Nov 11, 2011

Oh My Tannenbaums!

I recently came across an interesting story on the LRC Blog about the fledgling American Christmas tree industry.  It seems there was quite a ruckus over a proposed 15 cent/tree tax on importers and producers of fresh Christmas Trees.  Here are a couple of links about it:

ABC news article
FOX news article

I also had a debate (via email) with the public relations manager of The National Christmas Tree Association- an industry association for Christmas Tree Growers, and the primary activist group involved.  It was an interesting exchange and one that highlights the difference in perspective of what the role of government ought to be:

(Since we are both named Rick, I will refer to myself as Me and the spokesman as Him.)

I just read the following on the Fox News website:

"The program and fee were supported by some in the Christmas tree industry. The money was not meant to pay down the debt or fund any other program, but designed to go back into the new Christmas Tree Promotion Board.  The board, proposed earlier this year, is the culmination of a years-long effort by the fresh Christmas tree industry to promote itself, according to background information provided in the Federal Register. The industry has faced increasing competition from producers of artificial trees, but efforts to collect voluntary contributions for a fresh-tree marketing campaign have repeatedly run out of funding. So the government stepped in to mandate a fee to support the promotion board"

So, your solution to competition and a lack of marketing money is to use the coercive power of the federal government to achieve these goals?  I think I am going to contact the "player piano" industry and let them in on this new strategy!  Also, the horse and carriage industry....LOL!

Does that mean you also stopped wearing cotton T-shirts?  Because cotton growers have for years had a very successful checkoff program promoting the use of cotton.  Have you also stopped drinking milk?  Have you stopped eating blueberries, beef and watermelon?  A checkoff doesn’t have anything to do with Obama or taxes as has been erroneously reported.
 Bottom line:  Real Christmas trees are grown by American farm families.  Fake Christmas trees are made in Chinese factories.  Merry Christmas.

Thanks for the reply.

I find your first example- cotton to be an interesting choice.  Indeed, most American consumers of clothing wear cotton.  But to imply that it is out of some wholesome, patriotic reason would be to ignore where these clothes are made.  Most consumers likely choose (foreign manufactured) cotton T-shirts because they are comfortable- both on the body, and in the pocketbook.

When it comes to Christmas trees, people choose real or fake trees for a variety of reasons.  To blame the consumer's ignorance of the plight of the American Christmas tree farmer is tantamount to asking people to trade in their iPODs and stereos for a player piano.  You could say, BOTTOM LINE:  real music is made by American player pianos- fake music is digital and put on Chinese iPODs.  Some consumers prefer a fake tree over a real one, just as people over time decided new technology in music was more desirable than changing the rolls on a player piano.

What consumers are saying, as shown by the slump in sales, is they don't desire real Christmas trees.  A business is traditionally designed to respond to consumer demand, and make predictions as to what future demand will be.   Miscalculations leading to loss can not be blamed on the consumer- they are the sole responsibility of the firm who did not have the foresight to predict the change in the market demand for their product.  Unless the producer innovates, the firm is likely to go the way of the player piano, horse and carriage, and the dodo bird.  A fancy government marketing campaign will not change consumer demand- to ignore the market is to ensure your own peril.

A checkoff is not a “government marketing campaign” …why do you insist on believing that in spite of all the easy to understand facts?  A checkoff is a group of farmers pooling their OWN MONEY to market their crop and pay for ag research.  Please learn more about it.   This program is industry’s effort to persuade US consumers to buy US-grown, farm-raised Christmas trees instead of plastic trees imported from China.  Why would you be against family farms trying to make their businesses more successful?

I didn’t imply that people wear cotton for wholesome, patriotic reasons…I would think people, myself included, wear cotton clothing because it’s a quality product.  I cited it as an example of how a farmers’ checkoff program can be successful.  A Christmas tree farmer posted a guest blog about it this morning.  You can read it “from the horse’s mouth” proverbially speaking.

Let's look at the term "checkoff" using the information you gave me:

"The term 'checkoff' refers to the collection of a fee and comes from the concept of checking off the appropriate box on a form, like a tax return, to authorize a contribution for a specific purpose, such as the public financing of election campaigns, or, as in this case, the financing of programs to enhance producer welfare."

Anyone who has voted is likely familiar with this concept.  A checkoff in this instance is voluntary.  However, the article later states:

"Contributions to the earliest check-off programs were voluntary. These voluntary programs, however, were plagued by the problem of free-riders, which motivated the supporters of some programs to pressure state, and later federal, legislators to provide them with legislative authority for mandatory checkoff contributions."  (from the article you sent me)

When the program shifts from being voluntary to mandatory, it is by definition not a checkoff!  It is now a mandate.  You can call a rock a flower, and even make it to be legally named a flower, but that does not change it in the real world.

To answer your first question, I insist on calling this a government marketing campaign because it is a marketing campaign that the government administers.  How much more clear could it be?!

Your second (loaded) question is quite off-base.  A successful business is responsive to the demands of the consumer.  A business that miscalculates or ignores the reality in front of them will fail- as they should.  This is what spurs innovation, and creates the wonderful world of products around us- like iPODs, PCs, etc.  We could be having this chat over a telegraph or by snail mail, but I rather enjoy using email on the internet.  Should I be concerned for the families in the typewriter industry?

I find it interesting that you never really address the slumping demand for your industry's product in a meaningful way- your case instead revolves around emotional stories and bizarre guilt trips about buying American.  I wonder, will you make the contention that ignoring the consumer is a positive thing- that it is beneficial in any way?  To actively ignore the realities in front of you, with seemingly no market solutions in mind is a major disservice to the members of your organization.  They will either innovate and be successful, or languish forever- producing a good that increasingly becomes a novelty.

Postscript:  Although I was quite surprised the PR person was seemingly rude and confrontational, I was excited for the chance to defend liberty and discuss the relevance of the market economy.  Usually, one would expect a computer generated or otherwise benign response to such an inquiry, and it was refreshing that Rick was willing to engage in such a debate.  For more from their perspective, The National Christmas Tree Association has a blog called Tree Talk.

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