Introduction: The Kentucky Quarter Horse Association Breeders' Incentive Fund
The Quarter Horse is the world's most popular breed, and the American Quarter Horse Association (AQHA) registers more than 150,000 foals annually. Because of their versatility, Quarter Horses in Kentucky are dispersed among many more counties and towns than any other breed. The Commonwealth, best known for its Thoroughbred industry, has more verified Quarter Horses (37,611 in 2007) than Thoroughbreds. The Quarter Horse industry is a vital element in Kentucky's collective equine industry.
The Kentucky Quarter Horse Association
The only official affiliate of the AQHA in Kentucky, the KyQHA is a state-chartered not-for-profit corporation designated by the Internal Revenue Service as a 501(c)(7) organization.
Allocation of Funds from the Kentucky Horse Breeders' Incentive Fund
The distribution of the funds allocated for Quarter Horses is made through the Kentucky Quarter Horse Association Breeders' Incentive Fund (KyQHA BIF).
Administration of the KyQHA BIF
The intent is that the KyQHA BIF avoids to the maximum extent possible the need for burdensome recordkeeping and administrative costs. Therefore, the KyQHA BIF utilizes a system in which incentives are based for performance horses on points earned through the AQHA Incentive Fund, and for racehorses on racing points awarded according to conditions and order of finish for races recognized by the AQHA. AQHA Incentive Fund points and AQHA racing points are collected and maintained as a regular procedure by the AQHA. Once the KyQHA confirms eligibility, calculation of incentives is straightforward. By utilizing existing AQHA data resources, direct costs of administration are minimized.
The KyQHA Approach: Incentivizing Demand
It is a firm consensus of the KyQHA board of directors that, regardless of breed or sport use, creating breeder incentives to supply more horses (for which there may not be a sufficient demand) will foster mediocrity and, of necessity, depress their market price. Therefore, the KyQHA BIF is structured to create incentives that will only enhance demand. Establishment of incentives to boost demand for Kentucky-bred Quarter Horses, leaving their supply to respond in a natural market fashion, will improve the prices proffered for them. This is a vastly more efficient method of encouraging production than stimulating supply artificially and directly rewarding producers of foals demanded by no one. In addition, increasing the demand has the not-insignificant advantage of increasing the bona fide profit opportunities for horsemen. Encouraging people to breed horses is an ethical goal only if there is a legitimate chance of economic return. Concentrating incentives on the demand side is the only approach that assures this.
The primary goal of the KyQHA BIF is to increase equine economic activity related to the Quarter Horse breed, by enhancing profit opportunities for both new and existing owners and breeders. The program developed was designed by individuals experienced in showing and racing, in the development and administration of incentive programs, and in the record of similar initiatives in other jurisdictions. The KyQHA BIF was also designed with input from AQHA officials.
Horsemen who participate in sanctioned competitions, whether those are licensed pari-mutuel races or nationally recognized shows, tend to invest more money and time in their equine pursuits than their peers. Whether amateurs or professionals, these people tend to be more active in their associations and more politically active. They are, in short, the economic leaders of this industry, and this reality provides rationale for incentive fund emphasis on racing and showing.
The following KyQHA BIF eligibility criteria must be met to qualify for awards:
1. The foal must have been born in Kentucky during 2002 or later;
2. The foal must have been conceived in Kentucky;
3. The "sire" on the certificate of registration must have stood the entire breeding season solely in Kentucky in the year that the conception occurred to be eligible for sire/stallion awards.*
*Note: No semen shall be allowed to be shipped into Kentucky from out-of-state stallions for show horse awards. Semen may be shipped within Kentucky. In order to qualify as an eligible show horse sire for KyQHA BIF purposes the stallion must have a permanent domicile in Kentucky during the entire duration of the designated breeding season (regardless of natural, shipped, or freezing semen). The only allowances will be for the reasonable transport to, and showing or racing at, and transport back from, a documentable show, race or event or a documented medical emergency.
The KyQHA BIF increases equine economic activity related to the Quarter Horse breed, by enhancing profit opportunities for both new and existing owners and breeders. The health of our Kentucky economy is contingent on ensuring the long-term viability of the horse, racing or non-racing, and thus maintaining the quality of life that we all recognize as uniquely Kentucky.
What inputs are needed and where do they come from?
From the Kentucky Horse Racing Commission (KHRC) each year:
1. Dollars to be allocated from the Kentucky Horse Breeders Incentive Fund (KRS 230.804) to the KyQHA BIF for the implementation of the fund.
From the AQHA:
1. The number of Kentucky Foaled Quarter Horses that started in an AQHA approved race in the program year being computed.
2. The number of Kentucky Foaled Quarter Horses that showed in an AQHA approved show in the program year being computed.
3. The total race points earned by Kentucky Foaled Quarter Horses for the program year being computed.
4. The total AQHA Incentive Fund points earned by Kentucky Foaled Quarter Horses for the program year being computed.
5. Contact information for owners, breeders, AQHA Incentive Fund foal nominators, sire owners and AQHA Incentive Fund sire nominators of Kentucky Foaled-Kentucky Sired Quarter Horses for the program year being computed.
 Quarter Horse Associations Join Kentucky Education Effort, the Blood-Horse, September 4, 2004
Read the Quarter Horse Journal article about the KyQHA BIF Program
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