Kentucky weekly examines local groups' spending of tobacco-settlement funds

This story, published in the Casey County News on June 23, 2005, was the first of a five-part series on the county Agriculture Development Council's programs and problems. It was written at a time when farmers were planting their first crop without a federal tobacco program in 67 years. The succeeding stories on individual programs were accompanied by lists of farmers receiving money.

By Donna Carman, Editor

The tractor chugs along, up and down the rows, the driver keeping it straight as the two men sitting on
the back feed tobacco plants into the setter. It's a familiar scene in Casey County in late spring --
but not as widespread as it once was.

However, on this day, three generations -- R.C. Weddle Jr., his son, Chris, and Chris's son, Joshua -- are
setting what will be two acres of the burley crop on Walnut Hill Road. It's a far cry from what the family has grown in the past, but it's still something.

”I wasn't going to grow any this year . . . thought I’d quit,” Chris Weddle said. “But I just can’t.”

While Weddle is only one of hundreds of Casey County farmers affected by the declining tobacco crop in
recent years, he is also one of many to take advantage of programs being offered to help farmers diversify away from tobacco.

House Bill 611, passed by the Kentucky General Assembly in 2000, allocated money from the Phase I tobacco settlement. Half of this money, which comes from a settlement with the country's major manufacturers of tobacco products, is used for agricultural development, including diversification to help farmers affected by the loss of their tobacco income.

The bill calls for the creation of eight-member councils within each county, whose members place high or low priorities on programs presented to them. In turn, their recommendations go to the Kentucky
Agricultural Development Board, which allocates the funds for each model program. Two members of the council are selected by the Farm Service Agency, two by the Extension District and two by the Soil Conservation Service. In turn, those six select two others to represent young farmers, who must
be under age 40.

The county currently has five programs. The Casey County Conservation District administers a forages
program; the Central Kentucky Meat Goat Association handles funding for goats; and the Casey County
Cattlemen¹s Association administers three programs -- genetics, cattle handling facilities, and agricultural diversification.

Weddle has benefited from both the cattle handling facilities and genetics programs. The $850 he received
in 2002 paid for half of the cost to buy a bull, and the $3,186.24 awarded to him in 2003 represented 50
percent of the cost involved in doing some fencing.

”Anytime you can get 50 percent of something paid for, it’s a pretty good deal,” Weddle said, adding that he had been putting off the needed fencing until he learned of the program.

Like others, Weddle put his name on a list at the Casey County Extension Office, indicating his
willingness to participate in the model programs. He doesn¹t remember how long he was on the list, but he
said when he met the requirements, he didn¹t have to wait long until he had received his money.

To receive the cost-share money, farmers must complete the requirements of each program first -- including paying for everything up front -- and then they are reimbursed half of what they have spent, providing proof of their expenses. However, each program has a limit. In the case of genetics, the limit is $1,250. For cattle handling facilities, which includes fencing, it is $5,000.

Weddle did not spend up to the maximum in either program. ”I wish I’d done more now,” he said.
But since Weddle has already been allocated money in those programs, he is not eligible to apply for more.
He can, however, still apply in other programs, as he is about $11,000 away from his lifetime maximum

New guidelines

According to Keith Rogers, executive director of the Governor’s Office of Agricultural Policy, new
guidelines were established in February 2004 that limit the amount one producer can receive to $15,000.
While there are instances of participants exceeding that amount, Rogers said if it occurred prior to 2004,
it is not a violation.

Rogers acknowledged that there have been several complaints and allegations regarding funding. Chief
among those are concerns addressed by Marion Murphy, former chairman of the local agriculture development council, who resigned on May 15. Murphy’s concerns deal mainly with the programs overseen by the Cattlemen’s Association and its administrator, James Young.

Murphy presented a written list of concerns to the council in January, which were also forwarded to
Rogers. The state issued a written response (see related sidebar).

Additional state guidelines were updated, which Rogers said were, in part, prompted by Murphy’s concerns. “We did look into a lot of the allegations (Murphy) brought forth,” Rogers said. “Under today¹s rules, there would be discrepancies. However, the timing of those took place before guidelines were put in place to address them.”

One of those complaints involved Frank McAninch, who preceded Murphy as chairman of the local council. According to records maintained by each of the program administrators, McAninch has received $19,518.88, which exceeds the now defined $15,000 lifetime limit. Under programs administered by the Cattlemen’s Association, McAninch received $1,000 for genetics in 2001, $5,000 for facilities in 2002, and $5,000 for diversification. The latter check was written on Feb. 2, 2004, just days before the new limit went into effect. Records also show that McAninch was allocated $5,000 for forages in 2002, and $3,518.88 in the goat program during 2004.

