Crisis or Opportunity

By John R. Gaines

The Chinese ideogram for "crisis" is the same as the Chinese ideogram for "opportunity." There is a certain wisdom in this. The economic crisis created by the mare reproductive loss syndrome and the almost equally disturbing equine heart disease epidemic has been consistently underestimated as a $250 million disaster. This number reflects only a direct hit caused by this profound environmental insult and biological attack.

The indirect hit from losses incurred to subsidiary enterprises has not as yet been determined -- ranging from advertising agencies, banking, blacksmithing, bloodstock agencies, catering, equine organizations, farm and feed supplies, fencing, hotels, insurance, landscaping, law offices, paint suppliers, paving, photography, publications, restaurants, tack shops, and transportation. These represent a spectrum of goods and services that account for one out of every 20 jobs in the Commonwealth.

The crisis affects at least 60,000 people. These are real people raising real families, educating real children, caring for real grandparents, and paying off real mortgages. These are not rich people.

It is nauseating to hear the constantly repeated mantra, "Why should we do something to help those wealthy, multimillionaire horsemen?"

These so-called wealthy dilettantes should be honored as stewards of the land and as the creators of one of the most beautiful man-made landscapes in the world that nourishes the souls of all who live here, as well as attracting millions of tourists to the area to see if the grass is really blue.

Why is the epicenter of the horse world located in Lexington? Because 25 of the world's leading stallions are located here. If these 25 stallions were placed on 25 horse vans tomorrow and moved to Nome, Alaska, then that city would immediately own the horse industry in North America. It is these same so-called multimillionaire horsemen, who, exercising their own free will, have brought these world-renowned stallions to the so-called Bluegrass crescent of Fayette, Scott, Bourbon, Woodford, and Jessamine Counties.

Yes, Virginia, there is a Santa Claus. These horsemen have created the equivalent of a 410,000-acre national park that is privately owned, privately developed, and privately maintained at no cost whatsoever to the taxpayers.

The importance of the industry to the economy of Kentucky is indisputable:

  • Public and private sales of horses exceeded $1.5 billion last year.
  • Economic turnover when Thoroughbred revenue is recycled throughout Kentucky's economy is more than $6 billion.
  • Nearly two-thirds of owners and breeders have household incomes of less than $75,000; the majority have fewer than five mares. So even a single instance of foal loss can be financially devastating.

    Most breeders have small operations, employing 10-30 people year-round. A 20-30% crop loss, as Kentucky breeders now face, may mean as many as one-third of the jobs will be lost at many farms.

  • The one-year economic loss from an aborted Kentucky-bred foal is estimated at $116,000, with the farm losing $13,000 in boarding fees, the stallion's owner $15,000 in stud fees, and the mare's owner $88,000 in sale revenue. When a small farm loses amounts like these 10 or 20 times over, the result may well be foreclosure.

The incentives to induce Toyota to Georgetown, Ky., were $147 million. Although the horse industry is more important to the state's economy, not one dollar has ever been allocated to attract a horse factory to the state.

The reason for the power shortages and rolling blackouts in California is because there has never been a dynamic, rationally conceived, well-thought-out plan to deal with this enormous problem. The time has come to create such a strategic economic development plan for the horse industry, just as they have for other, less important industries.

This is the one and only way that a "crisis" can be transformed into an "opportunity."