Interim Joint Committee on Agriculture


Minutes of the<MeetNo1> 6th Meeting

of the 2010 Interim


<MeetMDY1> December 8, 2010


Call to Order and Roll Call

The<MeetNo2> 6th meeting of the Interim Joint Committee on Agriculture was held on<Day> Wednesday,<MeetMDY2> December 8, 2010, at<MeetTime> 10:00 AM, at<Room> the Kentucky State University Research Farm in Frankfort. Senator David Givens, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator David Givens, Co-Chair; Representative Tom McKee, Co-Chair; Senators Ernie Harris, Bob Leeper, Vernie McGaha, Joey Pendleton, Kathy W. Stein, Damon Thayer, and Ken Winters; Representatives Royce W. Adams, John "Bam" Carney, Mike Cherry, James R. Comer Jr., Mike Denham, C. B. Embry Jr.,  Richard Henderson, Charlie Hoffman, Terry Mills, Brad Montell, Fred Nesler, David Osborne, Sannie Overly, Don Pasley, Tom Riner, Steven Rudy, Dottie Sims, Kent Stevens, Wilson Stone, Tommy Turner, Ken Upchurch, and Susan Westrom.


Guests: Mr. Todd Leatherman, Office of the Attorney General; Dr. Robert Stout, State Veterinarian; Dr. Mary Evans Sias, Dr. Kimberly Holmes, Dr. James Tidwell, Dr. Harold Benson, Dr. James Chapman, Dr. Michael Bomford, and Dr. Ken Adries, Kentucky State University.


LRC Staff: Lowell Atchley, Biff Baker, Stefan Kasacavage, and Kelly Blevins.


Update on the status of Eastern Livestock Company

Mr. Todd Leatherman of the Office of the Attorney General stated that his office is working with the USDA, the US Attorney’s Office, the Kentucky Department of Agriculture, and other agencies regarding the Eastern Livestock Company situation. His office is trying to identify farmers, stockyards, and others that may have received bad checks or no checks at all for their cattle or services.


Mr. Leatherman gave a chronological overview of the legal actions that have taken place against Eastern since early November. It is estimated that over $80 million in bad checks were written and that total debts will exceed $130 million to over 700 producers.


Dr. Robert Stout, Kentucky Department of Agriculture, gave an overview of the department’s role in overseeing stockyards. Kentucky law addresses the licensing and bonding requirements for stockyards, dealers, and others in the industry. Stockyards and dealers are required to be licensed through the department, but their bonding requirements are set by the USDA Packers and Stockyards Administration (PSA). PSA has a formula that determines the amount of bonding; the department only requires that proof of bonding be verified. Eastern’s bond was set at $875,000, a fraction of the amount that Eastern has defaulted on.


Dr. Stout explained that the current bonding requirements by PSA are inadequate, as evidenced by the recent situation regarding Eastern Livestock. He suggested that the bonds of stockyards and dealers in Kentucky are probably all too low.


There was discussion regarding when change of ownership takes place at a sale, which has ownership as cattle go through the stockyards, and how monetary transactions are managed between buyers, sellers, agents, and stockyards. One factor that has made the Eastern Livestock situation complicated is the complex nature of the company. Eastern conducted live sales, contract sales, internet sales, hedge sales, and private farm transactions. This makes accounting for the livestock very difficult.


An overview of farm programs was offered by representatives of Kentucky State University. Dr. Mary Evans Sias, President, began by welcoming the members to the newly-constructed Center for Sustainability of Farms and Family. Dr. Sias gave a brief overview of the KSU Land Grant Program and the different agricultural programs it administers. Dr. James Chapman, Provost, discussed some of the other programs offered by the university, including the creation of a College of Agriculture, Food Science and Sustainable Systems, which will begin in the fall of 2011. Dr. Harold Benson also discussed the Land Grant Program and some of the accomplishments it has achieved. Other KSU representatives that gave program updates were Dr. Kirk Pomper (pawpaws), Dr. Michael Bomford (biofuels), Dr. Jim Tidwell (aquaculture), and Dr. Ken Adries (aquaculture).


Dr. Kimberly Holmes gave a detailed overview of the KSU Land Grant Program and its four divisions: Aquaculture, Community Research, Cooperative Extension, and Educational Outreach.


Mr. Eddie Reed, KSU farm manager, gave a brief description of the new Center for Sustainability of Farms and Family.


There being no further business, the meeting was adjourned.