made based on the lack of industry support and overwhelming substantive concerns with the proposal. That information was communicated by USDA to both the proponents and opponents of the Checkoff at the end of 2014.

Jeff Edwards of Edwards Wood Products and co-chair of the opposition group, US Hardwood Lumber Industry Coalition, notes that the vast majority of those comments submitted to USDA were in opposition. According to Edwards, “USDA indicated that the opponents of the Checkoff offered substantive, insightful and valid criticisms of the proposed Checkoff’s structure.”

“Out of respect for allowing the process to be completed, the US Hardwood Industry Coalition chose not to discuss publically the information communicated to us by USDA in December,” said Jeff Hanks of Bill Hanks Lumber and also co-chairman of the US Hardwood Industry Coalition. “However, a recent press statement by the proponent group, the Hardwood Checkoff Committee, asserting that the proposed Checkoff “has been given a ‘green light’ for further action” has compelled us to set the record straight,” stated Hanks.

In an attempt to bring more clarity to the process, the US Hardwood Industry Coalition submitted a letter to the USDA’s Agriculture Marketing Service on December 18, 2014. That letter requested that the agency withdraw and publish termination notices on the proposed Checkoff for the sake of procedural clarity. As noted in the letter, since the comment period on the current proceeding ended on February 18, 2014, a prohibition on ex parte communications has been in place. Under federal rulemaking procedures, ex parte communications are any discussions between agency decision makers and stakeholders regarding the substance of an agency’s proposed rule. Thus all parties are prevented from discussing with AMS any ideas or concepts for, or modifications to the Checkoff.

As the Coalition stated in its letter, “we believe that AMS would want to work with all parties to possibly achieve a new proposal that might be supported by a majority of the industry. If discussion with AMS is precluded, this cannot happen.” It is for this reason that the Coalition requested that AMS officially terminate the proposal promulgated in 2013.

To put the Checkoff debate in context, such a program for the hardwood industry has been discussed for more than 20 years, starting with a 1993 effort by the National Hardwood Lumber Association. After polling its membership, the Association abandoned the effort in 1995 and never submitted a plan to USDA. In 2010, with the support of the US Endowment for Forestry and Communities, an ad hoc group of 14 industry players organized as the Blue Ribbon Committee, launched the effort which lead to the Checkoff proposal published in the Federal Register in 2013.

“The recent statement from the Checkoff proponents suggests we are about to embark on a third round of discussion and debate,” said Jeff Edwards. He continued, “The hardwood Checkoff concept has been so divisive that most major trade associations in the industry have avoided taking a position because of the contentious nature of the debate.” Moreover, a number of major industry associations are on record in opposition to the Checkoff.

“Quite frankly, the proponents have not made a convincing case of the benefits of a Checkoff for the industry,” said Jeff Hanks. “It’s almost like we’re being asked to buy an insurance policy where we know what the premium is, but aren’t being told what the coverage will be,” Hanks said.

The US Hardwood Industry Coalition is comprised of hardwood lumber manufacturers nationwide who oppose USDA’s most recently published Checkoff proposal. In May of 2014, the Coalition commissioned a telephone research study about industry attitudes towards the Checkoff. Conquest Communications of Richmond, Virginia, questioned hardwood lumber manufacturers identified by a list from USDA of eligible companies to vote in any referendum on the Checkoff. A total of 257 companies responded. That group represents 18 percent of the total 1,434 companies eligible to vote on USDA’s proposed check-off, which is a statistically representative sample of all hardwood lumber manufacturers.

According to the research results, five percent of the respondents support the check off program. An additional 12 percent indicate their openness to consider supporting an industry check-off program given modifications to the proposal put forth by USDA. More than 19 percent were unsure of the check off program, despite reported efforts by Checkoff proponents to publicize the potential upcoming industry referendum on the proposal. When presented with the question, “as the USDA check off proposal is written, do you plan to vote for it or against it?” a total of 83 percent of respondents indicated they would vote against the check off program.

The US Hardwood Industry Coalition believes that after more than two decades of debate – with the last five years being particularly intense, and, at times, distracting – that it is time for America’s hardwood manufacturers to get back to work supplying a growing and dynamic market. Indeed, hardwood exports are now at an all-time high and a growing US economy is driving expanded domestic sales of US hardwood.

Source: US Hardwood Industry Coalition

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