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Governor’s Office of Agricultural Policy
USDA Technical CommitteeFebruary 14, 2013
Overview
• Governor’s Office of Agricultural Policy (GOAP)
• GOAP Programs
• Pressures on the Agricultural Development Fund
GOAP
Advise the Governor on agriculture-related issues at the state and federal level
Develop programs to assist in the growth of the agricultural economy
Administer grant and loan programs
GOAP
Primary Ag Development Fund Contacts
Program Coordinator: Tammy Brookshier
Project Manager: Biff Baker
Energy Program Coordinator: Angie Justice
Area Contacts: Bill McCloskey, Angela Blank, Sandra Gardner, Bryan Thomas, Joel Neaveill
Area Contacts
GOAP
Primary Ag Finance Corporation Contacts
Director of Financial Services: Bill McCloskey
Loan Programs Manager: Cyndi Hall
GOAP Investment Opportunities
Kentucky Agricultural Finance Corporation low-interest loans
On-Farm Energy Incentives
KADF project grants, loans
Farmers’ Market Competitive Program
Deceased Farm Animal Removal Program (DAR)
Shared-use Equipment program
County Agricultural Investment Program (CAIP)
Award Type: loan (participation, direct)
Programs: Agricultural Infrastructure (AILP)Beginning Farmer (BFLP)Diversification through Entrepreneurship in
Agribusiness (DEAL) Large/Food Animal Veterinarian (VET)New Agricultural Enterprise (NEW) - pending
Agricultural Processing Coordinated Value-added
*Complete guidelines and loan applications are available at http://kafc.ky.gov/kafc_programs.shtml
KAFC Programs
Purpose: to provide low-interest access to capital for agricultural diversification and infrastructure projects
Kentucky Agricultural Finance Corporation (KAFC)
Building the future of Kentucky agriculture. Tim Turney,
Woodford Co.
KAFC Programs
Agricultural Infrastructure Loans (AILP) 2% interest, requires bank participation
$100,000 / $150,000 max. award, based on tobacco dependency
Variety of commodity facilities, equipment storage, fencing, etc.
Up to 15-year term
20% of gross income must come from farming
KAFC Programs
Helping beginning farmers achieve their dreams.
Beginning Farmer Loans (BFLP) 2% interest, requires bank participation
$250,000 maximum award / no more than 50% of project*
Livestock, equipment, agricultural facilities, working capital, real estate, farm business buy-in
Three-year business plan required
Mentor*Additionally, not to exceed 50% of the outstanding debt held by the participating
lender for the applicant at loan closing
Caleb Ragland, LaRue Co.
KAFC Programs
Diversification through Entrepreneurship in Agribusiness Loans (DEAL)
to assist entry level agri-entrepreneurs with the establishment or purchase into a business that provides agricultural products or services to other producers
2% interest, requires bank participation
$100,000 maximum award / up to 50% of project*
Start up ventures may require feasibility study
Three-year business plan required
Mentor
Refinancing of existing debt ineligible
*Additionally, not to exceed 50% of the outstanding debt held by the participating lender for the applicant at loan closing
KAFC Programs
New Agriculture Enterprise Loans (NEW) - pending
to provide loans for Kentucky farming operations as they enter into a new enterprise to supply market opportunity created by an Agribusiness expansion
2% interest, requires bank participation
$250,000 maximum award / up to 50% of project*
20% of gross income must come from farming
Submit documentation from expanding business showing the plans for growth & the need for Kentucky product
Refinancing of existing debt ineligible
On-Farm Energy Efficiency & Production Program
KADF Investments
Purpose: to provide incentives to increase energy efficiency or renewable energy production on Kentucky farms
Award Type: grant
Guidelines: 50% of project, up to $15,000Complete an “On-Farm Energy Application”For energy efficiency upgrades and renewable energy productionThird-party energy audit or assessment requiredEligible investments included in guidelines Quarterly deadlines (next deadline: April 26)
Contact: Angie Justice, (502) 782-1765 Bill McCloskey, (502) 782-1766
*Complete guidelines and program application are available at http://ag-energy.ky.gov/.
