Friday, April 30, 2004 PERMALINK: Permanent link to archive for 4/30/04.

The Incredible Inedible checkoff

Our animated little thinker  Almost every food commodity produced in the U.S. has a promotion board associated with it. The boards were each established by congressional legislation, usually at the request of processors of each commodity, and those boards are supported by "checkoffs"... mandatory fees collected from producers. You've seen the advertising campaigns from some of these boards:

  • Got Milk?
  • Beef - it's whats for dinner
  • The Incredible Edible Egg
  • Pork - the other white meat

Here's a swell list of legislative acts that produced them:

  • The Egg Research and Consumer Information Act of 1974
  • The Dairy Production Stabilization Act of 1983
  • The Honey Research, Promotion and Consumer Information Act of 1984 
  • The Beef Promotion and Research Act of 1985
  • The Pork Promotion, Research and Consumer Information Act of 1985
  • The Watermelon Research and Promotion Act of 1985
  • The National Fluid Milk Processor Act of 1990
  • The Soybean Promotion and Research Act of 1991
  • The Commodity, Promotion, Research and Information Act of 1996
  • The Popcorn Promotion, Research and Consumer Information Act of 1996

The Secretary of Agriculture appoints board members (great reward for political supporters), and the USDA has sole oversight over what the checkoff money is used for.

Beef and Pork producers have been challenging the checkoffs, because they don't think they serve their interests... they're not getting their moneys worth out of what they're forced to pay. First they tried to get their boards to reduce the checkoff amounts... a reasonable approach... if you know nothing about government organizations. One characteristic of government-related programs is that they can never be reduced, much less eliminated.

Thwarted by their compromise approach, the producers went to court, and both beef and pork (and alligator!) producers have received court decisions that the checkoffs are unconstitutional. I think it used to be called "taxation without representation". Naturally, those decisions have been appealed to the U.S. Supreme Court by the U.S. Department of Agriculture.

Will the Supremes hear and overrule the Appeals Court decisions? Based on some recent decisions, it's hard to tell. If the Supreme Court decides not to hear the cases, letting stand the ruling of unconstitutional, does that mean the checkoffs will be gone? Personally, I doubt it. Between a Congress manipulated by moneyed interests and the USDA with similar connections, I imagine they will find a way around any court decision that doesn't please their beneficent constituents.

Like most government programs, it isn't that the boards do no good, but rather that they waste money extravagantly, have unintended consequences, and almost always benefit those who least need it, at the expense of those who can't afford it.

Money, and a lot of it. Fifteen cents per hundred pounds of milk, $1 per head of cattle, etc. Here are the boards and their annual incomes from checkoffs:

National Cattlemen's Beef Association - $80 million

The National Pork Board - $50 million

Popcorn Board  (as you might expect, this website is truly "corny")

United Soybean Board - $80 million

National Watermelon Promotion Board - $1.7 million

National Peanut Board (unknown $, but probably just peanuts)

Honey Board - $3.34 million

American Egg Board - $14 million

National Dairy Promotion and Research Board - $76.5 million

National Fluid Milk Processor Promotion Board - $110 million - featuring Fefe Dobson "Cool. That's how I like my music and my milk" and with Paris Hilton drinking hot milk on gotmilk.com and T-Mac (Tracy McGrady) of the Orlando Magic. I don't drink milk, but if I did, that would be enough to make me stop.

Producers and importers of cotton and mushrooms also pay assessments and there are programs for apples, avocados, blueberries, fish, forestry products, fresh asparagus, kiwi fruit, macadamia nuts, olive oil and sweet corn being formed.

The USDA is yet one more albatross created by Abraham Lincoln... a millstone around the necks of farmers, ranchers, and citizens as a whole. For a century, they've been touting "family farms", evoking an image of an idyllic lifestyle that is long gone. What most city folks think of as a "family farm" wouldn't last a year in today's farming environment. Almost all "small" family farms get most of their income from a job (or two) in town. Making money farming requires big capital, lots of acreage, and more technical knowledge than most geeks have.

Here's what farming really looks like these days:

Ninety-two percent of U.S. farms are small (under $250,000 in annual sales), and small farms account for 71 percent of the assets involved in farming, including 67 percent of the land owned by farmers.

Large family farms, very large family farms, and nonfamily farms (8 percent of all farms) account for about 68 percent of production.

Government is great at creating lots of programs, each of which can be beneficial... if you want to twist your life to accommodate them. Farmers, to be successful, must first look for the programs, study them, apply for them, plan their work to adopt them, and then respond with all the paperwork required by them. None of that extensive effort produces any food. In some cases, it will yield money to produce less. In other cases, it will yield money to produce nothing. Government, through the USDA, has twisted farming in a thousand directions, usually directions that nobody would have gone were it not for government twisting. In Agriculture, as in all other areas...

Government programs don't work
for one simple reason: they don't HAVE to.
 

# -- Posted 4/30/04; 12:02:22 AM