Agricultural Marketing Fees: Not Just for Christmas Trees

James Gattuso / November 10, 2011

Yesterday, after word got out (via a post here on the Foundry) regarding new “mandatory fees” on Christmas trees imposed by the Obama Department of Agriculture (USDA), the White House moved quickly to suspend implementation of the new tax.

The fees, which were supported by an industry group called the Christmas Tree Check-off Task Force, were earmarked for industry marketing efforts. USDA’s role was to make sure that all growers helped pay for those efforts, whether they supported them or not. Those growers, at least for now, have been given a reprieve. But the ill-starred Christmas tree tax was far from the only such mandatory marketing levy on agricultural products from popcorn and blueberries to mangos.

These aren’t the only way Washington interferes with the agricultural marketplace, of course. Many commodities, from spearmint oil to milk are also subject to fees and price controls intended to limit supply and keep prices high, as has been documented by Heritage’s Diane Katz.

But while perhaps less intrusive, the marketing assessments are far from harmless. They not only cost growers and consumers money, and skirt constitutional provisions that only Congress has the power to tax, but they also violate basic principles of free speech, making some producers pay to communicate messages against their will.

Among the commodities subject to these fees:

• Beef: $1 per head of cattle, totaling $80 million annually;
• Blueberries: $12 per ton;
• Cotton: $1 per bale of cotton handled;
• Dairy products: 15-cent-per-hundredweight assessment on all milk produced in the contiguous 48 states;
• Eggs: 10 cents per 30-dozen cases of eggs sold, bringing in $18 million annually;
• Fluid milk: 20-cent-per-hundredweight assessment;
• Hass avocados: 2.5 cents per pound, bringing in almost $30 million;
• Honey packers and importers: 1 cent per pound, totaling $5 million;
• Lamb: $0.005 per pound of live lambs sold, with $2 million raised each year;
• Mangos: $0.005 per pound, raising $4.3 million;
• Mushrooms: 0.005 cents per pound, totaling over $4 million in revenue;
• Peanuts: 1 percent of the total value of all farmers stock peanuts, raising $8 million;
• Popcorn: 6 cents per hundredweight, raising some $1 million;
• Pork: 0.25 percent of market value, raising $3.8 million;
• Potatoes: 3 cents per hundredweight, totaling about $12 million;
• Soybeans: 0.5 percent of the net market price of the soybeans purchased, averaging $55–60 million per year;
• Watermelons: 3 cents per hundredweight on domestic watermelons, and importers pay 6 cents per cwt, bringing in some $2.8 million.

(Heritage interns John Russell and Luke Welch assisted in research for this post.)