While Murphy did acknowledge that McAninch had not broken any rules, he still doesn’t agree with the fact that he has been awarded money in every program while others are still waiting. “The fact that the previous chairman collected from four different programs and drew the largest amount of any farmer, while others were waiting, may or may not be legal, but it sure is unfair,” Murphy said in March. Attempts to contact McAninch were unsuccessful.

New chairman to be elected

Since his resignation as chairman, Murphy has declined to comment on the agriculture development council
problems. However, Rogers said he met with Murphy on May 13 to talk more about the issues.
“He was not satisfied and indicated to me he was going to resign as chairman,” Rogers said.

Murphy did tender his resignation two days later to the Casey County Farm Service Agency, which is the
group that placed Murphy on the council. Since then, the FSA Committee has met and nominated Junior True as Murphy’s replacement. The entire council is scheduled to meet June 28 to elect a new chairman.

One of Murphy’s main complaints has been that one person, Young, has been in charge of approving
applications. The two have frequently butted heads in public meetings.

However, Rogers said having one person administering a program is an accepted practice throughout the state. “It is common for one person to be the administrator,” he said. “That person generally works for an
organization (such as the Cattlemen¹s Association).” In the forages program, Pat Williams, an employee of
the Soil Conservation District, administers requests, while Joyce Cardenis, a Marion County resident
involved with the Central Kentucky Meat Goat Association, is the administrator.

For a more detailed story about Murphy's complaints and resulting state action, click here.

Goat industry climbs as tobacco falls

By Brittany Johnson
Summer Intern

Wade and Patsy Durham have named each and every one of their goats . . . all 62 of them.

Originally purchasing goats to keep their 30-acre property neat, the Durhams say raising meat goats has become their hobby as well as a way to help them make up for lost income from tobacco crops.

The two have just finished adding on to their barn to create a better environment for their goats. They did this with the help of funding from the model program administered by the Central Kentucky Meat Goat Association from Phase I of tobacco settlement money.

To renovate their facilities, the Durhams received $662.91. "It made it a lot easier," said Wade Durham.

The Durhams are no strangers to the tobacco settlement. They sold the tobacco base that they used to lease out because of last year's tobacco buyout.

Originally intended to help tobacco farmers diversify into other areas of agriculture, Phase I funding is now helping many more people break into the goat business.

"The goat market is growing fast (in Casey County). It (Phase I funding) has grown into helping people who want to get into this business," said Joyce Cardenas, administrator of the Casey County model program for goats. According to Cardenas, Kentucky has moved from close to the bottom of the list, to the third-highest meat goat-producing state. Texas is number one.

In order to receive funding from the goat program, one must add their name to a sign-up sheet with the Central Kentucky Meat Goat Association. Cardenas says in obedience to state policy, newcomers to this type of funding are moved up the list. Applicants are chosen on a first-come, first-served basis between newcomers, then between those who are returning for more goat funding.

However, in order to sign up, an applicant must have a farm serial number (FSA), Cardenas pointed out.
Cardenas said people return to get more money from this program because there are so many new tools and facility aids to purchase each year that can help in raising goats. Some of this year¹s new goat developments include ³goat totes² and computer programs to help in keeping up with and maintaining a herd.

This funding is provided in a 50 percent cost-share manner and reimburses recipients for half of their expense. But there are some restrictions. Recipients may purchase does, for $100 or less, but must keep them for one year. One buck may be purchased, but it must be kept for two breeding seasons.

Checking in

Cardenas, who resides about 10 miles from the Casey County line in Marion County, is the administrator over goat producers in Casey, Adair, Green, Marion, Nelson, Spencer and Taylor counties. Even though she lives in Marion County, Cardenas manages to make her way over to Casey County to do some random spot checking every once in awhile.

"I do some farm checks, and Larry Dalton, of Casey County, says he is going to check every farm," she said. Cardenas says she has asked for some recipients to return their money after she found that they did not keep their livestock for the minimum time requirement. "There will always be those people who sell out early. We can ask for the money back. It depends on the circumstances," Cardenas said.

The Durhams say they have not yet been checked up on, but they do stand by their agreement with the state when it comes to receiving funding. "They (recipients) should fulfill their contract. It's theft when you don't," Durham said.

