FRANKFORT — A Kentucky-based company looking to process the fiber of around 750 acres of hemp and the jute-like plant kenaf has been approved for $381,500 in state funds to expand its processing facility.
The Louisville-based Sunstrand received the Kentucky Agricultural Development Board’s (KADB) approval for the funding, drawn from the state’s tobacco settlement agreement dollars, in February. Approved state funds will be used to match county-level KADB funds up to $381,500, with any shortfall covered as a loan up to the full amount, Governor’s Office of Agricultural Policy (GOAP) Deputy Executive Director Bill McCloskey told the Tobacco Settlement Agreement Fund Oversight Committee yesterday.
McCloskey said the natural fiber processed by Sunstrand is being used instead of plastic and glass fiber in car parts manufacturing and other industries, with economic benefits.
“It can be a lower input for the plastic and injection mold industry, specifically car parts,” he told the committee.
Sen. Dennis Parrett, D-Elizabethtown, told the committee that funding Sunstrand may lead to commercial fiber processing-facility requests from other parts of the state. “We opened up an avenue for several of these others. Are you going to be able to treat them the same way?”
GOAP Executive Director Warren Beeler said “probably not.”
“This idea was to do a seed plant and do a fiber plant, and then step aside,” he told Parrett.
Another hemp-related project that came before the KADB in February was a request from the Kentucky Hemp Research Foundation, which McCloskey said requested $189,592 in state and county-level agricultural development funds for research. Total funds approved by the board were $2,000 in Floyd County funds, said McCloskey.
The county funds were approved because they were prioritized by the county, Beeler told the committee.
“We trust the county more than anybody, and they put a high priority on it, then we assume that’s how they want to spend their money,” said Beeler.
At the same time, Beeler said the KADB “felt like research probably needs to be left at this point and time to the (state) universities,” which McCloskey said were conducting 17 hemp research projects in 2016.
The KADB in February also approved:
• A request for $12,000 in county funds for Hopkinsville Elevator to investigate business opportunities in canola;
• $179,373 for Eastern Kentucky University for robotic milkers for dairy farming;
• $50,000 to Kentucky Agricultural Opportunities Inc. to create a producer-owned entity to look at business opportunities in Central Kentucky, specifically the Bluegrass Stockyards project.
Committee Co-Chair Rep. Myron Dossett, R-Pembroke, thanked the GOAP for the update on how tobacco settlement dollars are being used for the state’s benefit.
“I think it’s important for us to share …the importance of what this tobacco settlement money is doing, not only for our ag producers, but how it’s impacting our communities,” said Dossett.