January 26, 2015 | Business Lexington
The Kentucky Agricultural Development Board (KADB) capped off a record year of investment in December with some sizable investments for state agriculture programs and initiatives.
Counting the more than $10 million doled out at the group’s last meeting of 2014, KADB sent more than $43 million of Kentucky Agricultural Development Funds (KADF) to state agriculture projects last year. The December disbursement went to 48 agricultural diversification and rural development programs and projects, according to information from the Governor’s Office of Agricultural Policy (GOAP). That agency serves as the administrative arm of the KADB, which oversees the fund.
The latest projects approved show the direct impact of the KADF and its widespread reach across the Commonwealth, said Governor Steve Beshear, who chairs the board.
“Over the past 14 years, every county in Kentucky has benefited in some way by the Kentucky Agricultural Development Fund,” he said.
December’s meeting included the announcement of some big-ticket programs, including: a total allocation of $3,490,000 in state funds for 2015 and 2016 to fund the Kentucky Proud Program; $2,108,500 for the Kentucky Dairy Development Council; $1,869,016 for the Kentucky Beef Network, LLC; and $1,300,000 to the Kentucky Horticulture Council, Inc.
Joel Neaveill, GOAP chief of staff , said the investments from the KADF have been used for a variety of projects, as was indicative of the December meeting.
“This is symbolic of the kind of great success and the amount of funds that have been committed throughout the year,” he said.
One of the largest investments of the year, at $7.5 million, went to the Agriculture Finance Corp., a loan program that provides funds to beginning farmers and for on-farm infrastructure. Total assets for that program amount to approximately $43 million in the loan pool.
“Should the KADF end, that loan program will continue on, as long as everybody continues to make their payments and we’re making good loans,” said Neaveill.
These investments made over the past decade and a half have made Kentucky a model for other states that also receive funding from the Master Settlement Agreement (MSA), the origin of the KADF. The Ag Development Board was created by statute in 2000 and reinvests 50 percent of those MSA funds to state agriculture. Many credit that structure as the major factor in creating a strong ag sector, as evidenced during the last recession, when Kentucky’s ag industry was one of the few that flourished.
Neaveill said there is a high level of accountability in place for the fund, including a legislative oversight committee that reviews all board decisions.
“I think there is accountability built throughout the process that provides a lot of credibility,” he said. “It’s always a work in progress, and we’re always looking for continuous improvement. I think we’re really pleased with the progress that’s been made but still see a lot of demand for the investments in the programs.”
A study was conducted by the University of Kentucky to evaluate the KADF between the years of 2001 and 2007. That study found that, “on average, every dollar invested from the KADF in non-model projects resulted in $1.87 of additional farm income.”
Neaveill said another such study is in the works to review the degree of impact the KADF investments have made on the state’s agriculture sector from 2007 to 2014.
“It’s always important to reflect back on the work that you’ve done so you develop a roadmap for the future,” he said.
Neaveill said he expects the findings of this second study to be just as positive, in part because of the fine-tuning of processes and procedures that have been a part of the KADF. In addition to the larger, often very visible investments made through state funds, the KADF also has been beneficial to smaller, more localized projects through county funds.
“This December meeting, I think, represents all the KADF was created for, including the county level through county councils,” he said.
Recent county-fund investments included projects with greenhouses, 4-H ham curing sheds, and statewide on-farm energy investments, as well as support for regional farmers’ markets.
While those in the ag industry are familiar with the KADF and what it has meant to Kentucky agriculture, Neaveill said he thinks those outside of agriculture are less aware of the fund’s far-reaching effects.
To learn more about the KADF and the investments made, go to http://agpolicy.ky.gov.
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