Paying to promote corn; Checkoff to provide $2.5 million
BYLINE: Jenni Glenn, The Journal Gazette
Starting in July, a chunk of change from Hoosier farmers' corn sales will go toward industry marketing and research.
The marketing fee, called the corn checkoff, will be automatically deducted when farmers sell their corn to grain elevators or ethanol plants. The fee will be half a cent for every bushel sold. It can be refunded at the farmer's request.
Dean Eppley, chairman of the Indiana Corn Marketing Council, expects the new checkoff to bring $2.5 million to $3.5 million to research new uses for corn.
Gov. Mitch Daniels signed the checkoff into law two weeks ago, capping years of agricultural leaders' efforts to boost financing for corn research and promotions.
Farmers previously could pay the corn checkoff on a voluntary basis, but that only raised $40,000 to $50,000 per year, said Dean Eppley, a Wabash County farmer who is chairman of the Indiana Corn Marketing Council. The council decides how to spend the money raised by the checkoff. The automated checkoff could increase its finances to between $2.5 million and $3.5 million per year, he said.
"We were essentially reaching 1 percent of the corn producers with the current program," Eppley said. Many farmers did not know they could fill out forms to participate in the voluntary checkoff.
Checkoff funds could be used to promote ethanol, an alternative fuel made from corn, or to research other uses that could boost corn consumption, said Don Villwock, president of the Indiana Farm Bureau. Companies already are manufacturing carpeting and disposable dishes containing corn. Finding additional uses will help keep corn prices high for local farmers, he said.
Demand for ethanol has caused corn prices to surge in the last year. For that trend to continue, farmers need to educate consumers about the benefits of ethanol, said John Nidlinger, who farms 3,000 acres in Adams and Allen counties. Money from the corn checkoff will make that possible, he said.
"We're really stepping into a whole new horizon of demand for our grain," said Nidlinger, who is the former head of the Farm Service Agency in Indiana.
Purdue University in West Lafayette and other agricultural research universities stand to benefit from the automatic checkoff. Agricultural researchers at Purdue will be able to apply to the Indiana Corn Marketing Council for additional funding, said Marshall Martin, associate director of the university's agricultural research program.
Supporting the checkoff costs farmers only a small portion of their earnings, Villwock said. A farmer who raises 500 acres of corn and harvests 175 bushels an acre would pay $437.50 to the checkoff fund, he said. If corn prices were $3.60 a bushel, that farmer would earn $315,000 in gross income before the checkoff was deducted, he said.
Farmers who disagree with the program or cannot afford to contribute can request a refund. Grain elevators will distribute refund forms to farmers. If farmers request enough refunds during the program's third year, it can trigger the elimination of the checkoff. The state will halt the checkoff if more than a quarter of the money is refunded, Indiana Farm Bureau spokesman Lew Middleton said.
"If 25 percent of the farmers request a refund, that's a de-facto referendum" against the policy, he said.
Farmers already pay a mandatory soybean checkoff, which costs the same amount as the corn checkoff. The soybean program has financed research into soy candles, ink and plastics, among other projects, Nidlinger said. The corn checkoff will probably produce similar beneficial research, he said.
Because of the soybean checkoff, local grain elevators already have experience collecting the money, said Jeff Mize, president and chief executive officer of Ag Plus, a Whitley County farm services firm that operates grain elevators. Mize said Ag Plus will make few changes to prepare for the automatic corn checkoff.
Farmers will benefit from the automatic checkoff, the Indiana Corn Marketing Council's Eppley said. Money will be available for promotional signs on ethanol fuel pumps or research into the best uses for ethanol byproducts.
"There's going to be substantially more funding available to promote the use of ethanol, to fund research that will find additional uses for corn," he said.