O Christmas Tree! O Christmas Tree! Such Cronyism Do You Bring Me!

Christmastime is traditionally associated with carolers, the act of giving, and the fresh pine scent of decorated Christmas trees. However, that fresh pine scent might cost you a little more this year.

Starting in 2015, Christmas tree growers and importers that sell more than 500 trees will have to pay $0.15 per tree to the Christmas Tree Promotion Board, a research and promotion program backed by the federal government.

How did government get involved in the Christmas tree business?

Christmas tree growers found a way to use the power of the federal government to obtain an advantage over their competition, artificial Christmas tree companies, through promotional and marketing campaigns funded by a mandatory fee levied on all members of their industry. Using the backing of the government to gain privileges over competitors is a form of cronyism.

A few years ago, Christmas tree growers witnessed their sales decrease while sales of artificial trees increased. They decided to join forces to finance promotional campaigns for natural trees, but few ended up participating.

Another solution to help them fight competition was to turn to government. Again, some growers teamed up to create a task force to study the opportunity of creating a research and promotion program similar to already existing ones, such as the American Egg Board and the Popcorn Board. Under such programs, a mandatory assessment is levied by the promotion board, with oversight from the federal government, on members of the industry to finance marketing campaigns.

“It’s backed up by the USDA, so I think most people will take it seriously,” declared a member of the Christmas Tree Promotion Board who is a production manager of a major tree grower.

In 2010, growers recommended a rule that was adopted in 2011 and then quickly suspended due to public backlash. Many customers saw the $0.15 assessment as a tax, since growers would be allowed to pass it on to them. Supporters of the program didn’t give up, though, and the rule was adopted again in 2014. Finally, the assessment will be collected this holiday season.

Over the years, shoppers have increasingly chosen artificial trees because they present advantages customers value over fresh-cut trees: Artificial trees are reusable and do not shed their needles, leaving a mess to clean up once the holiday is over. But the newly created promotion board disagrees with these customers’ choice.

According to the executive director of the Christmas Tree Promotion Board, “Christmas tree growers feel that easy isn’t the right choice. A real fresh cut Christmas tree is the right choice and they wanted to get in the game and market.”

Agricultural weekly Capital Press reports that the program “has the authority to subpoena and review business records” and that “farmers who don’t pay their fees are subject to civil penalties.”

In a truly free society, producers would be free to join forces to promote their businesses, but they could not use government to force every member of their industry to participate and financially support campaigns against their competitors. Nor could they use the backing of the government to gain advantage over their competitors.

For Jerry Windsor, a tree farmer, “the mandatory Christmas tree checkoff won’t be welcomed across the board by growers, but it’s a necessity.”

A better solution for growers would have been to create additional value for their customers, even if that meant reinventing their business. Sadly, they chose cronyism.

Martinez-Gouhier is a research associate at the Charles Koch Institute and a current participant in the Koch Associate Program. 

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