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Iowa law allows 2-cent corn checkoff hike, if growers OK it

 

 

By DOUG SCHMITZ

Iowa Correspondent

 

JOHNSTON, Iowa — A new Iowa law will allow the state’s corn checkoff funds collected on each bushel to increase from 1 to 3 cents – but only if growers vote to approve it by a referendum, according to officials at the Iowa Corn Growers Assoc. (ICGA).

"Any decision regarding the checkoff rate would continue to be in the hands of Iowa corn farmers through a referendum, just as it was when created by the legislature in 1976 and voted on by farmers in 1977," said Roger Zylstra, Lynnville farmer and current ICGA president.

On March 26, Gov. Terry Branstad signed into law H.F. 2427, which unanimously passed both the Iowa House and Senate by a vote of 46-0 on March 18. Under H.F. 2427, the legislative cap for the corn checkoff would be raised to a total of 3 cents, with 1 additional cent (cap of 2 cents) available beginning Sept. 1, 2014, and a second cent (cap of 3 cents) available five years later, beginning Sept. 1, 2019.

"Nothing in this law changes the amount a farmer pays," said Mindy Larsen Poldberg, ICGA director of government relations. "Farmers currently pay 1 cent per bushel of corn and they will continue to pay 1 cent per bushel.

"We wholeheartedly support this legislation because we think farmers should decide for themselves to raise the checkoff. If the law had not passed, it would have been left up to the Iowa legislature to determine if there should be a referendum."

Mindy Williamson, ICGA director of communications and public relations, said the ICGA has recently been fielding questions from farmers and elevators regarding the corn checkoff rate in Iowa and the legislation that went into effect on July 1, because of some confusion over the new measure.

"The legislation only raises the legislative cap on the corn checkoff, allowing for incremental growth by farmer referendum," she said. "The legislation does not implement any changes to the current collection rate of 1 cent. "As a reminder, nothing in this bill raises the checkoff rate that the farmer pays; any increase in the checkoff rate may only be made by farmer referendum."

Craig Floss, ICGA CEO, added, "We’ve been hearing reports of people misunderstanding exactly what the law was all about. We’ve not had a significant number of calls, but enough that we want to get the word out that the checkoff rate is not changing at this time."

Established under a state law passed at the end of 1976, the Iowa corn checkoff’s rate of 1/10th of 1 cent per bushel was subsequently approved by the state’s growers in 1977. Since then, Iowa growers have voted four times by referendum to increase the corn checkoff rate.

In 2012, producers approved that amount, which meant state legislators had to update the law for the checkoff to go any higher, according to The Associated Press. To date, ICGA officials have no plans to increase the checkoff, which generates as much as $20 million a year. Once established, the checkoff began work within months to increase corn use. One of the Iowa Corn Promotion Board’s (ICPB) first goals was to up the use of high fructose corn syrup (HFCS), then a new product. The checkoff worked extensively with bottlers and soft drink companies and educated consumers and food professionals. In 1984, Coca-Cola and Pepsi-Cola approved using HFCS instead of sugar in colas.

Another high-profile accomplishment of the ICPB has been building acceptance of ethanol. Its efforts have targeted consumers, gas retailers and corn growers. Over the years, the ICPB has printed fact sheets, purchased radio commercials, sponsored a toll-free ethanol hotline and hosted pump promotions to demonstrate ethanol’s advantages and uses.

Between 2007-09, the ICPB has sponsored the Iowa Corn Indy 250 to showcase the power and performance of 100 percent fuel grade ethanol to an international audience. In 2008, the ICPB published five patents on products made from corn including sunscreens and plasticizers.

Recently, the ICPB has been working to educate consumers on the grower’s ability to produce corn for both food and fuel.

Most recently, the checkoff rate was overwhelming supported by 73 percent and currently stands at 1 cent for each bushel of corn sold into commercial channels – and is refundable. According to ICGA officials, the money is managed under the direction of the ICPB, Iowa growers elected by their peers, with the program governed by state statute.

Poldberg said a recommendation to hold a referendum would come from a vote of the ICPB, according to the Clarinda Herald. "The recommendation would then be forwarded to the Iowa Secretary of Agriculture (Bill Northey), who in turn would call for a referendum," the newspaper reported on July 10.

"Once a referendum is formally called, the individual farmers across the state would have the opportunity to cast a vote for or against increasing the amount of the checkoff."

7/17/2014