VA AGRICULTURE & FORESTRY SECRETARIAT STRATEGIC FOCUS: “BUILDING DOMESTIC CAPACITY, GROWING GLOBAL EXPORTS” GEORGE MASON UNIVERSITY, SCHOOL OF PUBLIC POLICY GLOBAL TRADE RELATIONS – STUART MALAWER, J. D. , PH. D VIRGINIA SECRETARY OF AGRICULTURE & FORESTRY TODD P. HAYMORE FEBRUARY 29, 2016
DISCUSSION OVERVIEW Economic Power of VA Ag, Forestry What We Did & Why We Did It Domestic & Global Components Successes Achieved From Initiatives Where We Go From Here
STATEWIDE IMPACT OF AG, FORESTRY Two of Virginia’s Largest Private Industries Economic Impact: $70 b Revenue Annually >$52 b from Agriculture; >$17 b from Forestry Provide >400 k Jobs Via Production, Value. Added & Ripple Effect Industries More Than 10% of all VA Jobs; Every Industry Job Supports 1. 5 Jobs Elsewhere
MCDONNELL 2010 DECISION Full Integration of Ag, Forestry Industries into Economic Development, Jobs Creation Agenda First Governor in Modern VA History to Create Strategic Plan for State’s Largest Industries Plan’s International Focus: Capture Benefits of Globalization, Meet Growing Demand in Marketplace; Create International Network
MCAULIFFE 2014 MANDATE “Do Everything Better Than You Did Before” “Break Every Record You Set Before” “This Is Just An Appetizer For What’s To Come” “Make Virginia The Most Pro-Agribusiness and Forestry Industry State In U. S. ” “Make Virginia the East Coast Capital For Ag, Forestry Exports” “…You Can Sleep When You’re Dead”
SECRETARIAT TOP PRIORITIES Enhance Domestic Economic Development Expand Existing Operations Recruit New Businesses to Virginia Build Domestic Capacity for New Exports Increase International Marketing & Exports Expand Virginia’s Global Footprint Increase Exports to Key Growth Markets New Exports Build Domestic Capacity
DOMESTIC DEVELOPMENT: NEW CAPACITY Governor’s Agriculture & Forest Industries Development Fund (AFID) Why? Ag, Forestry Were ‘Falling Through Cracks’ Incentive Fund for Econ. Development, Planning Use for Recruitment, Expansion of Businesses Focus on Processing & Value-Added Projects 30% ‘VA Grown’ Mandate Key for Ag Growth No Export Directive, But Connections Are There
DOMESTIC DEVELOPMENT: NEW CAPACITY AFID Economic Development Incentive Program Launched in Late 2012 31 Projects To Date: 28 Agricultural, 3 Forestry Private Sector Investment: >$325 million Jobs Announced: 1, 518 Across 24 Localities Average Use of VA Grown Products: 77%, Resulting in More than $454 m Purchase Intentions AFID Facility Investment to Date: >$2. 64 m
AFID FACILITY GRANTS
DOMESTIC DEVELOPMENT: NEW CAPACITY Expand AFID Incentive Program ($2 million) Remains Focused on Opportunities for New Investments, Jobs, VA Grown Purchases; ROI Driven Existing Needs Warrant Increased Funding Level, Staff More Than 50 Projects, $750 m Cap Ex Investments, 2, 600 Jobs; $4. 8 AFID “Commitments” Build AFID Office Infrastructure ($400, 000) Currently, Two Project Managers Covering Entire State, One Compliance Position 2 New Project Managers: Assist Project Recruitment, Implementation, Research, Verification
DOMESTIC DEVELOPMENT: NEW CAPACITY Virginia Farmers Development Program ($750, 000 House; $375, 000 Senate) Provides Micro Grants ($5 k Max) to Farmers, Small Agribusiness to Add Value, Growth Opportunities Focus on Business Strategy, Marketing, Administration Help Broaden Customer Base Locally, Domestically, Internationally? 2 FTEs to Administer, Work Directly w/Stakeholders
IMPORTANCE OF AG, FORESTRY EXPORTS Globalized Economy = Jobs, Opportunities Here Exports Now Generate Nearly 30% of Annual Farm, Forest Cash Receipts Every $1. 00 From Exports Returns ~$1. 30 to In. State Support Activities: Processing, Packaging, Financing, Shipping, Storing, etc. Export Related Jobs Pay ≥ 15% Than Other Jobs >90% of World’s Customers Outside of U. S.
