Tobacco’s role in state economy dropping
In the late 1990s, tobacco accounted for more than 50% of Kentucky’s $3.4 billion a year sales of farm products, Brian Lacefield, director of the Kentucky Office of Agricultural Policy, told the Greater Owensboro Chamber of Commerce’s Rooster Booster Breakfast on Thursday.
In 2021, he told the crowd at the Owensboro Convention Center, only 4% of the $6.75 billion worth of products was from tobacco.
That’s largely because in 1998, 52 state and territory attorneys general signed the Master Settlement Agreement with the country’s four largest tobacco companies to stop efforts by the states to recover billions of dollars in health care costs that were associated with treating smoking-related illnesses.
Since then, cigarette sales have dropped by more than 50%.
But the tobacco companies continue to pay annual installments on the settlement agreements with each state.
Last year, the state received $127 million from the settlement agreement.
That was up from the year before, Lacefield said, because people smoked more during the first year of the COVID-19 pandemic.
Kentucky uses half of the funds it receives to help diversify agricultural products, Lacefield said.
Lacefield said nearly $5 million in settlement funds has been invested in Daviess County farms.
Since 2020, when meat shortages were felt during the early days of the pandemic, the state has invested more than $7 million in meat processing facilities, he said.
Daviess County farms sold $73 million worth of products in 1997, Lacefield said.
Twenty years later, he said, agricultural products here were worth $185.9 million.
Tobacco sales accounted for $13.6 million in 1997 and $13.4 million in 2017.
The number of farms here dropped from 1,042 in 1997 to 919 two decades later, Lacefield said.
Only 106 of those farms were still growing tobacco in 2017.
Lacefield was named director of the Kentucky Office of Agricultural Policy last April. Before that, he was Kentucky state director of the U.S. Department of Agriculture’s Farm Service Agency.
By Keith Lawrence Messenger-Inquirer