Agricultural Marketing

Producers and handlers of agricultural products paid millions of dollars for federally authorized research programs in 1992. Such check-off programs, which are funded by deducting a small amount from producers' checks for each unit of a commodity they sell, are authorized by Congress at the request of the agriculture industry. The programs are run by boards, such as the National Dairy Promotion and Research Board and the American Egg Board, whose members are appointed by the Secretary of Agriculture from nominations submitted by industry. This report provides information on (1) the amount and the use of checkoff funds, (2) the nature and the extent of Agriculture Department oversight, and (3) coordination of oversight responsibilities within the Agriculture Department.

GAO found that: (1) as of 1992, 11 of the 18 authorized check-off boards have been active and have completed at least 1 full year of operations; (2) during 1992, the 11 active check-off boards collected about $250 million in assessments from agricultural producers and handlers and spent most of the funds on promoting commodities in the domestic market; (3) the check-off boards sponsor research, administer consumer and producer information programs, and fund general and administrative expenses; (4) although AMS is responsible for ensuring that check-off programs comply with authorizing legislation and evaluating dairy program effectiveness, individual check-off boards are responsible for evaluating general program effectiveness; (5) AMS reviews check-off boards' budgets, projects, and contracts to prevent the boards from engaging in prohibited activities; (6) check-off boards reimburse AMS for its oversight services and USDA charges the boards for any legal services it provides; (7) AMS coordinates its check-off program oversight activities with many USDA agencies; and (8) oversight coordination varies depending on the agency involved and the activity performed.