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Reflections on the Maryland Bred Fund Program

Mid-Atlantic Thoroughbred asked our first editor and past MHBA executive director Rich Wilcke to contribute to our coverage of this important program celebrating its 50th year. He shares his reflections with our readers in the April issue's guest editorial.

In any region, there can be few industries more attractive or appealing, environmentally or aesthetically, than the breeding of fine horses. Horse farms are never a cause of noise, pollution, smokestacks, or traffic, and rarely even offensive odors. Their core contribution is open space as green and as beautiful as a public park but as economically productive as a factory. That such pastoral enterprises are direct spawns of the age-old sport of horse racing is precisely what differentiates that sport from baseball, football or other “professional” games, none of which engender similar ancillaries. In terms of their economic impact, racing and breeding together create double that of any sport by itself.

Little wonder then that many North American jurisdictions have sought for 50 years to create legal incentives to promote horse farming within their borders. Location is the key because, while racing stimulates breeding, there is no reason why racing in one state, say, New York, could not support breeding in another, say, Virginia. Indeed, this is precisely what occurred for a number of decades. Virginia had a 200-year tradition of horse breeding while New York had none, due largely to winters that linger well into early breeding seasons. New York racing was strong due to the interest in large population centers, but all the benefits from the breeding it spawned went elsewhere.

For the first decade after World War II, there was no wintertime racing in the Northeast or Mid-Atlantic. The breeders, owners or fans from those areas that yearned for racing had to go south during the winter to Hialeah and other Florida tracks. Of course, in those days, the common mode of travel was passenger trains, many of which happened to travel through–and often stop at–Ocala, the center of a beautiful county that had been planted in orange trees in the 1920s. However, as the area is roughly 100 miles north of Tampa, crop-destroying freezes tend to occur all too often. By the late 1950s, lots of orange-grove farmland was for sale at reasonable prices. So it was inevitable perhaps that a few northern horsemen would eventually conclude that Ocala might make a wonderful location for horse farms.

Maryland had had an active breeders association since the early 1930s, and its first executive secretary, Humphrey Finney, made periodic efforts to promote Maryland horses. He even talked the owners of Laurel racetrack to run races for state-breds now and then. But he had no purse money or leverage so that his efforts, while laudable, had minimal effect. By the early 1960s, however, the move of several prominent Maryland breeders to Ocala had aroused an urgency to promote breeding in the Free State, and an effort was made to come up with a solution.

The goal was farms, and it was reasoned that if more breeders could be induced to foal their mares in Maryland, it could not help but foster more horse farms in the state, or at least make existing farms more profitable, hence, more sustainable. That rationale for establishing a breeders’ incentive program is one that legislators could endorse; i.e., more jobs and more lovely green open space. While some in other states invariably spoke of “improving the breed” as a goal of incentive programs, that rationale has never been convincing to legislators who see no reason to divert any portion of the pari-mutuel tax away from education, for example, toward horse breeders. The attitude is, “Why should my constituents improve a breed of horses?” But most legislators do approve the encour­aging of horse farms. In practice, of course, increasing the number of state-breds will almost always enhance average quality.

During its 1962 session, the Maryland Legislature passed House Bill 106 creating the Maryland-Bred Fund Program, which was signed into law in April by Governor J. Millard Tawes. The impact of the law, which dedicated .34 of 1 percent of the pari-mutuel tax to special races and to awards for the breeders and sires of winning state-breds, was almost instantaneous. Average prices at the Eastern Fall Yearling Sales for Maryland-breds rose from $1,626 in 1961 to $3,024 in 1963, revealing a sharp increase in demand, if not quality. And in the wake of positive stories from coast to coast, the breeders’ organizations in California, Florida, Illinois, New Jersey, New York and West Virginia wrote to the Maryland Horse Breeders Association requesting copies of the law. Leon Rasmussen commented in the Daily Racing Form that “Maryland’s breeding industry is certainly on the march.”

Today, a half-century later, the advantage achieved by Maryland for being the first to have such a program has all but dissipated. There are more than 30 states and Canadian provinces that now have incentive programs in the spirit of the Maryland Fund, and they serve not only Thoroughbreds but also Standardbreds and racing Quarter Horses. The Thoroughbred programs, including dedicated purses, total about $150 million. But the harsh reality is that the programs today are more defensive than offensive in nature. No state can afford to give them up, but officials of each realize that their main benefit is keeping the breeders, and to a lesser degree the stallions, at home. To analogize, if my favorite bar offers half-priced drinks during Happy Hour, I am not likely to be attracted by half-priced drinks down the street. Of course, each bar’s owner would prefer to revert to full prices but it can’t be done unilaterally, and no one knows what the effect might be.

There is much variation in the way funds are distributed among the many programs. Some are economically sound and quite effective; others are not. This is because most have been structured through politics, not economics. However, evidence is good that the Thoroughbred breeding industry in Maryland has been far stronger and more competitive during the last five decades as a direct result of the Maryland Fund. The leaders of the MHBA who conceived the approach and were able to get it passed into law deserve the gratitude of all Marylanders, as well as the gratitude of those in all those other states and provinces. Certainly worth a thanks and a hearty toast!

Rich Wilcke, who served as executive vice-president of the MHBA from April 1986 to September 1995, is an equine business faculty member at the University of Louisville.


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