The 1st meeting of the Interim Joint Committee on Economic Development and Tourism was held on Thursday July 30, and Friday, 31, 2009, at 4:00 PM CDT Thursday and 9:00 AM CDT Friday, at the Mayfield Grain Company, Mayfield, Kentucky. Senator Alice Forgy Kerr, co-chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Alice Forgy Kerr, Co-Chair; Representative Eddie Ballard, Co-Chair; Senators Julian M. Carroll, Julie Denton, Denise Harper Angel, Jack Westwood, and Ken Winters; Representatives John "Bam" Carney, Larry Clark, Will Coursey, Jim DeCesare, Myron Dossett, Ted Edmonds, Mike Harmon, Joni L. Jenkins, Dennis Keene, Martha Jane King, Adam Koenig, Tom McKee, Tim Moore, Fred Nesler, Ruth Ann Palumbo, Ancel Smith, Tommy Thompson, and Addia Wuchner.
Guests: Roger Thomas, Executive Director, Governor’s Office of Agricultural Policy; Dennis Clark, Kentucky Soybean Association; Scott Wilferd, Farmer; Ron Conyea, Farmer; Mac Stone, Kentucky Proud, Department of Agriculture; William Knight, Director of Human Resources, Pilgrim’s Pride; Dan Ellison, Vice President, Kentucky Association of Conservation Districts; Gerry van der Meer, Commissioner, Department of Parks; and Kristin Branscum, Department of Agriculture.
LRC Staff: John Buckner, Committee Staff Administrator; Karen Armstrong-Cummings; Louis DiBiase; and Marlene Rutherford.
Following introductions, Roger Thomas, Executive Director of the Governor’s Office of Agricultural Policy, discussed the value of agriculture to local and state economies. Mr. Thomas explained that with the support of the legislature and the Governor, the Kentucky Agricultural Development Fund (KADF) has been instrumental in furthering Kentucky’s agricultural and economic development. He commended Mr. Don Goodin of the Cabinet for Economic Development for being an invaluable member of the Board. Thus far, the KADF, created by House Bill 611 during the 2000 General Assembly, has invested $286 million in tobacco settlement money into Kentucky agriculture through state and county programs. Mr. Thomas noted that from 2002 to 2007, Kentucky’s agriculture economy increased from $3 billion to over $4 billion through KADF investments. KADF has helped the Kentucky Proud program become successful. Mr. Thomas said that in the past six years over $7 million has been invested in Kentucky Proud, which has become the national model for the branding of agricultural products.
From 2002 to 2007, the KADF has helped the Kentucky’s poultry industry grow by $417 million and the beef cattle industry has increased from $622 million to nearly $1 billion. He noted that KADF funding requires a minimum of a fifty percent cost share.
Mr. Thomas said KADF has funded approximately $225,000 in Kentucky’s agritourism industry as well. Agriculture and agriculture-related businesses make up twenty percent of Kentucky’s workforce.
Mr. Dennis Clark, representing the Kentucky Soybean Association, explained the economic impact that soybean farming has on the state. In 2008, Kentucky produced 46 million bushels ($407 million) of soybeans. Of Kentucky’s 120 counties, farmers in 102 counties produce soybeans. Mr. Clark said Kentucky farmers want to be good stewards of the land by protecting the environment. He said the majority of Kentucky’s soybeans go toward feeding livestock and biodiesel production. In 2007, the United States produced 700 million gallons of biodiesel, which replaced 36 million barrels of foreign oil. Also, biodiesel production supported 52,000 jobs and contributed $4.3 billion to the United States economy. Kentucky has two biodiesel producing plants: Owensboro Grain and Griffin Industries of Coldsprings. Mr. Clark explained that other uses for soybeans include multiple food products, plastics, lubricants, printing inks, and expandable insulation, all contributing significantly to Kentucky’s economy.
Mr. Scott Wilferd, a Kentucky farmer and former board member of the Kentucky Corn Growers Association, explained that the perception of farmers has changed. He said farmers now spend time defending as well as promoting the farming industry. Today, farmers are more productive than ever while also being environmentally conscientious. Mr. Wilferd noted the importance of area economic development for corn production. During the 1980s, Graves County farmers produced 4 to 5 million bushels of corn annually. In 1991, with the addition of Seaboard Farms (now Pilgrim’s Pride) demand for corn production in the area, production increased to 7.5 to 8.5 million bushels of corn per year. Mr. Wilferd said economic development initiatives such as poultry plants and ethanol production facilities give corn farmers the incentive to meet demands. In 2008, corn became the top state agriculture product, producing $617 million due to increased demand. He said corn growers are overcoming challenges such as increased yield per acre, successfully meeting the demands of ethanol producers, all while maintaining environmentally sound farming.
