Farm Managers Discuss Breed Incentive Program

The Kentucky Thoroughbred Farm Managers' Club debated the pros and cons of the Kentucky Thoroughbred Breeders' Incentive Fund June 7 and plans to have its recommendations ready for review by July 1.

The incentive fund will provide about $12 million for the Thoroughbred industry. The money will come from the current 6% state tax on stallion fees and begin to accrue July 1.

A committee consisting of three representatives from the farm managers' club, Kentucky Thoroughbred Owners and Breeders, Kentucky Thoroughbred Association, and Kentucky Equine Education Project will meet June 23 to review information gathered by the groups and work toward finalizing a recommendation for the Kentucky Horse Racing Authority. The KHRA is charged with promulgating the rules for the incentive funds--one for Thoroughbreds, one for Standardbreds, and one for all other breeds.

Kentucky owners and breeders are debating whether the Thoroughbred breed development funds that will be available next year should be awarded to horses racing outside the state or reserved for those that win only in Kentucky. Also being questioned are residency requirements for mares that foal in the state.

At a June 7 meeting, farm managers' club president Ken Wilkins presented the membership with a look at how the money could be distributed using both options being considered. The meeting followed a May 18 town hall meeting at which horsemen were encouraged to voice opinions.

The farm managers' club mailed a survey to the membership, with a response deadline of June 15, to gauge how the membership conducts business and how it would like to see the incentive funds divided.

"Primarily, this was information for the club to help it form a unified position," Wilkins said. "We'll take the feedback (from the membership), and when we go to represent the farm managers' club at that (June 23) meeting, we'll use that information (from the survey) to make sure every voice is heard and every idea has been discussed.

There are so many different ways we can slice this. The most important thing in this is one voice working together."

Based on information from The Jockey Club, Kentucky produces about 27.5%, or 9,500 of the 34,000 foals born on average in North America each year. On average, 51% of the members of the foal crop become winners in their lifetime.

During the presentation, Wilkins outlined pros and cons for each program. He noted the Kentucky-only program could net breeders average payments of $16,000, while the nationwide and international payout checks could average $2,700.

Based on information obtained from a May 18 Town Hall meeting and a survery of horsemen: the pros for the Kentucky-only program are larger payouts and building links between breeders and the state's racetracks. The cons of the Kentucky-only program are no awards for horses sold and raced out of state; fewer rewards; random payouts beyond breeders' control; and the fact such a program could encourage out-of-state horsemen to not breed in Kentucky.

The pros for the nationwide and international program are that it rewards all winners; makes Kentucky a national market; offers the same overall payout but more frequent, smaller checks; and with more consistent payments, breeders can develop expectations. The cons for the national and international program are much smaller payouts per horse--some said a $2,700 check is meaningless--and the possibility such a program wouldn't get many breeders' interest or attention.

The three options for mare residency requirements are to keep the current program--Kentucky foaled and by a Kentucky stallion--set a minimum-day requirement for Kentucky residency, or to establish a tiered program for a percentage of payment.