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ONE-ON-ONE - August
2003
by Ed G. Lane
'My Heart is in Agriculture'
Kentucky Commissioner of Agriculture Billy Ray Smith talks about changes
in the state's agricultural community
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Billy Ray Smith
A farmer, former statesman, and businessman, Billy Ray Smith
was sworn in as Commissioner of Agriculture for the Commonwealth
of Kentucky in January 1996.
During his administration,
Smith has worked to develop the value-added industry, broaden
product marketing to a worldwide base, and strengthen the relationship
between agriculture and economic development.
An award-winning fourth-generation
farmer and cattle breeder, the Bowling Green native managed
a grain elevator and farm supply store for nearly 30 years.
He also served in the Kentucky General Assembly as the representative
for Simpson and Warren counties for 14 years.
Smith and his wife, Sandra,
have four children and 10 grandchildren.
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Ed Lane: During your eight years as commissioner, what one issue has
had the most impact on agriculture in Kentucky?
Billy Ray Smith: House Bill 611, which
established the Governor’s Agricultural Policy Board and appropriated
50 percent of phase one tobacco settlement funds to diversify Kentucky’s
agriculture, is going to have the most impact. It’s taken a lot
of work and planning. The investment of these funds will have a major
influence on the future of agriculture and will be the most dynamic
program I’ve seen in the eight years I’ve served as commissioner.
EL: Is this program directly related
to the ongoing decline in the burley tobacco market?
BRS: Yes. Farmers are scrambling to
try to find alternative crops and additional income. They want to
grow tobacco. That’s what they know how to do well. Farmers can’t
send their kids to school or pay their bills when their primary cash
crop – tobacco – is 50 percent less than it was five years
ago.
EL: The Governor’s Agricultural
Policy Board has been making grants to companies and organizations in
agribusiness using money received from the tobacco settlement funds.
How well is this program progressing?
BRS: In the beginning, it was difficult
to articulate the plan and purpose for the program and it was misunderstood.
The board has been able to help a lot of folks – commodity organizations,
cooperatives, alliances, some cooperative ventures. The concept is
working very well. Kentucky is just beginning to see the initial results
and returns on some of its investments. Funds in the Governor’s
Office of Agricultural Policy are awarded through the Agricultural
Development Board and have to be matched. Every time the board makes
an investment, some entity is making at least an equal match in that
venture.
It does Kentucky agriculture little
or no good at all to encourage farmers to produce a new product or
more of the same unless we can create a market and the infrastructure
to service that market. Farmers are the world’s best producers,
but they are the world’s worst marketers and they admit that.
So it takes a marketing strategy and someone with agricultural marketing
expertise to make contacts for them, establish markets, and process
those products. Kentucky needs to produce incentives to allocate capital
investment in facilities that add value to the state’s agricultural
commodities. Shipping goods to Tennessee or Florida or somewhere else
for the value to be added is not a good business strategy. Kentucky
needs to be processing more of its produce into soups, pastas, jellies,
jams, relishes – value-added products.
EL: It’s clear that value-added
processing creates more jobs in Kentucky, but does this give additional
money back to the producer?
BRS: Our goal is for Kentucky cooperatives
to be farmer owned. In Western Kentucky, the Purchase Area Aquaculture
Cooperative – the catfish co-op – is a typical example of
a farmer-owned cooperative. The co-op just signed a contract a few
weeks ago to furnish catfish fillets in 84 Kroger stores with the
“Kentucky Fresh” logo on it.
EL: What other financial assistance
is available to promote Kentucky’s agribusiness?
BRS: The Kentucky Agricultural Finance
Corporation (KAFC) is a part of the Ag Development board and the Governor’s
Office of Ag Policy. KAFC has $20 million in escrow to finance, bond,
and provide incentives to bring these value-added processing centers
to Kentucky as well as provide low-interest loans to farmers.
EL: What are a few examples of successful
new agribusiness ventures in Kentucky?
BRS: The opportunities vary in different
parts of the state. Aquaculture is doing very well – shrimp and
catfish production with the co-op in Western Kentucky. Vineyards –
grape and wine production – are beginning to move in Kentucky.