Mr. Ron Conyea, a Graves County tobacco producer, said that before the industrial revolution, tobacco was Kentucky’s number one product. According to the 2000 Agriculture Census, tobacco produced $20 million gross income for Graves County and provided 200-300 full-time and 1,000 to 1,500 part-time jobs. Mr. Conyea said that tobacco farming in Graves County provides the same income that a manufacturing plant would create. He noted that manufacturing jobs have left the area while tobacco production continues.
Mr. Mac Stone, with the Department of Agriculture’s Kentucky Proud program, agreed with the other speakers in pointing out the heritage and culture of farming in Kentucky. He said the Kentucky Agriculture Development Fund is the driving force behind Kentucky Proud and allows them to work with retailers and schools throughout the state. He said Kentucky Proud is an empowerment program that works with restaurants by creating incentive programs to purchase Kentucky products. In turn, the restaurants advertise the Kentucky Proud logo. He noted that the pizza chain, Papa John’s, purchases large quantities of locally produced peppers and tomatoes. He said Kentucky Proud not only promotes food but other agricultural products as well.
Responding to Representative McKee’s question about supply concerns, Mr. Clark said that farmers can meet the demand and added that soybean based biofuels replaced 36 million barrels of foreign oil in 2007. Mr. Wilferd added that while there was an increase in corn prices due to supply concerns, this was only temporary. He pointed out the extreme fluctuations in oil prices last year. He said in time farmers will be producing surplus crops.
Representative Jenkins encouraged members to support local farmers markets and noted that the Department of Agriculture has been instrumental in funding many across the state. Mr. Thomas added that the KADF has funded over 100 farmers markets throughout Kentucky.
Mr. Thomas pointed out that Kentucky agriculture will be showcased at the upcoming 2010 World Equestrian Games and noted the importance of marketing Kentucky’s agricultural products to other countries.
Representative Ballard noted that First Lady Jane Beshear is deeply involved in promoting Kentucky’s agritourism industry. Mr. Thomas added that the First Lady is a spokesperson for agritourism and initiated the Capitol Farmers Market this year. She is intent on creating opportunities to help market local food products. Also, she is a spokesperson for the World Equestrian Games.
Representative Koenig asked how much of Kentucky’s agricultural products are exported. Mr. Wilferd and Mr. Clark said a majority of their crops remain in the state. Mr. Conyea said most tobacco he produces remains in the United States while 25 percent is exported overseas.
Representative Dossett said that the state’s agriculture industry has avoided major job loss during the recession. He noted that proposed federal “cap and trade” legislation could be detrimental to farmers and warrants attention.
Representative Carney said that dairy farmers are having a tough time and need government intervention.
Representative Nesler said Kentucky leads the nation in energy research with agriculture having an increasing role.
There being no further business for the day, the meeting recessed until Friday, July 31.
Friday, July 31, 2009
Senator Kerr called the meeting to order at 9:00 AM CDT.
Mr. William Knight, Director of Human Resources for Pilgrim’s Pride in Mayfield, gave an overview of the poultry processing plant. Founded in 1946, Pilgrim’s Pride has approximately 40 facilities throughout the United States, Puerto Rico, and Mexico. The Kentucky facility employs approximately 1,400 people and processes 2.1 million birds per week. There are 233 growers, 654 houses, and two hatcheries with hatching capacity of 2.6 million eggs per week. Mr. Knight noted that in addition to plant workers, they employ office and other personnel as well. Due to declaring bankruptcy, which necessitated the closure of several facilities, Pilgrim’s Pride is now the second largest poultry producer in the United States with 40,000 employees. These employees process 44 million pounds of poultry. In 2006, net sales of were $7.4 billion. Mr. Knight explained that the company also manufactures more than 155,000 tons of bulk and bagged feed per year for livestock and show animals. They export chicken and turkey products to more than 70 countries and produce 44 million dozen table eggs annually. Mr. Knight said while some Pilgrim’s Pride facilities are not profitable at this time, the Mayfield facility has made $9.5 million. Pilgrim’s Pride products are distributed to Cisco, Kentucky Fried Chicken, Church’s Chicken, Popeye’s Chicken, Chik-fil-A, ConAgra Foods, Kroger, Super Value, and Wal-Mart among others. Mr. Knight said the company strives to be a great place to work.
