Tobacco Settlement Agreement Fund Oversight Committee




<MeetMDY1> March 16, 2005


The<MeetNo2> Tobacco Settlement Agreement Fund Oversight Committee met on<Day> Wednesday,<MeetMDY2> March 16, 2005, at<MeetTime> 1:00 PM, in<Room> Room 129 of the Capitol Annex. Representative Carolyn Belcher, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Representative Carolyn Belcher, Co-Chair; Senators David E Boswell, and Joey Pendleton; Representatives Adrian K Arnold, Charlie Hoffman, Thomas M McKee, and Tommy Turner.


Guests:† Keith Rogers, Brian Furnish, and Tim Hughes, Governor's Office of Agricultural Policy; Jeff Harper, Kentucky Farm Bureau; Shana Herron, Community Farm Alliance; Dean Wallace, Council for Burley Tobacco.


LRC Staff:† Lowell Atchley, Tanya Monsanto, and Kelly Blevins.

Following roll call and approval of the January 25, 2005 minutes, Co-chair Belcher asked Mr. Keith Rogers and Mr. Brian Furnish, executive director and assistant director respectively of the Governor's Office of Agricultural Policy (GOAP), to report on agricultural diversification project applications that the Agricultural Development Board (ADB) considered at its February meeting.

Mr. Rogers mentioned that several projects were farmersí market ventures approved for funding in the first round of the 2005 Farmersí Market Competitive Grants Program. Six organizations receiving funding included: Anderson County Farmersí Market Association, Bullitt County Conservation District, Carter County Extension District Board, Nelson County Horticulture Advisory Board and Nelson County Fiscal Court, Rockcastle County Farmersí Market, and Russell Neighborhood Development Authority. The board committed $213,057 to the projects.

While explaining the Nelson County project, Mr. Rogers described how the program works. The ADB set aside $1.5 million in 2005 for regional and community farmersí markets across the state. The funds can be invested in regional markets, community markets, and market feasibility studies.† All projects require a 50 percent match from an applicant. During discussion, Mr. Rogers indicated that traditionally smaller farmersí markets had received only county funds.

At one point, Rep. Arnold asked if adjoining counties could join a project after it was funded and operational. Mr. Rogers said they could, but those administering the project would make the decision. In many cases, he said, markets invite producers from adjacent counties to participate.

Committee members asked for clarification on another project, an undertaking by the Marshall County Conservation District. Mr. Rogers indicated the project would involve the removal of debris adjacent to a river to make nearby land more productive and less flood prone.

Next, the committee reviewed projects that did not receive ADB approval for funding. Responding to a question raised by Sen. Boswell during discussion of a project that received a low priority from the county council, Mr. Rogers said that when a council gives a project a low priority, it has to state the reasons why.

A no-funded farmersí market application from the city of Erlanger stimulated committee discussion about the status of the Northern Kentucky farmersí market project, which had been proposed for downtown Newport. Mr. Rogers told the committee that the request was still pending, and meetings have been held on the matter.

Next, the committee reviewed a listing of projects receiving state funds in 2001-2005. Much of the discussion centered on the viability of projects, particularly marketing cooperatives.

Rep. McKee asked Mr. Rogers if they had been able to analyze why some ventures succeeded and some did not. In his response, Mr. Rogers said one could not look at a particular commodity marketing endeavor and predict that it would succeed. In many instances, the success of a project is based on sound management, he said.

Mr. Rogers predicted that this would be a make-or-break year for some marketing cooperatives. He said the GOAP had attempted to close out as many pending projects as possible. He also said they had tried to look at data in terms of the numbers benefiting from particular projects as well as the financial impact.

During the discussion, Mr. Rogers and Mr. Furnish told the committee about an alliance of Kentucky producers and retailers who have been meeting, sharing ideas, and formulating a plan to help producers meet retailersí needs.

At one point, Rep. Arnold said when HB 611 was drafted, legislators knew there would be some risks as farmers diversified. He cited as an example, Ford Motor Co.ís production of the ill-fated Edsel several years ago.

As the meeting ended, staff acknowledged receipt of the annual report of the Kentucky Tobacco Research and Development Center.

The meeting ended at approximately 2 p.m.