The genesis of one of Virginia’s youngest and most highly regarded economic development programs was connected to a humble little potato chip?
In 2008, I was serving as Virginia’s Commissioner of Agriculture and Consumer Services (VDACS) at the appointment of Governor Tim Kaine.
Governor Kaine asked me to use my private sector background in economic development and global trade to enhance public-private partnerships with our agriculture and forestry industries to support their growth, increase their exports, and create jobs.
Virginia and other states have routinely made strategic investments in various industries that have helped create jobs and prosperity in their communities.
However, businesses in agriculture and forestry – despite their status as Virginia’s oldest and largest private sector industries – were too often overlooked as economic development assets, and consequently enjoyed little precious state investment to encourage their growth and expansion.
Such was the case with Route 11 Potato Chips.
When this Shenandoah Valley-based small business inquired about potential modest state support to expand its operation, create more jobs, and purchase more Virginia-made ingredients – in this case, potatoes – we couldn’t find any levers to pull.
There was simply no program designed to support small businesses like Route 11 that utilized Virginia agricultural products to create jobs and opportunity.
These rural job creators were essentially frozen out of the support offered to large companies in suburban and urban regions of the state.
Governor Kaine encouraged me to find ways to remedy the situation, but sadly the Great Recession meant the timing wasn’t right for creating a new investment program at the same time we were making numerous difficult cuts to balance the state’s budget.
But the seeds for a remedy were planted then, and several ideas took root even as the economy continued to struggle.
A few years later, Governor Bob McDonnell appointed me to serve as Virginia’s Secretary of Agriculture and Forestry.
As the economy mercifully improved, Governor McDonnell proposed, and the General Assembly unanimously approved and funded, the Virginia Agriculture and Forestry Industries Development (AFID) fund.
Input was sought from stakeholders like the Virginia Farm Bureau, Virginia Forestry Association, Virginia Agribusiness Council, Virginia Forest Products Association, and legislators such as Delegates Steve Landes and Ed Scott and Senators Bill Stanley and John Watkins, all key supporters of agriculture and forestry in the General Assembly.
With their feedback, Agriculture and Forestry Deputy Secretary Travis Hill, VDACS staff, Governor’s policy office colleagues, and I modeled the AFID on the successful Commonwealth Opportunity Fund, which has supported all manner of job creation and economic development throughout Virginia.
However, we added a few features to the AFID that make it unique in the world of economic development:
- It is available only to agriculture and forestry-related businesses.
- There are no minimum levels of investment or job creation, ensuring that even the smallest businesses in the most rural areas, where jobs can be most precious, can qualify.
- And, perhaps most importantly, grant recipients must purchase at least thirty percent of their raw products from Virginia producers, thus providing more sales opportunities for our family farms.
This December marks the tenth anniversary of the very first AFID grant, which was awarded to Homestead Creamery, one of Virginia’s most well-known locally-owned dairy processing facilities, based in Franklin County.
And, because of AFID program successes in late 2012 and during 2013, we sought additional money for the fund and made some strategic changes to ensure it was creating as many revenue and job producing opportunities as possible when Governor Terry McAuliffe re-appointed me as Secretary of Agriculture and Forestry in 2014.
Since then, grants have been awarded to support businesses in every corner of the state from Virginia Beach to Shenandoah County, and Alexandria to Carroll County, producing all manner of Virginia-grown and -made products, including craft beverages, ice cream, leafy greens, wood flooring, fish, and vegetables.
Route 11 Potato Chips was also a beneficiary of the AFID program in 2015, assisting it to expand further.
By every measure, AFID has been a true Virginia success story.
The program has helped create significant revenue and jobs for the Commonwealth – more on that in a moment – but it has also been a source of connection and commonality between communities at a time when so many geographic, cultural, and political divides seem insurmountable.
For example, a rural legislator may not think a new cidery or brewery in Alexandria or Richmond impacts his or her district, but when the legislator learns that his or her constituents are selling apples, grains, malting barley, and hops to those businesses because of their AFID “Buy Virginia” commitments, an important connection has been made.
Similarly, an AFID-supported sawmill expansion in Southside Virginia may not capture the attention of elected officials in Northern Virginia, but when a major construction company in Fairfax County gets its project back on schedule thanks to a new supply of lumber from Pittsylvania County, they better understand how our urban, suburban, and rural economies are intertwined.
These kinds of intrastate economic connections are critical for building a resilient economy and a more united Commonwealth.
But now, let’s look at successes we can quantify with cold, hard numbers.
In the last decade, Virginia has invested approximately $12 million through the AFID program to assist in bringing new business to the Commonwealth and help existing companies expand operations.
In turn, these businesses have invested $1.45 billion, created more than 4,000 new jobs, and committed to purchasing more than $1.43 billion in Virginia-grown products according to my former VDACS colleagues.
That’s an astounding 120-to-1 return-on-investment with positive impacts felt throughout the Commonwealth.
That incredible ROI and the numerous successful projects that have already been completed across the state are why I believe the time is right for Virginia to significantly increase its support of this powerful investment program.
The AFID program receives around $1 million each year.
A lean team of three dedicated professionals at VDACS, including program manager Stephen Versen, who has been there since the program began, administers the fund.
With additional financial and human resources, the AFID program and team could do more for the Commonwealth.
So as Governor Glenn Youngkin and his Agriculture and Forestry team, led by Secretary Matt Lohr and VDACS Commissioner Joe Guthrie, and the General Assembly prepare their budget amendments for the upcoming Session, I hope they will consider making an even larger commitment to this modest, yet very successful program.
I have worked in public and private sector economic development for nearly 25 years, including serving as Virginia’s Secretary of Commerce and Trade after my time as Virginia’s second Agriculture and Forestry Secretary.
I can state with confidence that the AFID program is one of the most powerful investments we can make to help create jobs and support communities across Virginia – rural, urban, and suburban.
And to think it all started with a humble little potato chip…made in Virginia, of course.