Project Applications
Purpose: to provide access to state and county funds for statewide, regional and county projects that fit outside the established programs.
Award Types: grants, loans
Guidelines: Complete a Project Application
County fund requests - must be prioritized by all counties from where funds have been requested
Requests for state funds are encouraged to seek county contributions
Reporting, as outlined in legal agreement *Complete guidelines and project application are available at
http://agpolicy.ky.gov/application.
KADF Investments
Project Applications
Kentucky ProudMore than $13 million invested
AgritourismMore than $2.5 million in state and local investments
KADF Investments
KADF Programs
Project Applications
4-H: $2.2 million FFA: $2.2 million
Ky. Agriculture Leadership
Program: $1 million
Leadership DevelopmentMore than $5.4 million invested
Farmers’ Market DevelopmentMore than $2.4 million invested
Kentucky Center for Agriculture & Rural DevelopmentMore than $2.6 million for technical assistance, since 2001
KADF Programs
Kentucky Wool Societypatented felting machine development
Project Applications
Beef CattleNearly $60 million state and county invested
Kentucky Wine/Grape IndustryMore than $2.4 million invested in state & local projects
KADF Investments
Award Type: grant Guidelines: Complete a “2013
Farmers’ Market Competitive Grant Program” form Deadlines – in hand by May 31 & Oct. 25
Competitive – all applications will be scored
KADF (state & county) cannot be more than 50% of the project
Approved projects must be completed & documentation for reimbursement submitted by Dec. 15, 2014
*Complete guidelines and program application is available at http://agpolicy.ky.gov/funds/award_programs_farmersmarkets.shtml
Purpose: to provide an opportunity for local farmers’ markets to access state ADF for the construction of permanent facilities for their markets or the expansion of existing markets, as well as market resources
Farmers’ Market Competitive Grant Program
KADF Investments
Award Type: grant
Guidelines: Complete a “DAR Guidelines & Application” form Local government agency or the like, serves as
administrator Only one request per county considered Maximum award - $7,500 Producer contribution encouraged Regional programs of two or more counties
encouraged
*Complete guidelines and program application are available at http://agpolicy.ky.gov/funds/removal.shtml.
Purpose: to serve as a measure that facilitates the coordination of environmentally sound and cost effective disposal of deceased livestock for Kentucky producers
Deceased Farm Animal Removal Program (DAR)
KADF Investments
Purpose: to impact a high number of producers who cannot justify ownership expenses associated with certain equipment by helping them access technology necessary to improve their operations economically. Award Type: grant
Guidelines: Local agency or organization serves as administratorComplete a “Shared-Use Equipment Application”50/50 match or 75/25 match (KADF/Applicant)Rental fees for maintenance, repair and future
replacementEquipment must be maintained for five (5) yearsEligible equipment included in guidelines Semi-annual reporting required
*Complete guidelines and program application are available at
http://agpolicy.ky.gov/funds/shared_use.shtml.
Shared-use Equipment Program
Award Type: cost-share Guidelines: Complete a 2013 CAIP Application
Local agency or organization serves as administrator
50/50 match or 75/25 match (CAIP funds/Producer) 10 Investment Areas to choose fromCounty Council sets primary, secondary areasMaximum cost-share $5,000 Producer universal application, producer reportSemi-annual reporting required by administrator
*Complete guidelines and program application are available at http://agpolicy.ky.gov/funds/caip.shtml.
KADF Programs
Purpose: to provide farmers with incentives to allow them to improve and diversify their current production practices.
