Agricultural Marketing

U.S. producers, importers, and others handling a variety of agricultural products pay millions of dollars each year for programs to increase domestic and foreign sales of these products. These programs are known as check-off programs because of the way that they are funded: A small amount is deducted from the revenues that producers or other members of an industry receive from the sale of their products. The programs are run by check-off boards, such as the National Dairy Promotion and Research Board. This report provides information on (1) how U.S. check-off programs are organized and the kinds of activities they carry out; (2) what factors the check-off boards consider in planning future program activities: and (3) how comparable marketing organizations in Australia, Germany, New Zealand, and the United Kingdom are organized and carry out their activities.

GAO found that: (1) the six U.S. check-off programs reviewed vary by board composition, revenues collected, assessment methods, and options for initiating, continuing, and terminating programs; (2) check-off boards differ in their emphasis on developing domestic or foreign markets, their methods for selling their products, and their reliance on research to develop new products, enhance production, and address nutritional concerns; (3) check-off boards use market research and program evaluation techniques to plan their future activities while coordinating with related groups in preparing and carrying out these plans; (4) the foreign promotion and research programs reviewed differ from the U.S. check-off programs in their organizational structure, funding mechanisms, types of activities performed, and emphasis on export activities; (5) some foreign marketing organizations have government members on their boards or guiding councils and do not require legislative action to change their assessment rates; (6) some foreign programs promote product groups rather than a single industry; (7) in general, the foreign marketing organizations do not exempt small producers from assessments and some receive significant funding from sources other than their industry assessments; (8) foreign organizations generally engage in a wider range of promotional activities, such as buying and selling products and providing training and inspection services than their U.S. counterparts and focus more on exports than domestic sales; and (9) market development programs may become more important in the future, since the new international trade regulations do not limit their use and increase competition.