Wednesday, November 9, 2011

USG takes sides in the heated Artificial v Natural Christmas Tree debate. Sides with Charlie Brown

Is this Crony Capitalism run amok? Will no one stop Big Natural Christmas Tree?

Do you remember these catchy ad campaign staples?

"Got Milk"
"Pork, the Other White Meat"

They all were the end result of what are euphemistically called "check off programs" No, these are not events having something to do with Walter Koenig, but what are essentially advertising/ PR programs run by USG via USDA, in which taxes (euphemistically called "assessments"), are collected from certain producers in an industry for the purposes of touting said industry in times of trouble (i.e., competition they deem unfair or threatening to the industry). Typically, what happens is reps from the troubled industry approach the FDA with proposals to set up a off, a study occurs, carried out by reps from said industry, then it is voted on by some reps from said industry. If the vote succeeds a sort of pilot program is set up, after some term, it is evaluated by the reps of the industry who again vote for continuance.

Well, what can only be referred to as "Big Natural Xmas Tree" felt it needed this government help back around two-double-aught four, (2004) during the eevil Boosh administration, and began the process. Details helpfully provided at the blogspot blog by Big Natural Christmas Tree itself. Check Off Study

About this time four years ago, the U.S. Christmas Tree industry was in the midst of a downward spiral. Purchases of Real Christmas trees had dropped to 23.4 million – about two-thirds of what they had been a decade earlier. What’s worse, since the number of households in the U.S. had increased, market share was down even more.

It seemed that having a Real Tree was out of vogue – perhaps too messy and too much hassle for the average household. Even scarier was the fact that the new generation of prospective buyers was growing up without the tradition of having a Real Tree.

...The world is changing. Did anyone see or hear one of the thousands of ads ran this season? They were everywhere. Should we be surprised that consumers reported purchasing 87.1% more new fake trees this last season? And since fake tree users keep them an average of 6-9 years, those people aren’t going to be back in the market for a Real Tree any time soon.

Do you know what buyers of new fake trees think about the environmental benefits of Real Trees? For every one of them that said a Real Tree was better for the environment, 6.25 said a fake tree was better for the environment! Where do you suppose they got that idea? You betcha. The fake tree industry is telling them that fake trees are safer, cleaner, cheaper in the long run, and better for the environment, because they are re-used.

So, under pressure from BIG ALUMINUM CHRISTMAS TREE, Big Natural Christmas Tree, the older industry standard, felt they had no alternative. They took the GM route, sort of. They needed to call in Big Government:

While the fake tree industry is investing dollars to vigorously promote their product, the Real Tree industry is pulling back and devoting fewer funds to public relations and marketing. More than 1,000 people donated more than $900,000 for 2004 promotion and marketing programs. By 2007, donations to the market expansion activities had dropped to about $400,000. The erosion of funding resulted in fewer projects aimed at positively impacting consumer attitudes about Real Trees limiting the ability of the industry to affect the sales of Real Trees in the marketplace.

Given this continued erosion of the market share of farm-grown Christmas Trees, an industry task force is being formed to study the possibility of a federal marketing order that could establish a nationwide checkoff designed to support expanded promotion, marketing and research projects.

The NCTA Board of Directors supports the industry task force study of a federal marketing order.

Even if the industry decides to pursue a nationwide checkoff, it takes at least a year for USDA to follow its “rule making procedures.” Thus, it is highly unlikely that a checkoff could start before 2010. In the interim, NCTA will engage in an aggressive promotion and protection program as funds allow.

That was the state of things in two-double-aught-and eight (2008). Three years later all of this came to fruition Nov 8, two-double-aught and eleven (2011), during the Obama administration, with the release of this unintentionally hilarious release from the GPO.

Please note the header, and page numbers in the Federal Register.

[Federal Register Volume 76, Number 216 (Tuesday, November 8, 2011)]
[Rules and Regulations]
[Pages 69094-69110]
From the Federal Register Online via the Government Printing Office []
[FR Doc No: 2011-28798]

Pages sixty-nine thousand, and ninety-four through sixty-nine thousand, one-hundred and FREAKING ten?????? You've got to be kidding me. Some day thousands of years from now, archaeologists will find layers and layers of petrified paper deposits with fossilized bits of human skeletons here and there. The Papyrus Age. Holy Mackerel.

