Many states permit agricultural producers to form a voluntary market association to promote their commodities. For example,
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Many states permit agricultural producers to form a voluntary market association to promote their commodities. For example, a Corn Producers Association may be formed to promote consumption of corn-based products including corn chips and ethanol-based fuel. To fund these marketing activities these associations often require a so-called “check-off,” which is a per unit of production fee (alias tax) required of producers. Why would individual corn farmers join such as association and be willing to pay the check-off fees for such services? Explain using club theory.
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The association provides benefits that are enjoyed by each member thus justif...View the full answer
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