Friday, October 17, 2008

What if checkoff programs were voluntary?

An interesting article in the American Journal of Agricultural Economics this May used experimental data from an economics laboratory to address the following question: what would happen if legal concerns prevented commodity checkoff programs from using the federal government's power of taxation to collect mandatory payments from producers?

It is generally assumed that advertising budgets for campaigns such as "Beef. It's What's for Dinner" and "Pork. The Other White Meat" would collapse if the producer payments were voluntary. The article by Kent Messer, Harry Kaiser, and William D. Schulze points out that certain clever types of auctions might enhance contributions even if they were voluntary.

For example, under a plan called the "provision point mechanism" (PPM), producers would offer voluntary payments, but they would only really have to pay if the total voluntary payments exceeded a fairly high threshold. If the threshold is not reached, everybody gets their money back, and the advertising campaign never happens. This mechanism seems to generate higher contributions than traditional voluntary payment plans do.

As an aside, readers of this blog will not be surprised that I disapproved of this paragraph:
One might question the social importance and magnitude of under-provision of advertising for generic commodities. However, contrast the public health impacts from the types of foods associated with the majority of branded advertising, such as soda, beer, chips, and candy, to the types of foods that now benefit from mandatory generic advertising, such as fruits, vegetables, nuts, chicken, pork, beef, and milk. Not only do the generic commodities comprise the key nutritional elements of the United States Department of Agriculture food pyramid but these commodities also tend to be low in fat and salt (in comparison to branded snack foods and restaurant meals) and represent the bulk of what might be called the components of a healthy diet. If generic advertising for agricultural commodities collapses because mandatory programs are declared unconstitutional, the "Dancing Raisins" will be gone and the vast majority of ads for snacks will be for chips, cookies, and candy. Given important health problems such as obesity, juvenile diabetes, and osteoporosis, the under-funding of generic commodity advertising has serious public health consequences.
Years of previous coverage here (and here) cast doubt on the claim that checkoff advertising is largely consistent with federal dietary guidance. The dancing raisins comparison is misleading, since a tiny fraction of checkoff advertising is for fruits and vegetables, while much of the funding is for high fat beef and pork and cheese. I don't think there even is a federal checkoff program for raisins. Raisins are not mentioned in Becker's CRS report (.pdf). Perhaps those ads were from a California state level board? If you believe that the checkoff programs are mostly about skim milk, not cheese, you've been hoodwinked by the public relations. I am not sure where the "low fat" comment came from -- federal dietary guidance gives greatest importance to saturated fat rather than total fat, and the products covered by checkoff programs are disproportionally high contributors to saturated fat in U.S. diets, compared to foods not covered by checkoff programs. And, how could lower checkoff advertising possibly lead to obesity? This is a very, very bad paragraph.

I think the agricultural economics literature on checkoff programs would be stronger if it were less baldly apologetic on their behalf.

2 comments:

Western Free said...

ARE LOBBYING ACTIVITIES BY AGRICULTURAL COMMODITY COMMISSIONS UNCONSTITUTIONAL?

By Steve Rogers
Western Free Speech Council
February 2009 Monthly Newsletter

Olympia, Washington - In recent years, there have been numerous court challenges
nationwide objecting to agricultural commodity commissions' use of mandatory
assessments for advertising and market promotion programs. The lawsuits have centered
on allegations that such programs infringe upon First Amendment rights of free speech
by mandating that producers pay assessments to fund generic advertising with which
they may disagree.

However, interestingly enough, none of the legal challenges of commodity commissions
have involved the use of grower assessments for lobbying and political activities.

In Washington State, agricultural commodity commissions have become increasingly
active in lobbying and influencing governmental actions. In the last few years, as
memberships of voluntary grower associations in Washington State have dwindled,
agricultural commodity commissions have stepped in to fill the void and are
redirecting more and more resources toward lobbying and political activities in
Olympia and Washington, DC.

However, according to many legal experts, the use of mandatory commodity commission
assessments for lobbying and political activities is unconstitutional and therefore
illegal. "Commodity commission assessments can be used for many things," notes Sarah
Riley, principal consultant for the Western Free Speech Council, "like export
development and research……However, one thing that is specifically illegal is
influencing legislation or governmental action — lobbying."

For example, a recent Supreme Court ruling (Davenport v. Washington Education
Association) ruled that individual teachers should not be forced to fund lobbying and
political speech they disagree with. In the opinion written by Antonin Scalia, which
was unanimous except for a few sections, the Court was extremely concerned about
people being forced to support compelled political or lobbying speech. In terms of
legal precedence, this ruling has implications for other situations (in addition to
unions) where business people or professionals are being forced to pay fees or
assessments to other government mandated entities or organizations. Obviously, the
example that immediately comes to mind is mandatory assessments for agriculture
commodity commissions.

On a related note, the Supreme Court has made a number of other rulings which clearly
assert that the First Amendment prohibits the government from compelling political or
ideological speech. In West Virginia State Board of Education v. Barnette, the Court
held that Jehovah’s Witnesses could not be forced to stand and salute the American
flag in violation of their religious beliefs. In Wooley v. Maynard, it set aside the
conviction of a New Hampshire man who obscured a portion of his license plate that
announced the state motto ‘‘Live Free or Die.’’ In Hurley v. Irish-American Gay,
Lesbian & Bisexual Group of Boston, it ruled that Boston could not compel a private
association of veterans to allow members of a gay, lesbian, and bisexual group to
march in the veterans’ parade. The First Amendment also protects individuals from
forced financing of political or ideological speech. For example, in Abood v. Detroit
Board of Education, the Court limited unions from spending on ideological messages
those funds received from nonunion employees as part of agency shop arrangements. And
the Court applied the union analogy to the law bar in Keller v. State Bar of
California, excusing members from contributing funds to political and ideological
causes.

In conclusion, as agricultural commodity commissions in Washington State continue to
expand their political and lobbying presence in Olympia and Washington, DC, it is
becoming increasingly evident that their legal risk of being successfully challenged
for political and lobbying activities is a very high probability.

##########################################

The purpose of the Western Free Speech Council is to protect and defend individual
free speech as guaranteed by the U.S. Constitution. Based in Denver, Colorado, the
Western Free Speech Council is a nonprofit organization that relies on private
financial support from individuals, associations, foundations and corporations. For
more information about the Council, please email us at
westernfreespeechcouncil@gmail.com.

Levi Russell said...

I'm not sure how I feel about the voluntary versus taxation funding for checkoffs. What I am sure about is the fact that eating meat is far preferred to packaged junk. The lipid hypothesis is the result of junk science generated and preserved by the federal government. Please see the documentary "Fathead"