Magazine of the Seaway Port Authority of Duluth
Spring, 1997 Issue
Commodity groups yield R&D for farmers

Run though the list of key cash crops grown throughout the Upper Midwest and you'll find a state or regional commodity organization for each of them. Wheat, corn, soybeans, barley, sunflower, edible beans, potatoes, sugarbeets, canola ... all claim at least one group—sometimes one or two per state.

The commodity organizations are controlled by farmer boards or councils— understandable, given that the bulk of their financial support also comes from producers. Farmers financially support their respective groups in two ways: 1.) through membership dues and 2.) by contributing to individual commodity check-offs.

Examples of check-off organizations would be the Minnesota Wheat Research & Promotion Council, North Dakota Wheat Commission, South Dakota Wheat Commission, North Dakota Barley Council, Minnesota Barley Research & Promotion Council, the Minnesota Corn Research & Promotion Council and oilseed councils in North and South Dakota. Established by their respective state legislatures, such groups collect a "tax" on their designated commodities. The rate, set by the legislature, varies among commodities and states (anywhere from a cent per bushel up to two cents or more). The check-off is collected at the point of first sale (typically the country elevator), with the money then forwarded to the appropriate check-off organization. In most cases, there is a refund provision should an individual producer decline to support the check-off..

 
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The check-off groups usually carry out a tri-faceted mission: research, education and promotion. By law, however, they are not permitted to use check-off funds to engage in direct political activities, i.e., lobbying.

"Research" typically means underwriting state university projects that apply directly to the specific commodity. Breeding of new crop varieties, disease management, insect control, tillage practices and weed management are just a few of the production-oriented research areas that have received extensive check-off group support over the past few decades. Product utilization research (e.g., new food uses and nutritional investigations) also benefits from check-off dollars.

"Education" encompasses a broad gamut of activities and sometimes becomes intertwined with "Promotion." The groups will respond to inquires—general or specific—about their crop and industry; develop product literature and other publications; provide membership communications materials; interact with agricultural and other news media; and perform a number of other functions that contribute to a better understanding of their particular crop and agriculture in general.

"Promotion" takes on extra dimensions as the check-off groups actively pursue broader markets and improved commodity prices. Activities can be as diverse as hosting a foreign grain buying team (including, quite often, a stop at Duluth-Superior and/or the Minneapolis Grain Exchange) to undertaking overseas market development trips to addressing crop quality concerns. The check-off groups maximize their overseas promotional impact by accessing matching funds from USDA and belonging to national entities such as U.S. product promotion programs in key markets around the world.

The other sibling in the ag commodity family is the dues-paying association, which includes groups like the Minnesota Association of Wheat Growers, North Dakota Grain Growers Association, Minnesota Soybean Growers Association and Minnesota Barley Growers Association. While most of them work closely with their check-off counterparts, these dues-paying groups are separate entities with their own boards of directors and missions.

One of the most important functions of these associations is lobbying at both the state and national levels. All of these groups were active during the 1995 farm bill deliberations, for example, and also represented their farmer-members during the GATT and NAFTA international trade negotiations earlier this decade. Each group regularly monitors legislative, trade and regulatory issues affecting its industry, establishes positions it believes are in the best interests of its members and then makes those views known to legislators and government agency officials.

Obviously, these comments merely skim the surface in explaining why commodity check-off organizations and dues-paying grower associations exist. One could go on for several more pages in describing each one's purpose and programs.

Still, there is a common basic thread woven though all of these groups' mission statements and activities: the improvement of their farmer-constituents' economic well-being and the health of agriculture in general across the Upper Midwest.Some groups, it can be argued, do a better job than others in pursuit of that goal. Likewise, it's often easier to quantify the direct economic payback of certain activities (e.g., lobbying for a regulatory change) than others (e.g., generic commodity promotion). In the long run, though, the figurative bottom line for commodity groups is the literal bottom line of their farmer-constituents. The wise ones never forget that reality.

Ag writer Don Lilleboe lives in West Fargo, N.D