Call to Order and Roll Call
The 4th meeting of the Tobacco Settlement Agreement Fund Oversight Committee was held on Wednesday, May 4, 2016, at 10:00 AM, in Room 129 of the Capitol Annex. Senator C.B. Embry Jr., Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator C.B. Embry Jr., Co-Chair; Representative Wilson Stone, Co-Chair; Senators Carroll Gibson, Paul Hornback, Dennis Parrett, and Robin L. Webb; Representatives Mike Denham, Tom McKee, Terry Mills, Jonathan Shell, and James Tipton.
Guests: Warren Beeler, Executive Director, Governor’s Office of Agricultural Policy, Bill McCloskey, Director of Financial Services, Governor’s Office of Agricultural Policy, and Maury Cox, Executive Director, Kentucky Dairy Development Council.
LRC Staff: Lowell Atchley, Kelly Ludwig, and Marielle Manning, Committee Assistant.
Upon motion made by Representative Mills and seconded by Representative Shell, the March 2, 2016 minutes were approved, upon voice vote and without objection.
Governor’s Office of Agricultural Policy
Mr. Warren Beeler, Executive Director, and Mr. Bill McCloskey, Director of Financial Services, Governor’s Office of Agricultural Policy (GOAP), presented the projects receiving Agricultural Development Board approval at its March and April 2016 meetings. Those included approved amendments, a ham curing facility, upgrades to the 65 Kentucky Mesonet sites, an indoor agri-business facility, On-Farm Investments, Environmental Stewardship, Shared-use Programs, and major statewide or regional projects.
GOAP representatives responded to committee members’ questions about the Deceased Farm Animal Removal Program and Shared-use funding commitments.
Responding to Representative Stone, Mr. McCloskey explained that the dead animal remains taken either to landfills or rendering facilities. The Shared-use Programs are either 50-50 or 75-25. In the March and April meetings, there were three shared-use programs in which the counties provided 75 percent of the purchase price and the applicants provided 25 percent.
Responding to Senator Gibson, Mr. McCloskey explained the $75 rental charge with a $10.50 per acre fee, and a $2 discount for a single usage of greater than 50 acres, for Graves County equipment. The rental money goes toward the conservation district to maintain the equipment and/or eventually to provide 25 percent of the purchase price for new equipment. There is an hourly rental fee of $20 for the Pulaski County equipment. A minimum rental is $60 or three hours. Union County provides the equipment for $20 per day. Mr. McCloskey explained the applicant received the rental money in order to fund maintenance and for new equipment purchases.
Responding to Representative Tipton, Mr. McCloskey explained there was an annual usage report required for a five year period on the equipment.
GOAP officials answered questions about the approved amendments to the CAIP program.
Responding to Representative Stone, Mr. Beeler said that 23 of the 40 young farmer applicants scored high enough and that scoring for the Next Generation Farmer program was similar to CAIP system.
The committee received reports on four regional projects: (1) Owen County 4-H Club Council Inc., approved by the board for $1,090 in Owen County funds to purchase a ham curing facility; (2) Western Kentucky University Research Foundation, Inc., approved by the board for $105,250 in State funds for instrumental upgrades to the 65 Kentucky Mesonet sites in Kentucky; (3) Gateway Gardens, LLC, approved by the board for $500,000 in state funds to establish a commercial scale automated indoor agri-business facility in Boyd County that will focus on year-round short leaf lettuce production; and (4) Appalachian Alternative Agriculture of Jackson County, Inc., approved by the board for $10,000 in Jackson County funds and $10,000 in state funds for sustaining the operation of the Jackson County Food Center to remain open for clientele to process, package, and label locally grown food to be sold as value-added products.
GOAP officials explained the Owen County 4-H club Council, Inc. project and the Western Kentucky University Research Foundation project.
GOAP officials responded to the committee members’ questions about the Gateway Gardens, LLC project.
Responding to Representative McKee’s question, Mr. Beeler said four individuals of Gateway Gardens, LLC, are the personal guarantees. The project is a loan that will be collateralized.
GOAP officials explained the Appalachian Alternative Agriculture of Jackson County, Inc. project.
Kentucky Dairy Development Council
Mr. Maury Cox, Executive Director, and Mr. Richard Sparrow, President, offered a presentation on the vision, mission, goals, programs, and results of the Kentucky Diary Development Council and the Kentucky Agriculture Development Fund.
In response to a question from Senator Parrett’s question, Mr. Cox said about 273 dairies are in the MILK program.
Responding to Senator Gibson’s question about ranking production, Mr. Cox said Kentucky ranks about 40th compared to all other states.
Responding to Representative Tipton’s question, Mr. Cox the MILK program is about 68 percent in Class 1 utilization. Kentucky is probably leading the nation in the usage of compost bedded pack barns.
Responding to Senator Webb’s question, Mr. Cox said one current issue is that several young producers have applied for operating loans and have been turned down because they do not have a Kentucky Nutrient Management Plan. Mr. Sparrow said the biggest limiting factor they have is the economics of producing milk in a world market. Kentucky needs to compete better with larger milk producing states or countries.
Responding to Representative Denham’s question, Mr. Cox explained that only 13 dairies were lost in the first quarter, while 14 new dairies started in the first quarter. However, the problem is that milk hauling is unaffordable.
Documents distributed during the meeting are available with meeting materials in the LRC Library. There being no further business, the meeting was adjourned.