Most commodity boards are created by a referendum and an act of law, and are guided by a marketing order. Legislation can be either state (the California Milk Advisory Board) or federal (the Almond Board). Category programs, including ad campaigns, can also be run by industry associations. A common misperception is that public taxes fund these programs. Typically, industry (or association) members are assessed on an agreed-upon formula. The industry nominates a board of directors from its ranks and hires an executive director and staff to manage the program. In turn, the staff directs a range of independent contractors, such as public relations and advertising agencies, and market research companies. If legislated, the state or federal department of agriculture has ultimate oversight. With few exceptions, the overriding goal is to increase demand for the crop or products the industry produces.
It’s important to know what commodity boards can and can’t do. Most critically, commodity boards cannot: 1) set or influence prices; 2) promote or favor one brand or industry member; 3) control quality or supply; or 4) lobby. Moreover, they do not sell products—members do the selling.