Cardenas is one of the many administrators across the state accepting an administrative fee. The state allows model program administrators, like Cardenas, to claim up to 5 percent to compensate for effort and expenses.

Cardenas claims 4 percent because of the expense that comes with being a program administrator.
She says her job includes duties and expenses such as going to the counties of which she administers, sending mailings, bookkeeping, extensive telephone bills, and traveling to meetings.

According to Keith Rogers, executive director of the Governor's Office for Agricultural Policy, the administrative fee must be included in the administrative agency's original application to administer a model program, along with a budget of how this money will be used.

With this goat diversification movement, many Casey Countians are beginning to look at meat goat farming, according to Cardenas. She is pleased about the success of the Casey County¹s growing goat farmer population.

"The market is there," she said. Not only is the market growing, but so is the business's profitability. "We used to be happy with $1 a pound. Now it's $1.45 to $1.50 and we couldn¹t be happier."


Forages program 'does a lot of good,' say administrators, participants

By Brittany Johnson
Summer Intern

Janis Smith and Curtis "Skipper" Todd have sown their last crop of tobacco.

In the farming business together, Smith and his son-in-law, Todd, have decided to turn their attention to their 100 dairy and beef cattle instead of the tobacco Smith had grown for years.

To do that, the pair needed to expand their alfalfa acreage, which would produce more feed for their cattle at a higher quality. The farmers signed up to receive funding under the forage model program, administered by the Casey County Soil Conservation District.

"It made it a whole lot easier. We got to sow more acres of alfalfa, and do it quicker," Todd said.

Like these two farmers, others can apply for forage model program funding by signing up on a waiting list, then providing proof of a soil test. Recipients are granted funding on a first-come, first-served basis.
They are then instructed to get the soil test.

The test results, along with a description of a plan for the farming operation, will tell those at the conservation district what the soil needs to increase forage production.


Pat Williams, a conservation technician with the Casey County Conservation District, is heading up the district's administration of the forage program. He said there are still 194 people on the forage funding waiting list, as of mid-June. (The list will remain open until July 31, at which time no new names may be

The seven-member Casey County Conservation District Board approves applicants and provides oversight in administering the program. If there are any problems or conflicts, they are voiced at a board meeting. The board is also reviewed by a state agricultural representative, according to Williams.

Two members of the CCCD Board, Brent Ware and Roger Weddle, also serve on the Casey County Agriculture Development Council. The council agreed at its June 28 meeting to put a halt to new sign-ups in all programs until waiting lists can be reduced.

Williams said he does not go to the farms of funding recipients specifically to check on how their money is being spent because he can see them during routine field visits and is assured the money is being used to further their operations. "I can see during field visits these practices are being applied," he said.

The conservation district, like many other model program administrators, accepts a 5 percent administrative fee for their effort and expenses in running the program. However, in this program, the budgeted fee goes back into the general operation of the conservation district.

Getting money

According to Williams, a forage applicant must be a land owner in Casey County whose farm is listed with the federal Farm Service Agency. The applicant must have the soil test conducted. Most applicants use the University of Kentucky when testing, he said.

The applicant must also have a plan for the farm through the Casey County Extension Office.

Once their name comes up on the waiting list and these requirements have been met, the applicant¹s project may begin. Once it is completed, the recipient brings in original bills and receipts from the purchases needed to complete the project. They will then be reimbursed for 50 percent of the expense up to $5,000 per farm.

According to Williams, the average forage program recipient receives about $2,800.

The Casey County Forage Program is one model program that has, so far, been free of controversy. Williams said there haven't been any problems.

" I don't personally know of any instances (of people scamming the program)," he said.

But, Williams says there have probably been instances where farmers did what they had intended with the funding, but it didn't work out as planned, so they went back to normal rotation.

Lately, Williams has noticed the more popular ways to spend forage money. Recipients are buying portable fencing and water containers, storage and utilization tactics and other methods of making the most out of farmland.

Overall, the program has been rewarding, Williams said. He agrees with John Murphy, an FSA committee member.

"I think we¹ve done a lot of good,\" Murphy said.




Institute for Rural Journalism & Community Issues

University of Kentucky
College of Communications & Information Studies

122 Grehan Building, Lexington, KY 40506-0042

Phone: (859) 257-3744, Fax: (859) 323-9879

Questions about the web site: Contact Al Cross, Institute director, al.cross@uky.edu

Last Updated: July 5, 2005