“Got concrete”? Last week, the House of Representatives passed a bill to establish an advertising and research board similar to the federally-backed dairy program that funds the popular “got milk” ads.
H.R. 985, the Concrete Masonry Products Research, Education, and Promotion Act of 2015, authorizes the creation of a Concrete Masonry Products Board, which would be responsible for research and marketing efforts for the industry. This Board would be paid for by a “mandatory assessment” (known to everyone outside of DC as a “tax”) on producers based on every unit of concrete masonry sold. Concrete manufacturers would be unable to opt out of the assessment -- which will get passed onto consumers through higher prices -- and could face fines and interest charges for noncompliance, enforceable by the Department of Commerce.
These industry-promoting boards, known as "checkoff" programs, are becoming more popular. In 2013, NTUF counted 19 checkoffs. There are currently 22 separate checkoffs promoting: eggs, lamb, beef, Christmas trees, cotton, milk, avocadoes, blueberries, mushrooms, dairy, honey, mangoes, peanut, pork, raspberries, watermelons, paper/packaging, popcorn, lumber, sorghum, soybeans, and potatoes. While the concrete checkoff isn't the only new such program in the works -- the Organic Trade Association is pushing for an organic checkoff -- it would be the first one established outside of the Department of Agriculture.
As NTUF’s Demian Brady noted the last time Congress attempted to pass this legislation, checkoff programs are akin to compulsory unions, but for producers rather than laborers. Every business, whether they want any part of this program or not, is forced to pay into it. This creates a system where the board will continue to receive industry “dues” whether or not it provides a service that businesses deem worth paying.
Due to their nature, checkoff programs are prone to protectionism and cronyism. For example, the American Egg Board had attempted to squash competition by blocking egg-free mayonnaise maker Hampton Farms from grocery stores. Separately, a lawsuit demanding more transparency of such boards was filed after claims that the beef checkoff program was not providing equal benefits to all producers and directing funds to a lobbying organization despite a prohibition on checkoff lobbying. As Fred Stokes of the Organization for Competitive Markets points out, “[Checkoff programs] have mostly become the cash cow for organizations that work against fair competition and market transparency.”
Two reform bills have been introduced in the Senate. S.3201, introduced by Senator Mike Lee (R-UT) and Senator Cory Booker (D-NJ), would require increased oversight of checkoff programs. Earlier in July, Senator Lee introduced a more sweeping measure as S.3200, the Voluntary Check-off Program Participation Act. This legislation would ensure that participation in any checkoff programs would be voluntary, and not forced upon businesses and consumers by the federal government. In the interest of preserving market choice, and preventing a tax from being levied across an industry on consumers, checkoff programs should be voluntary rather than enforced by the federal government.