Thursday, November 10, 2011

What the Checkoff Means to Me

A Guest Post from a Tree Farmer:

My husband and I have been in the Christmas Tree business since 1971, and I just wanted to take a moment to respond to some of the recent questions about the Christmas Tree checkoff. We are a small Christmas tree farm in the foothills of the Oregon Coast Range. We are primarily wholesalers, but have been retailers and now also have a small Choose & Cut operation. Our soils are suited to growing Christmas trees and not much else.

A checkoff is a program where commodity groups can help themselves to better their industry. A couple of the longest running ones are cotton and beef. They formed because there were incredible challenges in their industries that no one state or company could answer. When I was in high school, Sunday nights were spent ironing clothes for the next week at school. The cotton checkoff paid for the research that made permanent press cotton fabric possible. Do you remember how cotton clothes used to fade? The Cotton Checkoff paid for the research that paid for that, too. The cotton checkoff was formed because their industry was being overwhelmed by polyester fabric that didn't fade and didn't wrinkle.

By working together, industries such as cotton could pool their resources and speak with one voice. The assessment that is made is self-imposed funding by the industry to help itself. The monies are collected, and the program is designed and run by an industry board. Taxes are monies collected by the government for use by the government. Monies collected by checkoffs go directly to the checkoff to be used for research and promotion for that industry alone.

We petitioned the USDA as is our right under the First Amendment to the Constitution. We asked them to allow us to create a program, for which they would provide oversight. The industry pays for this oversight - it is revenue neutral to the government. The government doesn't get any of the money, and there is no cost to the taxpayer.

We did not do this lightly. It is a serious thing we were asking. The oversight is a good thing. A checkoff is audited annually. The checkoff boards must set goals to be met by the program. Every 5 or so years an econometric study must be done that tells whether or not those goals are met. If those goals are not met, the program folds. The USDA makes sure that money is used for what it is supposed to be used for.

A group of us growers and importers started more than three years ago in April of 2008 to study other commodities that have tried these programs. We focused on commodities that were similar in size: blueberries, mangoes, watermelons, sorghum and several others. We facilitated sessions in the four top growing areas of the country. By now there have been at least 100 meetings across the country at state and national Christmas tree meetings discussing the checkoff.

You asked how we can guarantee that the assessment would not be passed on to the consumer. We can't guarantee that. Each grower will make that decision. We are primarily wholesalers. In 2008, I contacted all our buyers, mostly retailers, and asked them how would they feel about this kind of promotion program and the assessment. They were all supportive and excited to get the kind of help in the marketplace that the checkoff could supply. Some offered to pay the whole thing, and some offered to split the cost, should it come into being.

Farmers know dirt. We know how to grow things. But in this changing world, is it not enough to grow a great product. We have to let people know about our product. That takes time, coordination and money.

Some people have asked why we don’t just pool our resources and keep USDA out of it. In the last 20 years, there have two very strong voluntary programs initiated by the industry that raised nearly a million dollars each. We have found, as every industry we studied found, that voluntary programs have a life of about three years. The volunteers running the program and paying into the program burn out. Everyone in the industry benefits, but only a few carry the burden. These two programs had great impact on our industry's ability to promote our product. We know promotion and research work. We have to do it as an industry to survive. A checkoff is fair, equitable and can supply sustainable monies.

Betty Malone, Sunrise Tree Farm


Carrie McClain said...

Thanks for that very thoughtful and honest response, Betty.

Amber Scott said...

Great information on cotton especially! I knew that existed but never had the reason to arm myself with those kind of examples. Thank you for the article.

Rick Miller said...

I think the term "checkoff" here is incredibly misleading. This checkoff is not voluntary, but mandatory. Tell me, where does the farmer get to check anything off? Also, if a farmer does not want to contribute to the government marketing campaign, they would be VIOLATING THE LAW, and are subject to any fines and fees that come along. Lately, our broke federal government has not hesitated to use force to shakedown folks who are not compliant. Is this the way you want your fellow farmers to be treated?

This industry tried to use a collective approach to the marketing campaign, and failed. So, the answer is to use the Federal government to force compliance? What a waste! To be successful in business, you have to listen to consumers. When miscalculations occur in projecting consumer demand, a firm will experiences losses. This is the market warning of a mistake you made, and is a signal to innovate or face extinction.

Rick Miller said...

Also, I am wondering- since the main reason for a slump in demand for your product is that more consumers are buying "fake" trees- have you(or any of your colleagues) considered producing plastic trees and marketing them? This seems like a much more scrupulous approach to your dilemma...

Anonymous said...

Doesn't matter to me.. I'll be putting up my very beautiful FAKE Christmas tree..

RealTrees said...

Anonymous - to each their own. Personally, we prefer supporting U.S. farmers over Chinese factories, but that's the beauty of the free market. Merry Christmas!