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Ag development board highlights loans, horticulture grants and a Keeneland sustainability loan
Summary
The Tobacco Settlement Fund oversight committee heard that Ag Development and the Kentucky Agriculture Finance Corporation approved dozens of participation loans and highlighted three projects — a $2 million horticulture technical assistance award, a $1 million participation loan for a Keeneland gasification system and county‑matched aid for a Letcher County farm. Members asked about tax treatment, denials and compliance.
Brandon Reed, executive director of the Kentucky Office of Ag Policy, told the Tobacco Settlement Agreement Fund Oversight Committee that November was busy for ag development programs and loan activity and that staff had processed investments and board work ahead of the winter legislative session.
"We are 16 strong," Reed said, summarizing staff capacity and the agencies’ outreach. Bill McCloskey of the Kentucky Agriculture Finance Corporation told members the corporation approved 17 participation loans last month totaling more than $3,400,000 and described the board’s revolving‑loan program as having grown to about $145,000,000 with only four loans written off since 2004.
Committee members asked detailed questions about three projects the agencies highlighted. McCloskey described a two‑year, $2,000,000 allotment to the Kentucky Horticulture Council to provide technical assistance to farmers shifting from tobacco into horticulture — small fruits and ornamentals — as part of the agencies’ long‑running Master Settlement Agreement mission to transition agricultural economies.
McCloskey also outlined a Keeneland Sustainability project: a $9,200,000 plan to install a gasification system that converts biomass into a pelleted biochar soil amendment. "The board approved a $1,000,000 participation loan," McCloskey said, adding that Keeneland had committed private funds and that the loan would be serviced at roughly 2 percent plus a small servicing charge. Presenters said USDA Natural Resources Conservation Service incentives could help local producers acquire the product once it is available.
Senator Webb asked why Keeneland needed board participation. McCloskey and Reed said the board chose a loan rather than a grant to ensure repayment and to broaden benefits to farmers across Kentucky while preserving the fund’s corpus.
The third highlighted project, Jingleheim Ranch and Gardens LLC of Letcher County, was presented as a for‑profit operation seeking county funds with a state match. McCloskey said the applicant had secured approximately $20,000 in county funds and would be eligible for a matching $20,000 state contribution; packet numbers show a project total near $179,000 with the producer’s contribution listed at $89,000.
Members probed other practical details: Senator Boswell asked whether large poultry houses receive agricultural property‑tax exemptions. Presenters said projects receiving agriculture classification are eligible for the ag property classification and that loan and grant agreements include compliance checks and liens on financed equipment — for example, vehicles financed through the program generally carry a five‑year ownership requirement with prorated payback if sold earlier.
The committee recorded a motion and approved the November minutes at the start of the meeting. No denials were reported for the month under review; presenters said denials occur periodically depending on project review outcomes.
The committee invited members to attend the agencies’ board meeting the following day, and Chairman Dawson closed the ag portion of the session before the committee heard cancer‑center presentations.
