Senate committee unanimously approves framework to spend $5 million for agricultural economic development

Frankfort — The Kentucky Senate Agriculture Committee voted unanimously to advance Senate Bill 28, a measure that creates a framework for the Department of Agriculture to allocate $5,000,000 that the General Assembly included for agricultural economic development in the 2024 state budget.

The bill, described to the committee by Jonathan Shell, Kentucky commissioner of agriculture, would give the department a formal process and metrics to attract processing and further-processing businesses to Kentucky, with the stated goals of increasing local market opportunities for farmers, supporting rural job creation and raising prices paid to producers.

"First of all, I wanna say thank you so much for last year, putting in the budget, the $5,000,000 for ag economic development that we're working today on putting the framework around and the enabling legislation," Commissioner Jonathan Shell told the committee. He outlined why the department is prioritizing processors and end-users: "In 1996, our cash receipts in the state of Kentucky was $3,100,000,000. Of that 3,100,000,000, poultry was 5% of that. . . . We now have a cash receipts of $8,300,000,000 as of the last report from Doctor Snell. Of that 8.3, poultry is now 25% of the total." Shell added that the state has multiple large poultry facilities that "process 1,300,000 chickens or more a week" and that about "30 percent of the corn that we have goes to our poultry operations in the state of Kentucky." He said the department has created an economic development division to identify gaps in the market, convene partners and offer incentives to land target businesses.

Committee members framed the proposal as a rural economic development tool. Senator Carpenter said rural development motivated his candidacy and praised the bill as a step toward keeping farms and rural communities viable. Several senators described small-scale processing and value-added operations — from green‑bean processing to specialty cheese — as ways to increase profitability for smaller farms and create local jobs.

Members pressed a few policy and implementation details during discussion, including: - How the department will measure return on investment and recoup funds when programs are unsuccessful (Commissioner Shell said the bill includes metrics and recapture provisions). - Whether smaller-scale innovations such as direct-to-consumer raw-milk sales could be supported; Shell said consumer testing and raw-milk safety questions fall more to University of Kentucky programs and the department’s consumer and environmental protection work than to the economic development unit. - Interest in beef processing and feedlot capacity; Shell said expanding feedlot operations and downstream processing is a high priority and that the fund would help attract projects that increase on‑state consumption and processing of Kentucky-grown commodities.

Committee members also noted the department’s coordination with the state Economic Development Cabinet. Shell identified Jacob Estes as the department’s economic development director and said the department coordinates nearly daily with Secretary Nolan and the cabinet to identify and land projects.

Senator Boswell said committee members expect an interim report on how the funds are being used, mentioning an anticipated November 2025 interim report. Shell and committee members said the department will provide updates on program activity.

A motion to adopt the committee subcommittee recommendation was made and approved earlier in the meeting. The final motion to advance Senate Bill 28 out of committee was made by Senator Richardson and seconded; a roll call produced unanimous approval. Chairman Howe called the vote "Passes unanimously." Committee members urged the department to track outcomes and said they expect the funds to target projects that boost local processing, support commodity groups and channel more value and jobs into rural communities.

Commissioner Shell thanked the committee after the vote and said the department will work to justify the committee’s support as projects move forward.