Jun 16, 2016Michigan assessment rate raised one-half cent
The Michigan Potato Industry Commission at its June 14 meeting approved an increase of half a cent per hundredweight (cwt) in the assessment rate for the 2016 crop. The amount will be 5.5 cents per cwt, allocated as 4.0 cents for growers and 1.5 cents for shippers. It is the first hike since 1998, when the previous 4.0-cent assessment was raised to 5.0 cents.
It is also the first adjustment under the new rate-setting system set up two years ago by amendments to the commission’s authorizing law and subsequently approved through a grower referendum. Previously rate changes had to undergo a lengthy petitioning and referendum process. Now the commission sets the rate on an annual basis to adapt to the production and marketing environment affecting the industry at that time. The amended law caps the assessment rate at 7.0 cents per cwt but also gives the commission the flexibility to lower the rate if conditions warrant, such as a significant surplus on the commission’s balance sheet.
The commission’s executive director Mike Wenkel noted that operations under the static rate the last 18 years have had to adjust to a shrinking value of the dollar. The official Consumer Price Index has risen by 46 percent from 1998 to 2016, meaning that a $10 purchase 18 years ago would require $14.60 today.
