Everyone knows the economy is down. But one investment portfolio right here in Kentucky has yielded a 9 percent annual return since 2001, and a few of the investments in that portfolio have returned in excess of 24 percent.
That “portfolio” isn’t the product of some high-end investment firm. It’s the Kentucky Agricultural Development Fund, which invests tobacco settlement money into projects that help Kentucky farmers and businesses add to their income.
In a report released in November, the University of Kentucky said that grants for individual agricultural development projects yielded $1.87 in new income to farmers for every $1 invested. That $1.87 is turning over multiple times in Kentucky’s economy.
Kentucky farmers set a record with $4.7 billion in cash receipts in 2008. The Kentucky Agricultural Development Fund helped make that possible.
The fund uses half of Kentucky’s master tobacco settlement money to share the costs of projects to improve agricultural operations and find new markets for Kentucky Proud farm products. No tax dollars are used in these investments.
More than $279 million has been invested in Kentucky agriculture since the fund was created in 2001. These investments are helping farmers, while at the same time creating jobs and generating economic activity.
Broadbent B&B Foods opened a new pork processing plant and retail store in Lyon County last spring. Ronny and Beth Drennan’s business employs 12 full-time and another dozen seasonal workers. The retail store offers Kentucky Proud products from about 40 other producers. The Agricultural Development Fund helped pay for the new facility and made it possible for the Drennans to secure the rest of the financing they needed.
A greenhouse and a multi-purpose facility in Cumberland County were built in part with cost share funds from the Agricultural Development Fund. The greenhouse at Cumberland County High School teaches students not only how to raise plants, but also how to run a business and work with customers. The multi-purpose facility gives local producers and crafts people an indoor, climate-controlled venue from which to sell their products.
Trunnell’s Farm Market in Daviess County was financed with help from the Agricultural Development Fund. A forgivable loan provides incentive for Trunnell’s to stock products from Kentucky Proud producers.
Agricultural development funds made it possible for Madison County farmer Eddie Warren to improve and expand his beef cattle operation to make up for lost income due to a sharp decline in tobacco production. Agricultural development funds made it possible for dairy farmer Don Kinslow of Barren County to renovate his milking parlor and build a free-stall barn that enables him to run his 500-cow operation more efficiently.
I could tell you dozens of other stories just like these.
The economic impact of these investments goes far beyond that return on investment in the UK report. These farmers and business people will spend their new income in their local communities for groceries, clothes for their children and other necessities of life. Their employees will do the same. Kentucky Proud vendors who ring up new sales through retailers such as Broadbent and Trunnell’s will spend those dollars in their respective communities. So will their employees. They all will pay taxes to their local governments for law enforcement, fire protection, schools, libraries and other vital services.
No other state is doing what Kentucky is doing with its tobacco settlement money. Some other states used part or all of their funds to plug holes in their budgets. That money is gone, never to be seen again. The investments Kentucky has made in its agriculture industry will continue to pay dividends for years to come.
The Kentucky Agricultural Development Fund has succeeded in generating new farm income. It has succeeded with no tax dollars. And it has enabled some 50,000 Kentuckians throughout the Commonwealth to improve their standard of living. I urge you to contact your legislators and tell them to continue these wise, successful investments in Kentucky’s future.