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Indiana considers automatic withdrawl corn checkoff
By SUSAN BLOWER
Indiana Correspondent

INDIANAPOLIS, Ind. — The Indiana Corn Growers Assoc. last week presented its plan to amend the state’s corn checkoff program before the Committee on Agriculture and Rural Development.

“The creation of a strong, viable corn checkoff program for Indiana will not only complement the state’s new strategic plan for agriculture - it will create new markets for Indiana corn growers and help create new jobs in rural Indiana,” Matt Gibson, ICGA president, told the Indiana House of Representatives committee.

Gibson asked the ag committee to support the new plan outlined in House Bill No. 1378.

Under the new plan, corn growers would contribute 1/2 percent of the value of a bushel rather than the current 1/2-cent per bushel. For example, under the current system, participating growers who sell 100 bushels of corn would give 50 cents to the program.

The new plan would increase that amount to $1 if the price per bushel were $2. If the price per bushel were $3, the farmer would contribute $1.50 to the program.

Gibson said that although the proposed amendment calls for a rate increase, the proposal offers greater flexibility and fairness by reducing collections when prices are low and increasing collections when prices are higher.

Gibson noted that the rate proposed is the same rate as the current soybean checkoff.

Participation in the program would still be voluntary; however, the contribution would automatically be taken at the time of sale. Farmers would be entitled to a full refund upon filing a request with the Indiana Corn Marketing Council.

Gibson said that historically up to 20 percent of farmers opt out of such a program. Even accounting for several exemptions to the checkoff, the ICGA estimates that participation in the program would rise from a dismal 1 percent of all state growers to at least 70 percent.

That increased level of participation would bring revenues up from $50,000 this year to between $5.5-$6.5 million.

Citing several polls, Gibson said the lack of financial support does not indicate that corn growers are against the checkoff. Rather, the administration of the current program is too cumbersome, he said. Farmers who want to participate have to fill out forms. Providing those forms is the shared responsibility of checkoff administrators, the Indiana State Department of Agriculture and first purchasers. The paper trail tends to meander, making it difficult to track participants and the effectiveness of the program.

Gibson did not provide Indiana’s corn checkoff revenue figures for any fiscal year but 2004.

Behind other states
Increased revenues will be put to good use for Indiana growers, the ICGA believes.

“We have great programs put together that have one thing in common - inadequate funding,” Gibson told committee members. Among the critical needs of the corn industry, Gibson highlighted the growing ethanol industry. With new plants in the works across the state, he said new markets would have to be developed for these plants.

Indiana lags far behind other corn-producing states in research and development of corn markets and products. Iowa leads the way in checkoff collections with $6,995,728 for fiscal year 2004.

Indiana was outpaced by the other top 10 states; all but one were in the million-dollar range. (The exception was Wisconsin with $178,557 in revenues.)

“All of these are state-based checkoff programs that are managed by producers - who direct the investments toward those activities that provide the greatest return for the industry,” Gibson said.

“For example, the Iowa Corn Checkoff, first established in 1977, has established a new grant program that helps launch new corn-utilization businesses within the state,” he added.

“If Indiana does not invest in its corn industry, we face serious jeopardy in maintaining a strong and active corn market within our state.”

In addition, he said other states’ checkoff funds have unfairly shouldered the burden of national and international investments to promote new markets and research, which have benefited Hoosier farmers for years.

The proposed amendments would also bring Indiana’s corn industry in line with other major commodities in the state, Gibson said.

Indiana’s soybean farmers contribute about $7 million annually toward soybean research and promotion under the current federal soybean checkoff.

He also cited other annual federal checkoff figures: Indiana’s pork industry - $2.9 million and the state’s beef industry - $267,000. The current corn checkoff program, adopted by the state in 2001, is not working, Gibson said. With the growth of the ethanol industry in Indiana, a new state program is needed more than ever to invest in ethanol promotion, he said.

“Checkoff programs have a long and proud history of being farmers, managed by farmers, for the benefit of farmers. We need your assistance, however, in helping move Indiana into its rightful place of leadership in the national corn industry by passing House Bill 1378,” Gibson concluded.

Published in the January 25, 2006 issue of Farm World.

1/25/2006