There’s growth in the fruit and vegetable business, and four
co-ops in Kentucky now help market farmer’s products. In-depth,
value-added livestock production – particularly in the beef arena
– is an expanding segment of Kentucky agriculture.
EL: What about goats?
BRS: Beef goat is the fastest growing
enterprise in Kentucky. Kentucky is now No. 3 in number of beef goats
in the U.S. Our producers are working hard to keep production on pace
with the market. There is a strong and increasing demand. A growing
Hispanic and minority population in this state wants the fresh product.
The Kentucky Department of Agriculture (KDA) has helped several Kentucky
processing/ slaughtering facilities to update and meet USDA standards
so they can custom slaughter beef goats.
EL: How has the Department of Agriculture
helped entrepreneurial agribusinesses launch in Kentucky?
BRS: KDA does most of its major work
in marketing and value-added processing. KDA also works with other
agencies and assists in the banking, financing and business plan stages
to help farmers entering into new agribusiness ventures.
EL: If a farmer needs expertise on
how to fertilize a crop or grow certain types of livestock or process
a food product, does KDA rely on this type of assistance from University
of Kentucky College of Agriculture?
BRS: KDA works very closely with the
extension service and the University of Kentucky’s research people,
depending on what project it is. If it’s recipes, cooking and
preparation, we rely on home economists commodity groups. If it’s
beef, pork, poultry, or aquaculture, KDA works with the appropriate
commodity association. Every commodity group is unique. KDA works
with them to fill a need and to create an expert marketing plan.
EL: How has the College of Agriculture
at the University of Kentucky assisted in transforming agribusiness
around the state?
BRS: Dean Scott Smith and I meet on
a regular basis and discuss issues. Dean Smith and I also sit on several
agricultural boards and commissions. KDA works very closely with the
UK’s Cooperative Extension Service, which provides education,
research and extension. The extension agents have offices in 120 counties.
These offices have computer access to the latest technology and methods
on application; they are the closest contact to Kentucky producers.
EL: The Kentucky Department of Agriculture
licenses, permits and supervises a broad range of business activities.
How large is KDA’s staff?
BRS: It has 310 employees. About 240
employees work in consumer protection, regulation, inspection, and
about 70 work in marketing and education.
EL: What technology enhancements has
KDA implemented during your leadership to improve the efficiency and
productivity of the department?
BRS: Today, a KDA inspector visits
a business with his computer. He enters the code number for the business,
the time, date and how many violations, if any, the business had.
His computer immediately updates KDA’s mainframe in Frankfort.
Technology and training has enabled KDA to begin 12 new programs and
expand eight with 33 fewer employees on the payroll today than when
I was elected in 1995. Because of this technology, KDA needs less
data entry operators. Because of these efficiencies, the department
has hired additional staff in marketing or other positions where we
could support our clients and taxpayers more productively. And our
data processors weren’t fired; they were transferred to other
positions where they could be more productive.
EL: Has your relationship with Governor
Patton been impacted by the Tina Conner matter and the recent pardons
of the governor’s aides who managed his 1995 campaign for governor?
BRS: No, basically none.
EL: During the 2003 Democratic primary,
you actively aided Ben Chandler for governor. Why did you decide to
support his campaign?
BRS: Ben Chandler and I have been
friends for a long time and I thought Ben best exemplified the type
of leadership needed to restore the dignity, character and respect
to the governor’s office and to take government to the next level.
Kentucky is in some tight economic times right now. Ben’s very
conservative. I consider myself as a conservative Democrat. He’s
not a tax and spend liberal. He has a conservative pay-as-you-go,
spend-what-you-have, be efficient, be productive approach. That’s
why I supported him and will support him in the fall.
EL: What do you anticipate will be
the key issues in the general election for governor this November?
BRS: The key issue right now is job
production. Folks will spend money if they have money. But if the
economy is slow, people are frankly worried about job security. Another
issue is quality healthcare that people can afford. Quality healthcare
is available, it’s just not affordable.
Ben Chandler does have a program to
get Kentucky’s economy going by expanding small business. These
jobs will stay in Kentucky, the ownership stays in Kentucky. Ben Chandler’s,
and my, philosophy is to grow jobs through small business development
and agribusiness.
