Indiana's quandary

McCain's made it difficult for Republicans in farming states like Indiana who resent his voting reco

"It don't bother me that he's black. But I do worry that he's a muslim."

It's a guy sat at the counter of a bar in Columbus, Indiana who tells me this, as his neighbour solemnly nods along. (The barman, to his credit, rolls his eyes and says, "Oh come on," before going off to serve someone else.)

Nonetheless, my guy is planning to vote for Barack Obama, simply because it's time for a change. "Washington needs an enema," he says firmly. "If he tries any of that Muslim stuff we can always throw him out."

No one really expected Indiana to be in play. It's voted Republican in every presidential election since 1964. But with farmers struggling, manufacturing's down the pan and nearly one million new voters on the rolls since 2004, polls are showing the state is tied. Indiana is likely to be one of the first results called on election day: if McCain doesn't have a clear lead here, it's hard to see how he can pull off a win.

Obama's success can be explained partly by the fact that he is, effectively, a local boy: the northern part of the state, around Gary, is one big suburb of Chicago. And partly also it's because, scenting victory for the first time in 40 years, local Dems are unusually energised.

But the biggest thing in Obama's favour is that, as much as anywhere in the nation, the conversation in Indiana is all about the economy. Much of the state is dominated by farming. And the farming industry has been hit by a catastrophic combination of soaring costs, fluctuating corn prices and flooding. Many farms have thus been left with hundreds of thousands of dollars of debt and no idea of how to pay it back.

The state's other major industry, manufacturing, has long been in decline right across the Mid West, a trend that's cost Indiana over 100,000 jobs since the decade began. But this is causing problems even in rural parts of the state: many farming families have one member in regular employment, to ensure the entire family has health insurance. As manufacturing has declined, health coverage has collapsed.

Obama's focus on the economy and healthcare is thus resonating surprisingly well in natural Republican territory.

Nonetheless, he wouldn't be so competitive here if McCain hadn't obligingly spent his career alienating the entire farming lobby. He's opposed both last May's pork-laden farm bill and subsidies for ethanol based fuel. (This, incidentally, also partly explains his weakness in other farming states like Iowa and Wisconsin.) The Republican also looks under-resourced out here: he has a single co-ordinator to cover the entire Great Lakes region.

That said, Obama's tax plans are also putting the wind up people in a state full of large land holdings. "McCain's posed quite a quandary for Republican farmers," says Kent Yeager, public policy director at the Indiana Farm Bureau. "The polls show it close here - but I can see it not being close at all either way."