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.