Mr. Dan Ellison, Vice President of the Kentucky Association of Conservation Districts (KACD), discussed conservation issues within the state. He said the KACD wants to maintain a conservation office in every county even though there have been office consolidations within state and federal agencies. Mr. Ellison said western Kentucky has an excellent supply of water, which was one reason Pilgrim’s Pride chose the area. Mr. Ellison reviewed the USDA’s 2008 Farm Bill Funding projects. The Conservation Security Program received $324,100, Environmental Quality Incentive Programs received $15.1 million, Wildlife Habit Incentive Program received $1.4 million, Wetland Reserve Program received $4.2 million and Technical Assistance received $22.82 million. Mr. Ellison reviewed the Purchase Area Kentucky Conservation Partnership’s accomplishments. Mr. Ellison said Purchase Area farmers practice soil conservation techniques and yield monitoring using GPS to be successful. He said farmers are using legislative funding wisely by practicing sound conservation techniques. Representative McKee added that money spent on farming and conservation is an investment in the future.
Commissioner Gerry van der Meer with the Department of Parks gave a brief history of Cherokee State Park. He thanked the members for supporting Kentucky’s state parks like Cherokee. He noted the park’s historical significance as being the only African-American state park in Kentucky during segregation and only the third in the nation. He said it is critical to preserve the park, one of a few remaining sites of its kind. Begun in 1948, Cherokee State Park was built to complement “whites only” Kentucky Lake State Park (now Kenlake State Resort Park). Upon desegregation, Cherokee Park was closed and annexed to Kenlake State Park. Six Cherokee Park cottages were relocated to Kenlake Park. Mr. van der Meer said future plans call for the original park manager’s house to serve as an interpretive and educational center for Cherokee Park. In January 2009, Cherokee State Park was added to the National Register of Historic Places by the National Park Service and was designated a Kentucky Landmark by the Kentucky Heritage Council. Currently, over $577,000 has been allocated for the renovation of the dining hall and lodge. Renovation is currently underway. He noted that renovation plans will retain as much of the original structure as possible. Completion of the expansion of Highway 80 will allow better access to the area.
Representative King expressed concern that state parks lack legislative-mandated lifeguards, which could possibly open the state to lawsuits. Commissioner van der Meer explained that while there are not lifeguards at some lakes, there are attendants. Signs informing patrons are posted as well.
Senator Carroll said it was important to continue funding Kentucky’s state parks.
Ms. Kristin Branscum with the Marketing and Product Promotion Office of the Kentucky Department of Agriculture gave an update on the state’s agritourism efforts. Currently, they are in the process of hiring a new director of agritourism in cooperation with the Department of Travel. Agritourism activities include visiting farms, orchards, trail rides, farmers’ markets and nurseries, distilleries and wineries, and barn quilt trails. Ms. Branscum noted that Kentucky now has 52 wineries. From 2003 to 2009, through a Rural Business Enterprise Grant and Agriculture Development Board funding, the Office of Agritourism has conducted a marketing study, worked on brand development, developed an advertising campaign, created a website, and has been able to offer some cost shares to regional tourism operations. Ms. Branscum said the Agritourism Advisory Council is composed of 27 members representing agritourism’s various areas of interest. They advise the Office of Agritourism and developed the “Kentucky Farms are Fun” brand. The website lists approximately 300 areas of interest with search capabilities. Ms. Branscum said the seven-county Cave Region agritourism group has worked with the Department of Transportation for six years on an agritourism signage pilot project. Paid for locally, the first signs were posted last week.
Ms. Branscum said the Agritourism office has changed its school education program by working with retail partners to include Kentucky Proud product discounts through its presentations. In the future, they would like local agritourism operators to visit classrooms as well.
Ms. Branscum explained that agritourism will be marketed at the 2010 World Equestrian Games. Tours and itineraries will be available for guests.
Ms. Branscum said the Office of Agritourism needs to secure additional funding. To help achieve this, they are looking to form partnerships to share funding. The Office would like to help promote the agritourism pilot signage program. The office is looking conduct familiarization tours with the media and to develop a group travel market. The Office of Agritourism’s goal is to continue to be a marketing resource to agritourism producers and assist in business growth.
Senator Westwood asked if the office had considered partnering with county extension agencies. Ms. Branscum said the office does work with county extension agents and an extension agent representative from the University of Kentucky is on the advisory council.
Senator Denton noted that during the last meeting of the Interim Joint Committee on Licensing and Occupations, winery owners expressed concern about the effects of prohibiting Sunday alcohol sales on their businesses and requested legislative intervention. She said dry counties have an effect on Sunday winery tours. Ms. Branscum said the Office of Agritourism is in favor of any efforts that support the wineries.
Senator Kerr announced there would be no August meeting.
There being no further business, the meeting adjourned.