Producer Support for Checkoff Programs: The Case of Beef

Abstract

Agricultural producers have generated approximately $750 million annually in mandatory checkoff contributions and have invested a majority of these funds in various generic advertising and promotion programs. Over the past decade, a number of economists have studied the economic impacts of checkoff-funded generic advertising programs and found, in most cases, positive net benefits for producers. Nonetheless, as Crespi and McEowen discuss in another article in this issue of Choices, mandatory checkoff programs have faced constitutional challenges on the grounds that they violate the individual contributor’s right to free speech because the checkoff fees are used for collective advertising and promotion efforts. Even though the recent Supreme Court ruling on the beef checkoff program has apparently settled that question in favor of checkoff programs, the future of all checkoff programs, mandatory or otherwise, depends critically on the support of producers. Under current legislation, the Agricultural Marketing Service (AMS), the USDA division responsible for overseeing commodity checkoff programs, must conduct a national referendum on a checkoff program whenever there are enough petitions from producers, and can terminate programs whenever such referenda find insufficient support from producers. Support for checkoff programs may vary across farm settings and producers with different attitudes towards such programs. An understanding of the extent to which the support may be affected by various producer characteristics and attitudes should be useful for managing their programs and communicating with stakeholders. A successful checkoff program requires an effective public relations campaign to convince producers that the checkoff is a profitable investment. If program managers could identify producers (by their characteristics and organization affiliation) who are less likely to support checkoff programs, they could better target those groups to enhance support. Eliciting producer attitudes towards the current checkoff could also help improve producer support of checkoff programs. Why do some producers not support the current checkoff? Is a lack of support due to insufficient information about the checkoff? Do producers feel most checkoff benefits are captured by processors, retailers, or foreign exporters? To answer these questions and other questions about producer support for checkoff programs, a mail survey was conducted using a stratified sample of Oklahoma cattle producers from the United States Department of Agriculture’s National Agricultural Statistics Service, (USDANASS, 2002). A total of 2,950 Oklahoma cattle producers were selected for the mailing list, ultimately providing 670 usable responses (a reasonable 23% response rate). Producers were grouped by their demographics, organization affiliation, and attitudes. In the survey, a series of questions were asked to collect information about the differences in producer support rates for the beef checkoff program by farm demographics (producer type, size, and affiliation with producer organizations) and producer attitudes toward the current checkoff. The survey procedures followed and the statistical methodology used to analyze the survey results are discussed in detail in Norwood et al. (2004).