June 2005

By Donna Carman, Editor, Casey County News

At her peak, Teresa Luttrell grew 80 acres of tobacco. Two years ago, when that base was down to about half, Luttrell knew that she’d better be finding another way to supplement her income. That’s when she learned of the newest model program available through the Casey County Agriculture Development Council -- diversification.

“I applied when the funds became available,” Luttrell said. “I knew that tobacco was going out and I needed something.” That ‘something’ is Ridgetop Greenhouses, now in its second season across from Luttrell’s home on Thomas Ridge Spur Road. And although it’s been hard work, Luttrell has not regretted a minute of it. “I had wanted to start a greenhouse for a while,” she said.

Luttrell said she went to the Casey County Extension Office where then-agriculture agent Tommy Yankey helped her research the project. She also contacted James Young, who is the administrator for the Casey County Cattlemen’s Association, the agency that administers the genetics, cattle handling facilities, and diversification programs for the county.

Unlike genetics and cattle handling facilities -- where participants sign up on a list at the extension office on a first-come, first-served basis -- those wishing to participate in the diversification program must complete a lengthy application and answer numerous questions.

“I had to explain how this was going to help me and my family, benefit the community, employ other people . . . there was a lot of paperwork to do,” Luttrell said. But in the end, it was worth it, Luttrell said. She received the maximum allowed, $5,000, which helped establish her business.

Under the terms of the contract, she was required to operate the greenhouse for two years. That agreement was fulfilled this year, but Luttrell has no intentions of getting out. “Nobody realizes how much you invest,” she said, adding that it took about $75,000 to get it operational.

While the greenhouse is not the money-maker tobacco was -- at least not yet -- Luttrell sees its potential. Meanwhile, she’s still growing 26 acres of tobacco, which is contracted to Philip Morris. “That’s a gamble, actually. There’s no guarantee what you’re going to get,” she said.

Luttrell is one of 21 local recipients of diversification funds, which became available in late 2003. When participants complete the requirements, which are inspected by Young, they become eligible for half of what they have spent, up to $10,000.

Luttrell said her greenhouses did not have any flowers in them, but other than that, were ready for business when both Young and John Gossage, president of the Cattlemen’s Association, came and inspected her project. “He was very professional about it,” Luttrell said of Young.

Of the 21 who have completed the program, 16 received the maximum, according to Young. The average payout to diversification participants has been $4,717. To date, $99,058.83 has been paid out.

Those participating in cattle handling facilities have been paid $460,795.57. The 150 participants received an average payment of $3,072, with $5,000 as its maximum. That program still has a waiting list of approximately 150, according to Young.

At its June 28 meeting, the council appropriated $125,000 for this program of the $317,000 it was allocated in April. The open-end enrollment was also assigned a cut-off date of July 31.

In the genetics program, which ended a funding cycle on July 6, 224 participants have shared in $193,771.47. Genetics has a maximum allowance of $1,250, with an average payment totaling $861.

Money allocated in the genetics program was used to help buy a bull or semen, Young said. That program has now been discontinued in favor of providing additional funds for cattle handling facilities.

According to records kept by Young, five participants have benefited from all three programs administered by the Cattlemen’s Association, while 75 have received funding in two of the three programs. To date, the three programs have served 315 people. Nearly from the time a list was formed in 2001, the cattle handling facilities program has had a waiting list. Some have been on the list for more than two years, Young said.

“We had more applicants than we had money, so we had to go into a waiting list mode. It’s been that way since October 2001,” he said.

However, participants in the genetics program -- which also began in 2001 -- have fared better. Young said a waiting list formed only last year, but has now been cleared. “We have money for all of it now,” he said, noting that genetics has been cut off for new applicants.

Diversification was adopted as soon as it became available in the county in the fall of 2003. The program’s first recipient was funded that year, but the majority received money last year.

“This is advertised in cycles. It is not first-come, first-served, so there are not as many applicants for this program as they have to submit a proposal . . . a business plan,” he said.

Criticism

In the five years that he’s been involved in administering funds, Young said he’s heard many criticisms.

“One of the criticisms I’ve heard is that people are getting too much money,” he said, noting that the council could have set a lower cap on the maximum awarded in each program. “But the way I see it, it’s better to wait and get more where you can do more, than to get less right away.”

Other criticisms have included both husbands and wives receiving money, as well as a couple of teenagers, and those who have more than one farm. ”We have had some who may be operating on the farm of their parents or another relative, and we’ve had people with multiple farms too,” Young said.

He said an example is a husband who applies under the genetics program on one farm while his wife applies on another. And he said there was a case where a 15-year-old boy was awarded money for genetics too. “He has his own cattle. There’s nothing wrong with that,” he said.

Young said the administrators first considered not allowing husbands and wives to both apply for funds, but officials at the Governor’s Office of Agriculture Policy said it was allowed. He said the GOAP allows a husband and wife to apply, but only for separate farms, and using separate Social Security numbers.

When the Cattlemen’s Association first became an administrator, Young said there was a three-person committee for both the genetics program and cattle handling facilities program. Young served on the latter.

“We went by committee for two to two and a half years, but it was wearing us out. It served no real purpose,” he said. Since most of those who served on the committees also held full-time jobs, Young said it was hard to find a convenient time to meet and approve applicants. The committees then decided that two out of the three could make the recommendation. That, too, soon wore thin.

“We discussed it and decided to move away from that, deciding that either I or John Gossage would review the farmers’ payments. When approved, Brent Ware [the association’s treasurer] writes the checks,” Young said.

Young said he makes quarterly reports to the GOAP, showing expenditures in each of the three programs.

Potential for fraud

As far as compliance by the participants, Young said the state asks administrators to conduct spot checks.
“ I do not physically go out and count every fence post, but I have been to every diversification program,” he said. “And on cattle handling, I have seen about 12 to 15 of these.” [The program has given money to 150 people.]

Young said he mainly takes participants at their word, as they have to have provided proof of their expenditures for qualifying items before they are approved for payment in a cost-share program.

“We have had people who didn’t meet the criteria, but to say they were trying to commit fraud, I can’t say that,” he said. “I have been suspicious of things, but I have never approved anything like that.”
Young admits there is the potential for fraud in the program, but no more so than in any other government-subsidized program. “We have fraud in Medicaid, don’t we?” he asked.

By law, the Cattlemen’s Association is allowed to take a 5 percent fee for administering each of the three programs. Young said the association has not taken the fee.

He has, however, received $750 from the Cattlemen’s Association itself for expenses he has incurred, such as telephone bills, postage and envelopes. He noted both Gossage and Ware have received $250 each for expenses as well.

“A lot of people in this county donate their time for various things. This is mine,” he said.