Anyway, some more gems from this document:

SUMMARY: This rule establishes an industry-funded promotion, research,
and information program for fresh cut Christmas trees. The Christmas
Tree Promotion, Research, and Information Order (Order) is authorized
under the Commodity Promotion, Research, and Information Act of 1996
(1996 Act). The Order will establish a national Christmas Tree
Promotion Board (Board) comprised of 11 producers and one importer.
Under the Order, producers and importers of fresh cut Christmas trees
will pay an initial assessment of fifteen cents per Christmas tree.
Producers and importers that produce or import less than 500 Christmas
trees annually will be exempt from the assessment. A referendum will be
conducted, among producers and importers, three years after the
collection of assessments begin to determine if Christmas tree
producers and importers favor the continuation of this program.

The Order is authorized under the 1996 Act which authorizes USDA to
establish agricultural commodity research and promotion orders which
may include a combination of promotion, research, industry information,
and consumer information activities funded by mandatory assessments.
These programs are designed to maintain and expand markets and uses for
agricultural commodities. As defined under section 513(1)(D) of the
1996 Act, agricultural commodities include fresh cut Christmas trees.
The Order will provide for the development and financing of a
coordinated program of research, promotion, and information for
Christmas trees.

Hah. Try to compete with that Big Artificial Christmas Tree!


The fresh cut Christmas tree industry competes directly with the
artificial Christmas tree industry. Artificial Christmas tree companies
advertise heavily throughout the fall and Christmas seasons. According
to data

[[Page 69096]]<-(had to leave that in when I cut and paste- ed.)

supplied by the proponents artificial tree purchases have increased
from 9.8 million in 2003 to 17.4 million in 2007.


According to U.S. Department of Commerce, U.S. Census Bureau,
Foreign Trade Statistics, imports of Christmas trees from 2006 through
2008 averaged about 1.9 million trees. During those years, imports from
Canada accounted for 99.72 percent of the total imports. Italy,
Columbia and Mali comprised about .28 million trees or less than one
percent. For the same period, these imports were valued at $27.427
million dollars.

And you too shall feel the wrath, Hoser competition from the Great White North!

We had no choice. A voluntary program failed, so we need Big Brother to step in with some helpful 'assessments' so that Big Natural Christmas Tree can compete in the market...

Need for a Program

A national research and promotion program for Christmas trees would
help the industry to address the many market problems it currently
faces. According to the Task Force, two main factors currently
affecting Christmas tree sales, both in the domestic market and abroad,
are increased competition and changing consumer habits.

According to additional data supplied by the Task Force, the market
share of fresh Christmas trees in the U.S. from 1965 to 2008 has
declined by 6 percent. In comparison, the market share of artificial
trees has increased 655 percent from 1965 to 2008.

According to the proponent data, sales of fresh cut Christmas trees
decreased by 15 million trees from 37 million trees sold in 1991 down
to 22 million trees sold in 2002. The industry saw an increase in sales
in 2003 through 2007 when the industry conducted a voluntary marketing
campaign which was lead by a small group of producers and retailers.
This voluntary marketing campaign saw sales rebound by 9 million
trees--from 22 million trees sold in 2002 to 31 million trees sold in
2007. Even with the strong sales response to the marketing efforts, the
voluntary marketing program suffered from a lack of funding.

The Christmas tree industry has tried three different times to
conduct promotional programs based on voluntary contributions. Each
time, after about three years, the revenue declined to a point where
the programs were ineffective. The decline in revenue is attributable
to the voluntary nature of these programs. Therefore, the proponents
have determined that they need a mechanism that would be sustainable
over time. They believe that a national Christmas tree research and
promotion program would accomplish this goal.

