Can a voluntary checkoff program work?
That’s the question the Organic Trade Association faces as it moves toward a voluntary organic check-off.
Voluntary wasn’t part of the discussion a few years ago.
The Organic Trade Association submitted an application to the U.S. Department of Agriculture in May 2015 to consider implementing an assessment-funded organic check-off program.
In January 2017, the USDA officially proposed a nationwide organic check-off program, opening the process for public comments. However, in May this year, the USDA terminated the rulemaking process, stating input on the program was mixed.
“The comments revealed that there is a split within the industry in terms of support for the proposed program,” the USDA said. “While some comments voiced support for a collective industry program, other comments stated that industry was not aligned in backing the proposal.”
The OTA says the USDA move short-circuited an organic check-off program that was supported by more 12,000 individuals and businesses, including thousands of organic growers, ranchers and business stakeholders.
Would a voluntary checkoff program work? Do “voluntary” taxes work? Well, no — but not so fast, my friend. An article published 10 years ago online by U.S. Food Policy considered the chances for success for a voluntary checkoff program. The article said that while the assumption is the advertising budgets for promotion programs for commodity checkoff programs would collapse, “certain clever types of auctions might enhance contributions even if they were voluntary.”
From the article, headlined “What if checkoff programs were voluntary?”:
“For example, under a plan called the ‘provision point mechanism’ (PPM), producers would offer voluntary payments, but they would only really have to pay if the total voluntary payments exceeded a fairly high threshold. If the threshold is not reached, everybody gets their money back, and the advertising campaign never happens. This mechanism seems to generate higher contributions than traditional voluntary payment plans do.”
So there may be ways for the voluntary approach to work. And perhaps voluntary is the most pragmatic approach, since there always seems to be legal trouble nipping at the heels of marketing orders and checkoff programs.
The OTA announced a plan to move forward with a voluntary industry-invested organic research, promotion and education check-off program that the group says “will be collaboratively designed and implemented by organic stakeholders across the diverse organic supply chain.”
“There is a critical need to educate consumers about organic, for more technical assistance to help more farmers transition to organic, and to loudly promote the organic brand,” Laura Batcha, CEO and executive director for the Organic Trade Association, said in a news release.
The new voluntary initiative is GRO — Generate Results and Opportunity for Organic.
Creating a unified message about organic and cutting through consumer confusion is important for the organic industry. Creating a workable voluntary funding approach will be daunting. But, if successful, the OTA may have created a new model for others to follow.
Tom Karst is The Packer’s editor. E-mail him at [email protected].