US: Tobacco Settlement Money Creates ''Significant Positive Impact'' on Kentucky, Study Finds

Source from:  WDRB 11/23/2015

Over the past seven years, Kentucky invested nearly $200 million from a landmark deal with cigarette makers on projects meant to help the state's farm economy move away from tobacco, a new report finds.

The study, commissioned by the Governor's Office of Agricultural Policy, found that spending money from the 1998 tobacco settlement has had a "significant positive impact on agriculture and agribusiness" in the state.

In particular, University of Kentucky researchers analyzed 54 projects in Kentucky that received $42 million in tobacco-settlement funds. Those projects, including livestock, grain and vegetable operations, created an average of $2.03 in extra farm income for each $1 invested.

A previous study calculated the return on investment from 2001 to 2007 at $1.87 for each dollar spent, said Alison Davis, the study's lead author and a UK agricultural economics professor.

Davis said the findings presented Friday to the Kentucky Agricultural Development Board are "very conservative," because researchers only included projects whose impact could be measured and documented.

"It shows some growth, but it could be much bigger and it is much bigger," she said. "But we can't put a number on it at this point."

Among the projects given the highest five-star rating for meeting all of their goals and having "sustained positive impacts" is Louisville Metro's Farm to Table program, which received $330,000 in agriculture development funds. The program aims to boost production and sales of Kentucky-grown food.

The city's initiative resulted in $3.2 million in local food sales and generated $9.70 in farm income for each $1 invested, the study found.

For the 54 sample projects reviewed statewide, researchers found that tobacco-settlement money helped create:

708 new jobs
465 new products
77 new markets
Livestock projects generated the most new jobs, 365
The report recommends that state officials make the funding available to farmers besides those who raised tobacco in the past, eliminating an "uneven playing field."

Researchers also noted that some reports required of farmers didn't have enough information to determine whether the grants had been effective.

"No project final reports should be accepted if they are incomplete," the study recommends. Enditem