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Commodity checkoff programs as alternative producer investment opportunities: The case of soybeans

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  • Gary W. Williams

    (Department of Agricultural Economics, Texas A&M University, College Station, TX 77843-2124)

Abstract

Evaluations of commodity checkoff programs generally involve benefit-costs analyses. The typical benefit-cost approach, however, provides no clear criteria for judging whether program benefits exceeds the costs sufficiently to warrant continuation of the program. This article proposes a method for evaluating a commodity checkoff program as an alternative investment opportunity facing producers which allows a ranking of the program among investment alternatives facing producers. The procedure is demonstrated through an analysis of the soybean checkoff promotion program. The analysis clearly indicates that the soybean checkoff program has performed well as an investment alternative for soybean farmers and warrants consideration for continuation. In contrast, a benefit-cost analysis of the soybean checkoff program yields ambiguous results regarding both the magnitude of the producer benefit and whether the benefit is sufficiently large relative to cost to justify continuation of the program. [Econ-Lit citations: Q130, M300, M370] © 1999 John Wiley & Sons, Inc.

Suggested Citation

  • Gary W. Williams, 1999. "Commodity checkoff programs as alternative producer investment opportunities: The case of soybeans," Agribusiness, John Wiley & Sons, Ltd., vol. 15(4), pages 539-552.
    • Handle: RePEc:wly:agribz:v:15:y:1999:i:4:p:539-552
    DOI: 10.1002/(SICI)1520-6297(199923)15:4<539::AID-AGR9>3.0.CO;2-N
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    References listed on IDEAS

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    1. Capps Jr., Oral & Bessler, David A. & Davis, George C. & Nichols, John P., 1996. "Economic Evaluation of the Cotton Checkoff Program," Economic Evaluation of Commodity Promotion Programs in the Current Legal and Political Environment, October 7-8, 1996, Monterey, California 279664, Regional Research Projects > NECC-63: Research Committee on Commodity Promotion.
    2. Hoy F. Carman & Richard D. Green, 1993. "Commodity supply response to a producer-financed advertising program: The california avocado industry," Agribusiness, John Wiley & Sons, Ltd., vol. 9(6), pages 605-621.
    3. Mitchell, Douglas W. & Speaker, Paul J., 1986. "A simple, flexible distributed lag technique : The polynomial inverse lag," Journal of Econometrics, Elsevier, vol. 31(3), pages 329-340, April.
    4. Henry W. Kinnucan & Yuliang Miao, 1999. "Media-specific returns to generic advertising: The case of catfish," Agribusiness, John Wiley & Sons, Ltd., vol. 15(1), pages 81-99.
    5. Reberte, J. Carlos & Schmit, Todd M. & Kaiser, Harry M., 1996. "An Ex Post Evaluation of Generic Egg Advertising in the U.S," Research Bulletins 122835, Cornell University, Department of Applied Economics and Management.
    6. Gary W. Brester & Ted C. Schroeder, 1995. "The Impacts of Brand and Generic Advertising on Meat Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 969-979.
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    Citations

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    Cited by:

    1. Hosseni, S. & Gray, R., 2018. "Who Governs Producer Controlled Research Organizations in the Agricultural sector, and Why?," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277133, International Association of Agricultural Economists.
    2. Julian M. Alston & John M. Crespi & Harry M. Kaiser & Richard J. Sexton, 2007. "An Evaluation of California's Mandated Commodity Promotion Programs," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(1), pages 40-63.
    3. Henry Kinnucan & Øystein Myrland, 2008. "On generic vs. brand promotion of farm products in foreign markets," Applied Economics, Taylor & Francis Journals, vol. 40(6), pages 673-684.
    4. John M. Crespi, 2003. "The Generic Advertising Controversy: How Did We Get Here and Where Are We Going?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 294-315.
    5. Luo, Ji & Williams, Gary W., 2015. "The Impacts of Chinese Exchange Rate Policy on World Soybean and Products Markets," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205075, Agricultural and Applied Economics Association.
    6. Shew, Aaron M. & Nalley, Lawton L. & Durand-Morat, Alvaro & Meredith, Kylie & Parajuli, Ranjan & Thoma, Greg & Henry, Christopher G., 2021. "Holistically valuing public investments in agricultural water conservation," Agricultural Water Management, Elsevier, vol. 252(C).
    7. Lee L. Schulz & John M. Crespi, 2012. "Presence of Check‐Off Programs and Industry Concentration in the Food Manufacturing Sector," Agribusiness, John Wiley & Sons, Ltd., vol. 28(2), pages 148-156, March.
    8. George C. Davis, 1999. "The science and art of promotion evaluation," Agribusiness, John Wiley & Sons, Ltd., vol. 15(4), pages 465-483.

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