FRANKFORT, Ky. - Kentucky’s annual agricultural output now stands at over $5.6 billion thanks in part to Kentucky’s tobacco-funded Agricultural Development Fund, state lawmakers were told in December.

“Without the Agricultural Development Fund investments, I suspect we wouldn’t be where we are today in agricultural output,” Governor’s Office of Agricultural Policy Executive Director Roger Thomas told the Tobacco Settlement Agreement Fund Oversight Committee.

The 14-year-old Agricultural Development Fund—created by the 2000 Kentucky General Assembly as a repository for the state’s agriculture share of a multi-billion 1998 master tobacco settlement—has invested over $425 million in county, state, and regional projects since 2001, according to the Governor’s Office of Agricultural Policy. The fund is overseen by the Kentucky Agricultural Development Board, also established by lawmakers in 2000 to help the state diversify its heavily tobacco-reliant agricultural economy.

Rep. Wilson Stone, D-Scottsville, a farmer and co-chair of the oversight committee, said the fund has a role in “taking Kentucky from where it was in 2001 … to where we are now, and I think we should be appropriately proud of that.”

Tobacco production was a $1 billion industry in Kentucky in 1998 with 118 of the state’s 120 counties growing the plant, Thomas said. Today, tobacco “is still very, very important” in Kentucky, but its economic impact has lessened while the agricultural economy has grown.

“You look at the ag economy and how it’s grown from 1998 to where it is now—no, the [Agricultural Development Fund] didn’t have all that effect, but it certainly had a part of that effect,” Thomas stated.

Committee Co-Chair and farmer Sen. Paul Hornback, R-Shelbyville, thanked the Governor’s Office of Agricultural Policy for its work with farmers including those in his district.

“They have the ability in the future to benefit a number of other farmers…and our changing world of food production,” said Hornback.

A total of 17 agricultural diversification and rural development programs and projects totaling $1.73 million were approved for Agricultural Development Fund funding by the state Agricultural Development Board last month. Among them is an indoor farmers market planned for Henry County that will operate under oversight of the Pleasureville Economic Development Council LLC.

Sen. Dennis Parrett, D-Elizabethtown, said the Agricultural Development Fund has done a lot for farmers markets and farm produce across the state. “Look how many farmers markets we have,” said Parrett. “The farmers markets across the state really probably wouldn’t be where they are today without [the fund],” he said.

Agricultural development funds totaling $11,500 were approved for the Pleasureville project to help renovate a building for year-round use. Additionally, all products sold in the new market will be marketed as “Kentucky Proud” by the state Department of Agriculture, says the Governor’s Office of Agricultural Policy.

The connection of the Agricultural Development Fund to programs like Kentucky Proud shows how broadly the fund has impacted Kentucky agriculture over time, said Thomas.

“It has provided many, many opportunities for former tobacco farmers and current tobacco farmers to enter into other enterprises to sustain their farmers,” he said.