Securing working capital is often one of the largest hurdles agricultural programs must jump in order to achieve success. The Governor’s Office of Agricultural Policy, which was established in 1998 to provide a link between the governor’s office and the ag industry, awards grants, low- interest loans, and other financial incentives through the Kentucky Agricultural Development Fund to help the industry evolve and grow.
The Power of Branding
In 2000, the Kentucky General Assembly established the Kentucky Agricultural Development Board to manage the fund and invest in programs and agribusiness ventures that positively impact farmers and rural communities and stimulate the agricultural economy.
One such program is Kentucky Proud, the state’s official marketing program for agricultural products. The Kentucky Proud program offers members a host of advantages, including domestic and international marketing services, a financial incentive program for restaurants that buy Kentucky products, a free meat- grading service, and cost sharing
to enable members to showcase their products at trade shows.
“Kentucky Proud has been one of the most successful projects in helping local farmers market their products,” says Warren Beeler, executive director of the Governor’s Office of Agricultural Policy. “Producer cost-share grants for promotional items have opened doors for producers to sell local, and the Restaurant Rewards program has served as an incentive for restaurants to buy Kentucky products. In return, the public gets to experience farm-fresh products. Ultimately, Kentucky Proud has helped small farmers be able to stay on the farm and make a living. The benefit is being part of a brand that is recognized statewide for local agricultural products. Kentucky Proud is working.”
Strength in Numbers
Steve Smith, owner and president of Fishmarket Seafood wholesaler in Louisville, helped negotiate a distribution partnership between Kentucky Proud and the Kroger retail food chain.
“We’ve done business with Kroger for 30 years, and because of that relationship, they approached us to help them put together a local program,” Smith says. “With the Department of Agriculture and Kentucky Proud program, we put together a food show for Kroger and all of their managers. Everybody worked together to make this happen, and there’s no way that this could have happened without everybody working tremendously hard toward the same goal, which was to get local product out there for the consumer.”
Smith says the initial distribution deal with Kroger was the single largest purchase of Kentucky Proud products to date, with more than 150 local products stocking store shelves.
“That in itself should speak volumes about how much of a change this created for a lot of these producers,” Smith says. “While some people were selling 10 or 15 cases per order, we’re now coming to them with an order for 100 or 150 cases. This has been a very successful program from everybody’s point of view.”
In addition to Kentucky Proud, the Kentucky Agricultural Development Board has funded a number of highly successful programs since its inception.
The Kentucky Beef Network, for example, offers education programs such as Master Cattleman, Master Grazer, and Master Marketer, as well as field staff statewide to support farmers. The Kentucky Dairy Development Council’s MILK program uses KADF money matched with processor funds. The program has drastically improved the quality and production of milk in Kentucky.
“There are hundreds of successful projects funded by KADF. The ethanol plant in Hopkinsville may be one of the biggest successes, as nearly 4,000 farmers sell grain to this facility and share in the plant profit which returned 78 cents a bushel last year,” Beeler says. “The list goes on and on of the great projects completed with county funds. Projects like building hay barns, buying genetics, GPS equipment, and youth livestock facilities are only possible because of the KADF.”
Wayne Hunt, president of H&R Agri-Power and member of the Kentucky Agricultural Development Board, says a KADF success story often overlooked is the Kentucky Agricultural Finance Corporation.
“We can finance beginning young farmers. They can borrow money to pay down on a piece of property,” Hunt says. “We can help some young people get started in agriculture. That’s a big deal for us.”