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Governor’s Office of Agricultural Policy

Governor’s Office of Agricultural Policy. USDA Technical Committee February 14, 2013. Overview. Governor’s Office of Agricultural Policy (GOAP) GOAP Programs Pressures on the Agricultural Development Fund. GOAP.

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Governor’s Office of Agricultural Policy

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  1. Governor’s Office of Agricultural Policy USDA Technical Committee February 14, 2013

  2. Overview • Governor’s Office of Agricultural Policy (GOAP) • GOAP Programs • Pressures on the Agricultural Development Fund

  3. 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

  4. 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

  5. Area Contacts

  6. GOAP • Primary Ag Finance Corporation Contacts • Director of Financial Services: Bill McCloskey • Loan Programs Manager: Cyndi Hall

  7. 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)

  8. KAFC Programs Kentucky Agricultural Finance Corporation (KAFC) Purpose:to provide low-interest access to capital for agricultural diversification and infrastructure projects 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

  9. KAFC Programs Building the future of Kentucky agriculture. Tim Turney, Woodford Co. • 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

  10. KAFC Programs Caleb Ragland, LaRue Co. • 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 Helping beginning farmers achieve their dreams.

  11. 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

  12. 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

  13. KADF Investments On-Farm Energy Efficiency & Production Program Purpose:to provide incentives to increase energy efficiency or renewable energy production on Kentucky farms Award Type:grant Guidelines:50% of project, up to $15,000 Complete an “On-Farm Energy Application” For energy efficiency upgrades and renewable energy production Third-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/.

  14. KADF Investments 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.

  15. KADF Investments Project Applications Agritourism More than $2.5 million in state and local investments Kentucky ProudMore than $13 million invested

  16. KADF Programs Project Applications Leadership Development More than $5.4 million invested Farmers’ Market Development More than $2.4 million invested 4-H: $2.2 million FFA: $2.2 million Kentucky Center for Agriculture & Rural DevelopmentMore than $2.6 million for technical assistance, since 2001 Ky. Agriculture Leadership Program: $1 million

  17. KADF Programs Project Applications Beef Cattle Nearly $60 million state and county invested Kentucky Wine/Grape Industry More than $2.4 million invested in state & local projects Kentucky Wool Society patented felting machine development

  18. KADF Investments Farmers’ Market Competitive Grant Program 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 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

  19. KADF Investments Deceased Farm Animal Removal Program (DAR) Purpose:to serve as a measure that facilitates the coordination of environmentally sound and cost effective disposal of deceased livestock for Kentucky producers 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.

  20. KADF Investments Shared-use Equipment Program 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 administrator Complete a “Shared-Use Equipment Application” 50/50 match or 75/25 match (KADF/Applicant) Rental fees for maintenance, repair and future replacement Equipment must be maintained for five (5) years Eligible equipment included in guidelines Semi-annual reporting required *Complete guidelines and program application are available at http://agpolicy.ky.gov/funds/shared_use.shtml.

  21. KADF Programs County Agricultural Investment Program (CAIP) Purpose:to provide farmers with incentives to allow them to improve and diversify their current production practices. 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 from County Council sets primary, secondary areas Maximum cost-share $5,000 Producer universal application, producer report Semi-annual reporting required by administrator *Complete guidelines and program application are available at http://agpolicy.ky.gov/funds/caip.shtml.

  22. 2013 Program Changes CAIP – within Forage & Grain Improvement 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.

  23. 2013 Program Changes CAIP – 2013 Producer Application • Additional Information added to Introduction • KY Agriculture Water Quality Act

  24. Ky. Agricultural Development Fund More than 4,500 projects Totaling more than $400,000,000 Invested in state, regional and county projects across the Commonwealth *Total as of Jan. 18, 2013

  25. 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

  26. Tobacco Master Settlement Agreement (MSA) States vary greatly in the allocation of MSA revenue • Securitization • Economic Development • Health initiatives • General Fund Budget Shortfalls

  27. Kentucky’s MSA Distribution

  28. Kentucky’s MSA Distribution

  29. 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

  30. Kentucky’s MSA Debt Service

  31. Kentucky’s MSA Debt Service • UK Diagnostic Center • 2008 • Breathitt Vet Center • 2008 • Water and Sewer • 2000, 2004, 2008 • 4-H Camp Renovations • 2008 $28.4 Million each year to support $379,000,000 in Bonds • Farmland Preservation • 2000 • FFA Leadership Center Renovations • 2008 • Debt Service

  32. Agricultural Development Fund Appropriations(FY 2001-2014)

  33. Fiscal Year 2013 Total: $94.1 Million

  34. Fiscal Year 2014

  35. 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?

  36. Governor’s Office of Agricultural Policy Roger ThomasExecutive Director 404 Ann StreetFrankfort, KY 40601(502) 564-4627agpolicy.ky.govgovkyapolicy@ky.gov Visit our Flickr site for recent event photos: www.flickr.com/photos/agpolicy.

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