EL: You’ll be coming out of office
in November and you’re not running for anything right now. Do you
have any kind of plan for what you might be doing?
BRS: My philosophy has always been
there’s always good demand for good people. Hopefully my performance
and leadership have been noticed and I can continue to serve in some
kind of leadership position in state government.
EL: If you were working for a conservative
Republican, would your philosophies be compatible?
BRS: We’re probably not that
far apart.
EL: The Department of Agriculture
is considered by many pundits to be one of the best-operated and managed
divisions of Kentucky’s state government. What has the KDA done
during your tenure as commissioner to earn these accolades?
BRS: The first thing the KDA did was
to be very, very careful in who we hired. We screened hard, interviewed
hard, and found the best people we could for a particular job or assignment.
I did not hire people based on who contributed to my campaign, how
much they contributed, or who was recommended by some politician.
We were very careful and hired people like we were running a business.
After we hired our team, we made sure
that they were properly trained. KDA has a mandated training program
for every employee. Our personnel have adhered to that program very
closely and our management team is better off for it.
Another strength is communication
within KDA. We communicate with and support all the divisions. We
keep everybody informed on what the big picture is. Initially, we
set major goals that we wanted to accomplish during an eight-year
program. Even though the first term was only four years, we based
our goals and objectives on an eight-year span and that’s worked
very well.
EL: Did technology enhancements also
help?
BRS: Information technology has been
a major part of our success. Basically there was very little technology
at KDA when I was elected. KDA is now Web based and links up to a
lot of other agri-associates. KDA was voted by the other state’s
agriculture divisions as the best Web program and best Web technology
of all the departments of agriculture in the United States.
EL: The four major income producing
cash crops in Kentucky are equine, poultry, tobacco and cattle. Poultry
growth has been sensational? Why is this?
BRS: Purdue, Cagle’s, Con-Agra,
and Tyson have all set up contract-growing in Kentucky.
EL: There’s been a lot of negative
publicity regarding environmental issues related to poultry contract-growing.
I’m sure you have reviewed those issues carefully.
BRS: KDA has a division of environmental
services for outreach and education. We actually work with the University
of Kentucky and commodity groups on good management practices, proper
setbacks, where to build, the size, and the way the fans are sloped
to circulate air, wind direction and distances from schools, hospitals,
churches, businesses. If farmers follow KDA’s environmental recommendations
and our community-based principles, they have little or no problem.
EL: Was expanding poultry contract-farming
a good agribusiness strategy for Kentucky?
BRS: The growth of the poultry industry
has provided an opportunity for many families to maintain their rural
culture and standard of living. If they want to stay on the farm,
educate their families, and pay their bills, poultry farming has provided
a way they could do that. Farmers sign a contract and receive a regular
source of income. Generally it’s a deal where a farmer furnishes
land, equipment, building and labor and a company will furnish birds,
feed, management, and healthcare.
EL: How does Kentucky’s timberland
rank in agribusiness?
BRS: Timber is probably the biggest
sleeper in agribusiness that we don’t talk a lot about because
we don’t have accurate production or sales statistics. KDA doesn’t
currently have a way to measure forestry or timber production. But
timber production, probably is the largest cash crop in Kentucky.
We do know this: Over 60 percent of the raw logs harvested in Kentucky
are going out of state. Kentucky is losing that value-added dimension
when the logs are leaving the state with no potential for us to add
value, employ people and provide a good product.
EL: What is Kentucky’s greatest
future opportunity in agribusiness?
BRS: Value-added processing –
that’s where the future is.
EL: Why are you so committed to agriculture?
BRS: My heart is in agriculture.
I’m a fourth-generation farmer and I managed a family business.
I’ve dealt with farmers, agriculture and agribusiness all my
life, it’s all I’ve ever done – farming and agribusiness
for 30 years, legislature for 14 years and now commissioner for eight
years. Agriculture is the only life I know.
Ed G. Lane is chief executive of Lane Consultants Inc. and publisher
of The Lane Report.
edlane@lanereport.com
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