By TIM THORNBERRY
Kentucky Correspondent

FRANKFORT, Ky. — The agricultural landscape has changed drastically during the past decade with many farmers bowing out in the wake of those changes.

In 1997, Kentucky was home to more than 40,000 tobacco farms; but as quotas fell and then with the passage of federal quota buyout legislation, that number fell to approximately 8,000.

The Kentucky Agricultural Development Fund (KADF) was designed to ease the pain of those transitions. The system was devised as a way to distribute half of the revenue from the Master Settlement Agreement (MSA), the landmark settlement between 46 state attorneys general and the four largest tobacco companies at the time of the agreement, in 1998.

Kentucky’s General Assembly passed legislation in 2000 creating the Agricultural Development Board (ADB,) the entity that would be in charge of distributing the revenue. Sixty-five percent of those funds would be allocated for statewide projects, with the remainder going to counties under the oversight of County Agricultural Development Councils.

To date nearly $300 million has been invested in more than 3,600 projects. Marking the 10th anniversary of the fund, Kentucky Gov. Steve Beshear posted on his blog, “We’re talking about initiatives like farmers’ markets, alternative energy ventures like switchgrass and miscanthus, our growing grape and wine industry, agritourism and the Kentucky Proud program.”

That kind of variety has helped to keep state agriculture a leading economical industry to the tune of more than $4 billion in annual cash receipts for the fourth year in a row and the fifth time in the past six years, something once thought of as impossible with the fall of tobacco production.

In 2007 the ADB contracted with the University of Kentucky to conduct a study to examine the impact of the KADF during a 7-year period. The report noted that from 2001-07, the ADB investment of $86 million in statewide, non-model programs had a “significant positive impact on agriculture and agribusiness.”

That investment created an additional $161 million in farm income, created or expanded markets for 148 products, and generated about 1,300 new jobs. The study also found that, on average, every dollar invested from the ADF in non-model projects resulted in $1.87 of additional farm income.

To celebrate the anniversary of the fund, agriculture leaders gathered at the Governor’s Mansion recently to hear from among others, former Gov. Paul Patton who proposed the use of 50 percent of the MSA funds to go back into the state’s agriculture industry.

During the ceremony Beshear told the gathering how important agriculture has always been to the state’s economy and announced that he was signing a proclamation marking April 26 as Kentucky Agricultural Development Fund Day to acknowledge the success of the fund and its achievements.

“As you all well know, agriculture has been the cornerstone of Kentucky’s economy since before we became a state. As far as I am concerned, it’s going to be the cornerstone of our economy for many years to come,” he said. “There is something unique about Kentucky agriculture and the tradition, the culture and the values that it contains and brings to the table. I think that is part of why Kentucky is such a special place.”

Roger Thomas, executive director of the Governor’s Office of Agricultural Policy, the agency that oversees the ADB, told the gathering Kentucky is unique in what it has done regarding agriculture.

“Nowhere else in this great land of ours could this event have taken place because Kentucky is the only state that made this kind of commitment to agriculture,” he said. “This fund has touched all 120 counties across the Commonwealth. It has been a grassroots initiative from our farmers to the county council members to our extension agents, program administrators all across the state, and all the commodity groups working together, along with working with government, the universities, the private sector, policymakers and many more working together to make this program unique and recognized nationally for it innovation.”

Thomas recognized many of the agriculture and legislative leaders present and those unable to attend for their leadership in bringing the KADF to life.

Patton was at the head of the list as he was serving his terms during the period when the MSA was signed and was instrumental in getting the process started.

Patton told the crowd that because of the fund, small farms have remained a pivotal part of the state’s economical landscape.
“I didn’t know a lot about agriculture but I knew that the opportunity to raise a family in rural Kentucky was important and perhaps the essential element of the character of Kentucky and a valuable element. And that had been made possible by in large by our tobacco quota program,” he said. “I saw that beginning to erode, so I supported something that would allow us to have a chance to keep the small Kentucky family farm.

Patton also said that since his time in office, the fund has continued to be supported by his successors.

“I think that is important and it continues to work and having the opportunity to be a part of it, I’m very proud,” he said.