Call to Order and Roll Call
The meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on Wednesday, January 7, 2015, during recess of the Senate and House Chambers, in Room 129 of the Capitol Annex. Senator Paul Hornback, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Paul Hornback, Co-Chair; Representative Wilson Stone, Co-Chair; Senators Dennis Parrett and Robin L. Webb; Representatives Mike Denham, Tom McKee, Terry Mills, and Ryan Quarles.
Guests: Joel Neaveill, Bill McCloskey, Angela Blank, and Brian Murphy, Governor’s Office of Agricultural Policy.
LRC Staff: Lowell Atchley, Kelly Ludwig, and Kelly Blevins.
The December 3, 2014, minutes were approved, without objection by voice vote, upon a motion by Senator Parrett and second by Representative Mills.
Governor's Office of Agricultural Policy
Mr. Joel Neaveill, Chief of Staff, and Mr. Bill McCloskey, Director of Financial Services, Governor's Office of Agricultural Policy, summarized the project funding decisions by the Agricultural Development Board (ABD) during its December meeting.
Mr. Neaveill discussed tobacco settlement funding allocations for the previous months under the County Agricultural Improvement (CAIP) and Shared-use Equipment programs, and Mr. McCloskey summarized board approvals under the On-Farm Energy Program.
Responding to Co-Chair Stone, the speakers detailed some of the requirements of the On-Farm Energy Program, a cost-share program aimed at enabling farmers to increase energy efficiency in their operations. In response, Rep. Stone described the on-farm energy cost-share grants as “seed money” for farming endeavors.
Responding to Representative McKee, Mr. Neaveill made note of grants awarded under the Deceased Farm Animal Program. Mr. Neaveill indicated that he did not readily know how many counties operate disposal services for dead farm animals, but could provide that information later.
Mr. Neaveill and Mr. McCloskey summarized the statewide and regional agricultural investments approved in the prior board meeting: Kentucky Horticulture Council, approved for $1.3 million in state tobacco settlement funds to provide technical support to farmers through multiple council programs; Kentucky Dairy Development Council (KDDC), $2,108,500 to continue various KDDC education and promotion programs; Gateway Farmers Market, Warren County, $220,000 in state funds and $61,500 in county funds to build a regional farmers market and renovate a building for a commercial kitchen; Kentucky Department of Agriculture $3,490,000 to fund several facets of the Kentucky Proud agricultural marketing and promotional program; Kentucky Beef Network, $1,869,016 for programs to educate and assist cattle farmers; Todd County Fiscal Court, $30,000 for a feasibility study to look at the potential development of natural gas supply for portions of Todd County; Franklin County Fair and Horse Show, $2,100 for upgrades to a multipurpose pavilion; Jessamine County 4-H Council, $3,000 for a country ham curing house. Ballard County Board of Education, $4,396 to be used for purchase of equipment and materials for a high school greenhouse; LaRue County Extension District Board, $2,500 for a country ham curing structure; Appalachian Alternative Agriculture of Jackson County, $21,000 for operating capital for a regional food center.
The speakers responded to committee members’ questions on the KDDC funding and the state of the dairy industry in Kentucky. Mr. Neaveill said that while the number of producers has declined, milk production has remained steady. During the discussion, Senator Parrett lauded the funding commitment and said he believed that even though the number of producers has declined, but not the number of dairy cattle. Because of the KDDC funding and rising milk prices, dairy producers have been able to invest in new equipment, according to Senator Parrett.
During the Gateway Farmers Market discussion, Co-Chair Stone told the committee the market is part of a significant development endeavor in Bowling Green.
Responding to Representative Quarles, Mr. Neaveill said he was not aware of any year-round enclosed farmers markets in Kentucky, although a market in Pleasureville buys farmers’ commodities and will be a year-round operation.
In answer to Co-Chair Hornback, Mr. Neaveill said he did not know what percentage of Kentucky Proud dollars is spent on Kentucky-produced commodities, but would obtain that information from the Department of Agriculture. He noted that one part of the Kentucky Proud program, Restaurant Rewards, provides incentives to eateries that buy Kentucky foodstuffs.
The speakers told the committee that $2 million-plus in matching funds going to the Kentucky Beef Network is in the form of in-kind services provided by the University of Kentucky. Responding to Representative Mills, Mr. Neaveill said funds to be used for water and nutrient management would be spent on education materials.
Committee members had several questions and comments on the Todd County Fiscal Court natural gas supply feasibility study. Senator Parrett alluded to a possible precedent in granting the funding. Mr. McCloskey explained the Todd County Agricultural Council endorsed the project funding and the board looks at those local level approvals as “county decisions.” He also said Todd is an agricultural county and is attempting to attract businesses. He said the county is looking for ways to obtain low-cost utilities that would help the agriculture industry.
Responding to Representative Denham, who asked if the applicant would be eligible for additional funding should the feasibility study turn out favorably. According to Mr. McCloskey, the board may be reticent to commit funds to a natural gas project but could receive consideration if a project benefits farmers. Representative Denham informed the speakers that a community in his district has a similar project. He mentioned the economic woes still being felt in rural areas and the loss of jobs because of outsourcing.
In answer to Co-Chair Hornback, the speakers explained the rationale in funding the Appalachian Alternative Agriculture of Jackson County endeavor. GOAP staff indicated that the Kentucky Center for Agriculture and Rural Development is assisting the enterprise. According to Mr. McCloskey, producers are using the facility to help process, package, label, and market their food products, but not enough people are using the facility to help create a positive cash-flow situation. They also mentioned some long-term governance problems.
Documents distributed during the meeting are available with meeting materials in the LRC Library. There being no further business, the meeting was adjourned.