WPIB Increases Assessment by One Cent; Will Dedicate $500,000 Annually for Potato Research Fund

The Wisconsin Potato Industry Board unanimously passed a motion at its June 16, 2016 meeting that will dedicate $500,000/year for the next ten years toward a potato research fund.  The motion includes an assessment increase of one cent per hundredweight effective July 1, 2016 and an allocation of $250,000 from the current budget.  The motion states: To allocate $250,000 from the 2015-16 WPIB budget and increase the assessment on Wisconsin potatoes by one cent/cwt. beginning July 1, 2016 to dedicate $500,000/annually for the next ten years to a Wisconsin Potato Research Fund where funds are controlled and directed by potato grower representatives.

The WPIB was in essence approving a recommendation made by the WPVGA Board of Directors asking for an increase in the assessment to create a Donor Advised Fund through the University of Wisconsin Foundation.  The goal was to generate $10 million with $5 million generated by the WPIB and the balance through in-kind and/or private contributions.

The request from the WPVGA was for a 2 cent/cwt. increase in the current Wisconsin potato assessment dedicated to the fund over 10 years.  However, WPIB rules limit assessment increases to no more than one cent per year.  Thus the WPIB decided to increase the assessment one cent effective July 1, 2016 and allocate $250,000 from reserves to generate the goal of $500,000 the first year.   (A one cent per hundredweight assessment is expected to generate approximately $250,000/year.) The WPIB will consider an additional one cent assessment increase next fiscal year (2017-18).

The University of Wisconsin Foundation Donor Advised Fund (DAF) is structured as a quasi-endowment and would have potato industry representatives as an advisory group which can direct the funds to support areas that it determines to be its priorities.  There are no operational details included in the DAF, which allows the advisory group the flexibility to support changing priorities over time.  The WPIB plans to carefully review the structure of the DAF prior to making the actual commitment of funds.

Both the WPVGA Board and the Wisconsin Potato Industry Board believe a new funding model is necessary to maintain and grow the existing UW potato and vegetable research team into the future. Alternative financial support from industry or alternative sources will be necessary to maintain the partnership between the WPVGA and the University of Wisconsin. Funding is specifically needed to:

1. Support salary and fringe benefits for future faculty vacancies;
2. Support operational and maintenance costs for agricultural research stations; and
3. Enhance the salary for current faculty to maintain the competitiveness of the UW.

Wisconsin’s potato assessment will change from six cents per hundredweight to seven cents per hundredweight effective July 1, 2016.  All Wisconsin potatoes sold after June 30, 2016 will be subject to the seven cent/hundredweight assessment.