FRANKFORT         Kentucky began doling out yesterday nearly $147.6 million in tobacco settlement money on agriculture, including funding Fayette County's farmland preservation effort.

The state board that will decide how the settlement money is spent approved a preliminary plan for the two years, with some tentative dollar figures:

$20.4 million for established agriculture sectors such as forage-based livestock (largely cows and horses), grains, horticulture, tobacco and timber.

$13.6 million for new and emerging enterprises such as aquaculture.

$10.2 million for processing efforts to add value.

$6.8 million to fuel the direct-marketing infrastructure.

$3.4 million for technical support.

$13.6 million for other proposals such as matching efforts by counties or buying down interest.

``We've got to make some hard decisions, some that not everybody's going to like,'' said Gov. Paul Patton, chairman of the Kentucky Agricultural Development Board, which will allocate the money.

John-Mark Hack, the board's executive director, indicated that the plan is fluid, and meant only to address immediate needs.

``Our long-term plan will probably be quite different,'' Hack said. The outline is intended to help guide similar boards set up in each county.

The state board also reviewed a ``request-for-proposal'' that anyone seeking funding will use. The guidelines will be available on the Web site of the Governor's Agricultural Policy Office at http://www.kyagpolicy.com.

The board, which has been working since this summer on developing criteria for handing out the cash, will target areas with the greatest potential for benefiting the most people, particularly farmers in tobacco-dependent areas, Hack said.

But the specifics of the preliminary plan caused some contention among board members, especially those who thought there was potential for a commodity to be slighted.

For instance, horses and tobacco, two of Kentucky's biggest farm money-makers, were not mentioned in the first version of the draft.

``We cannot take the attitude that we must spread these resources among everybody,'' Patton said. ``We will fritter it away. We can't do everything, not this year.''

But the state board indicated it would be unlikely to be locked into category-based spending limits, and individual counties also would not be held to the percentages.

``These are the things we're thinking about, and this is the magnitude of what we think they ought to be,'' Patton said. ``It would be my expectation that the county plans be compatible with this approach, compatible being a little loosey-goosey. There ought to be some relationship to what we're doing; they ought not to be building a baseball stadium, for instance.''

Fayette County is the first direct beneficiary of the tobacco money, getting approval for a plan that will eventually deliver $15 million for the county's purchase of development rights program.

The board, with Lexington Mayor Pam Miller looking on, voted to use $3.77 million to finance the first two years of a $25 million bond issue from the rural Development Board Fund for farmland preservation.

The agriculture board left open the question of how to pay off the bonds after the first two years, which could require a significantly larger financial commitment from the state.

Of the money raised, $15 million will go the Fayette County Rural Land Management Board to pay farmers not to develop land.

The other $10 million goes to the state Purchase of Agricultural Conservation Easements Board for similar efforts across the state.

The rural development fund was the second of several direct appropriations mandated by the legislature out of agriculture's share of tobacco money. More than $5 million was approved earlier to fund the Center for Agricultural Development and Entrepreneurship.

All this money is coming from Kentucky's share of the tobacco settlement that the states signed with cigarette makers.

Of that $187.6 million, $40 million was set aside in 2000 to shore up payments to farmers from a separate fund. All of the money is under the control of the state board.