County Agricultural Investment Program (CAIP)
2013 Program Changes
Added the following eligible cost-share items:
A. Forage, Pasture and Grain Improvement
7. Rental of land clearing equipment or custom land clearing services.Note: Participants intending to use this cost-share item who also participate in USDA programs should contact FSA to ensure compliance with Highly Erodible Land and Wetland Conservation Compliance, which is required for USDA program compliance.
CAIP – within Forage & Grain Improvement
2013 Program Changes
• Additional Information added to Introduction
• KY Agriculture Water Quality Act
CAIP – 2013 Producer Application
$400,000,000
Ky. Agricultural Development Fund
*Total as of Jan. 18, 2013
Invested in state, regional and county projects across
the Commonwealth
Totaling more than
More than 4,500 projects
Tobacco Master Settlement Agreement (MSA)
1998 agreement between 46 states Attorneys General that compensated states for the costs associated with the treatment of smoking-related illnesses
Written for the first 25 years, but agreement is in perpetuity
States were left to decided how they wanted to allocate this new source of revenue
Tobacco Master Settlement Agreement (MSA)
States vary greatly in the allocation of MSA revenue
Securitization Economic Development Health initiatives General Fund Budget Shortfalls
Kentucky’s MSA Distribution
MSA Revenue
Ky Ag Development Fund
State FundDirect
Appropriations
County Fund
118 County accounts
Early Childhood
Fund
Healthcare Fund
Kentucky’s MSA Distribution
State Fund
Remaining for Regional & State
Project Investment
Special
Projects
Debt Servic
e
Cost shar
e
What is Debt Service?
Bonds issued backed by full faith
and credit of the Commonwealth
Cash now for projects in
exchange for repayment of debt
over time
Debt Service - Cash needed to pay interest and
principal on a loan / debt
Kentucky’s MSA Debt Service
Debt Service
Farmland Preservation
2000
Water and Sewer
2000, 2004, 2008
UK Diagnostic
Center2008
Breathitt Vet Center
20084-H Camp
Renovations2008FFA Leadership
Center Renovations
2008
Kentucky’s MSA Debt Service
Debt Servic
e
Farmland Preservation
2000
Water and Sewer
2000, 2004, 2008
UK Diagnostic
Center2008
Breathitt Vet Center2008
4-H Camp Renovations
2008
FFA Leadership
Center Renovations
2008
$28.4 Million each year to
support $379,000,000 in
Bonds
Agricultural Development Fund Appropriations(FY 2001-2014)
FY 2
001
FY 2
002
FY 2
003
FY 2
004
FY20
05
FY20
06
FY20
07
FY20
08
FY20
09
FY20
10
FY20
11
FY20
12
FY20
13
FY20
14 -
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
County Allocations ConservationState Projects & Admin Debt Service
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 $-
$20
$40
$60
$80
$100
$120
$140
MSA Actual and Estimated Payments(in Millions)
Actual Payments Estimated Payments
Fiscal Year 2013
$28,320,300
$2,622,000
$3,000,000
$14,278,000
$22,963,400
$22,963,300
Debt Service KADB State projects & administrationConservation State Cost Share County Ag Development FundsHealthcare Initiatives Early Childhood Development Initiatives
Total: $94.1 Million
$295,700
$2,500,000
Debt Service KADB State projects & administrationConservation State Cost Share County Ag Development FundsHealthcare Initiatives Early Childhood Development Initiatives
Total: $92.8 Million
Fiscal Year 2014
Pressures on the Ag Development Fund
What will be the impact on Kentucky’s farm families of reduced support from the federal government?
Are farmers aware that Tobacco buyout payments end in 2014?
Will the recession slow and GF revenue increase enough to maintain services and obligations?
Will the tobacco companies continue to challenge MSA payments?
Will the political support for programs continue?
404 Ann StreetFrankfort, KY 40601
(502) 564-4627agpolicy.ky.gov
Governor’s Office of Agricultural Policy
Roger ThomasExecutive Director
Visit our Flickr site for recent event photos: www.flickr.com/photos/agpolicy.
