Growing Prosperity for Virginia Agribusiness

Agriculture and forestry are Virginia’s largest industries, with a combined annual economic impact of more than $70 billion. Together, these industries employ more than 400,000, and it’s estimated that each of these jobs supports an additional 1.6 jobs elsewhere in Virginia’s economy.

That’s why as part of the Commonwealth’s overall economic development strategy, the Virginia General Assembly established the Governor’s Agriculture and Forestry Industries Development Fund, or AFID, to help local governments attract new and expanding agribusinesses. Through the AFID fund, Virginia partners with local governments to provide grants encouraging businesses to build or expand facilities that add value to agriculture and forestry products, creating new jobs and markets for Virginia-grown products.

Agribusiness-Friendly Environment

“Supporting Virginia’s diverse agricultural and forestry sectors is a great way to grow and diversify our economy,” says Secretary of Agriculture and Forestry Todd Haymore. “With the AFID program, we are successfully incorporating two of Virginia’s leading industries into the Commonwealth’s overall economic development platform as we work to build a new Virginia economy. Having an economic development tool built around the realities of agriculture- and forestry-based businesses is a powerful sign to agribusinesses considering investing in the Commonwealth. The success of these businesses is a top priority for the Governor and for my office.”

Franklin County-based Homestead Creamery received the first AFID grant in 2012 for a plant expansion that allows the company to produce yogurt, cheese and sour cream in addition to milk, butter, cream and ice cream. The expansion also adds 20 full-time jobs. The business, which is comprised of a home delivery service, a production operation and a retail store that stocks local and regional products such as syrup, meats, jams and jellies, has been steadily growing since it opened in 2001. Co-owner Donnie Montgomery says the local food movement has contributed to the company’s success.

“It seemed like after 9/11, people’s interest in local food increased, and we were ready for that curve when it came. Our timing and marketing helped our business expand. We’ve had tremendous growth – it’s actually grown more than what we really envisioned,” Montgomery says. “Over the last seven years, we’ve gone from fewer than 20 full-time employees to almost 40. We run a home delivery division and we have a retail store and production operation. We have people on the road for us so it doesn’t take long for the number of employees to add up. Most of that money from salaries gets spent in the local economy.”

 International Attraction

In addition to homegrown successes like Homestead Creamery, Virginia has attracted a number of national and international agribusinesses. According to Haymore, the state’s strengths for recruiting and growing agribusinesses can be summed up in one important aspect – business climate.

“Our mild weather, world-class port system, and proximity to key national and global markets offer the perfect setting for agricultural and forestry producers. Our overall business climate is consistently ranked among the best in the country. Taken together, Virginia is a natural place for agribusiness to grow and succeed,” Haymore says.

Virginia’s business-friendly climate helped lure Tranlin, a subsidiary of China-based Shandong Tranlin Paper Co., to Chesterfield County. The company, which manufactures chlorine-free paper products made from agricultural residuals such as wheat straw, plans to invest $2 billion over the next five years and create 2,000 new jobs in the Richmond area.

“The impact of this is huge. When you look at this level of investment, you’re talking about a future impact that includes real estate taxes, tools and machinery tax and corporate income tax. You’re talking about jobs being generated and the results those jobs create – the homes and the apartments that will be built or rented, the consumer goods and services that will be purchased. It just impacts the entire region and state,” says Will Davis, director of Chesterfield County’s Department of Economic Development.

Davis says the arrival of Tranlin, which uses agricultural waste in its production process, will also have a significant financial impact on the region’s farmers.

“The financial impact for farmers across the state from Tranlin buying the residue from their fields is estimated at $50 million a year,” he says. “All of a sudden, you have farmers that have another revenue outlet saying,

‘I can now sell things that I couldn’t sell before, and I can sell it to an entity in the state.’ So it’s generating additional revenue for them, while allowing them to sell to other companies within Virginia. This is a big opportunity.”