NCPA - National Center for Policy Analysis

Are Milk, Cotton Boards On Verge Of Scandal?

November 25, 1998

Under an act of Congress, the Cotton Board and Cotton Inc. collect $60 million a year from cotton farmers to promote the sale and use of cotton. They are only two of a number of quasi- public bodies which the U.S. Agriculture Department is supposed to oversee in order to ensure funds are legitimately spent. But critics, including the General Accounting Office, charge the department has repeatedly failed to exercise its authority.

As a result, funds reportedly are going for lavish entertainment and other purposes which have little or nothing to do with promotion of the commodities. Moreover, critics question whether such promotion programs have any positive effect whatsoever.

  • Last year, the cotton promoters spent $450,000 on a lavish annual black-tie event held at New York's Metropolitan Museum of Art -- complete with a string quartet, private art exhibition, cocktails, dinner, fashion modeling and gifts.
  • Over an 18-month period, the same promoters spent at least $8,500 for "adult entertainment" at topless bars and other such establishments -- listing $2,915 on some occasions for "personal services."
  • The Agriculture Department oversees 11 other such promotion programs -- from products ranging from dairy products to beef, soybeans, pork, eggs, potatoes, honey, mushrooms, watermelons and popcorn -- which this year collected a total of $659 million in obligatory payments by producers.
  • In recent years, seven agricultural marketing programs have been rejected in referendums by growers -- including programs for pecans, wheat and cut flowers -- because the growers believed they were not getting their money's worth.

Economists point out that the costs of the programs are ultimately passed along to consumers through higher product prices. Nevertheless, producers have no choice but to contribute to the programs -- even when times are hard. This year, cotton farmers have suffered one of their worst growing seasons in history.

Last month, the Agriculture Department's own inspector general recommended that the milk promotion program be suspended because of millions of dollars in questionable expenses.

Source: Sharon Walsh, "Cotton Program Soft on Oversight," Washington Post, November 25, 1998.

 

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