Which step is not without its drawbacks mind you, of course, with the government collection of "assessments" come all the reporting and other requirements. Dig this long extract to get a taste of these, along with the hoped for results of government inserting itself into the hurly burly of the Xmas Tree Market:

This rule establishes an industry-funded research, promotion, and
information program for fresh cut Christmas trees. The program will be
financed by an assessment on Christmas tree producers and importers and
will be administered by a board of industry members selected by the
Secretary. The initial assessment rate will be $0.15 per Christmas tree
cut and sold or imported to the United States and could be increased to
$0.20 per Christmas tree. Entities that cut and sell or import less
than 500 Christmas trees will be exempt. The purpose of the program
will be to strengthen the position of Christmas trees in the
marketplace, and maintain and expand markets for Christmas trees. A
referendum will be held among eligible producers and importers to
determine whether they favor implementation of the program three years
after the first assessments begin. The Order will continue if favored
by a majority of producers and importers voting in the referendum. The
program is authorized under the 1996 Act.

Regarding the economic impact of the Order on affected entities,
Christmas tree producers and importers will be required to pay
assessments to the Board. As previously mentioned, the initial
assessment rate will be $0.15 per Christmas tree cut and sold or
imported to the United States and could be increased to no more than
$0.20 per Christmas tree.

Regarding the impact on the industry as a whole, the Order is
expected to grow demand for fresh cut Christmas trees. The Christmas
tree industry hopes to achieve a stable funding base to promote
Christmas now and into the future.

Regarding alternatives, the Christmas tree industry has already
considered and implemented voluntary programs, but based on past
experiences, these programs only worked in the short term; until monies
were depleted.

This action will impose an additional reporting and recordkeeping
burden on producers and importers of fresh cut Christmas trees.
Producers and importers interested in serving on the Board may be asked
to submit a nomination form to the Board indicating their desire to
serve or nominating another industry member to serve on the Board.
Interested persons will also submit a background statement outlining
their qualifications to serve on the Board. Producers and importers
will have the opportunity to cast a ballot and vote for candidates to
serve on the Board. Producer and importer nominees to the Board will
have to submit a background form to the Secretary to ensure they are
qualified to serve on the Board.

Additionally, producers and importers who domestically produce or
import less than 500 Christmas trees annually could submit a request to
the Board for an exemption from paying assessments on this volume.
Producers and importers also will report regarding their sales/imports
that will accompany their assessments paid to the Board. Producers and
importers who will qualify as 100 percent organic under the NOP could
submit a request to the Board for an exemption from assessments.

Finally, producers and importer who wanted to participate in a
referendum to vote on whether the Order should continue will have to
complete a ballot for submission to the Secretary. These forms were
approved by OMB under OMB Control No. 0581-0267 and 0581-0268. Specific
burdens for the forms are detailed later in this document in the
section titled Paperwork Reduction Act. As with all Federal promotion
programs, reports and forms are periodically reviewed to reduce
information requirements and duplication by industry and public sector
agencies. Finally, USDA has not identified any relevant Federal rules
that duplicate, overlap, or conflict with this rule.

AMS is committed to complying with the E-Government Act, to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.

Regarding outreach efforts, as previously mentioned, the Task Force
conducted sessions throughout the United Sates in different States and
regions. These were held in conjunction with regional and state
organization meetings. Approximately 50 sessions were held across the
United States. Input regarding the proposed program was incorporated
into the Task Force's proposal.

Got that? Clear as mud. Big Artificial Christmas Tree has run effective ad campaigns and has taken a larger part of the market, thanks to lazy Americans that are sick and tired of cleaning up dried needles, and fire hazards. Big Natural Christmas Tree does not have the funds to compete with Big Artificial Xmas Tree. So, they go to the taxpayer for insulation from the effects of a nominally free market, through the auspices of Big Government as a PR firm.

Oh no they don't! No such thing occurs! you might say. The 15 to 20 cent tax is levied on the BNXT growers, not the consumer. The taxpayer isn't left paying for the PR. Big Natural Christmas Tree pays the bill.

Think again Clyde. Such taxes are passed on to the folks that buy the products are they not? So, ultimately, hapless Charlie Brown IS paying for it.
More on this program: From the Right and From the Left