GROWING EXPORT MARKETS Launch VA Ag/Forestry Export Initiative in 2010 New State Funds for Trade Reps in Key Markets >$5 m in International Marketing Since ’ 10 New Marketing Offices: China, India, UK, Russia, Mexico, Costa Rica, Canada; Support Existing HK Post Resources for Governor, Secretariat Trade Missions New Resources for VDACS Trade/Reverse Missions Fill Gaps Where Governor, Secretary Can’t Visit Reverse Missions: “Invaluable” For Producers, Exporters
GROWING EXPORT MARKETS More Than $800 m in VA Facilitated Export Deals Since Initiative Launched in 2010 Solid Growth in Strategic Focus Regions China: >125%; India: >90%; Mexico, Latin America: >250%; EU, CH, Russia: >100%; Canada: >25% Governor Goal: “Make VA the East Coast Leader” Moved from #5 to #2 Since 2010; GA is #1 2014: New Record of $3. 35 Billion in Exports 49% Increase in Ag, Forestry Exports Value From $2. 24 b in 2010 to $3. 35 b in 2014
GROWING EXPORT MARKETS Battling Artificial International Trade Barriers China: Hardwood Logs, Poultry* Oman & Kuwait: Poultry India: Lumber, Leaf Tobacco Morocco: Soybean Oil Advocating Fair/Open Trade Practices TPP; Transatlantic Trade & Investment Partnership Facilitate New Export Opportunities Expand Existing Markets, Target Growth Regions: SE Asia; Mediterranean/Middle East; Cuba
VIRGINIA’S TOP A/F EXPORT MARKETS China, $691 m Canada, $279 m Switzerland, $174 m Mexico, $150 m Russia, $123 m Japan, $114 m United Kingdom, $110 m Venezuela, $103 m Morocco, $98 m Indonesia, $94 m Vietnam, $88 m Tunisia, $84 m Saudi Arabia, $83 m Taiwan, $80 m Dom. Rep. , $67 m Turkey, $58 m Hong Kong, $52 m Netherlands, $47 m Thailand, $46 m Jamaica, $45 m
VIRGINIA’S TOP A/F EXPORTS Soybeans, $794 m Wood, $326 m Soy Meal, $305 m Pork, $258 m Leaf Tobacco, $204 m Poultry, $195 m Processed Food & Beverages, $169 m Soy Oil, $150 m Corn, $146 m Wheat, $123 m Animal Feed, $118 m Wood Fuel, $114 m Seafood, $35 m Raw Peanuts, $30 m Cotton, $24 m Animal Fats, $22 m
SECRETARIAT 2016 & BEYOND EMPHASIS Meet Governor’s East Coast Capital for Ag, Forestry Exports Goal; Build “New VA Economy” Facilitate New Export Opportunities Move from “Building to Utilizing” Global Network Add to Existing Infrastructure Trade Missions, Reverse Trade Missions Promote Domestic Development = New Capacity Increase Port Utilization, Development Efforts
GROWING EXPORT MARKETS Expand International Footprint ($300, 000) S. E. Asia: Vietnam, Indonesia, Malaysia, Philippines, Thailand Growing Region: $305 m in ‘ 14, >15% Increase from ‘ 12 Containerized Grains, Soy; Lumber, Logs, Peanuts, etc. Middle East/N. Africa: UAE, Oman, Saudi Arabia, Kuwait, Qatar, Morocco, Egypt Greatest Growth Potential; $340 m, 30% Increase from ’ 13 Soy Oil, Soybeans, Corn, Other Grains, Poultry
GROWING EXPORT MARKETS International Marketing Oversight ($500, 000 House; $0 Senate) 2 New VA-Based FTEs: Provides Strategic, Managerial Direction to Global Network of Trade Representatives Allows Trade Reps to Focus More on Generating New Leads, Deals International Marketing Enhancement ($300, 000) Provides Support for Reverse Trade Missions Growing Importance w/in Export Initiative
2016 TRADE MISSIONS Gubernatorial Missions Europe – UK, France, Germany, Belgium, Netherlands, Others? Asia – China, Japan, South Korea, Others? Middle East – Israel, Others? Latin America – Cuba, Colombia, Others? Canada Secretariat, VDACS Lead Missions Canada, United Kingdom, Ireland, Sweden, China, Hong Kong, Indonesia, Thailand, Vietnam, Mexico, Cuba, U. A. E. , Others? Reverse Trade Missions Delegations from India, EU, Indonesia, Thailand, Others?
PORT UTILIZATION, DEVELOPMENT Partner w/Transportation Secretary, VPA to Promote “State’s Top Asset” Here, Abroad Support Existing Agribusiness Growth Efforts Recruit New A/F Businesses, Related Industries Turn Non, Under-Utilized Port Terminals, Facilities into Working Assets New Investments in Working Assets VA, Agri-biz, Railroads, Related Support Companies
CONCLUSION Infrastructure for Continued Growth, Successes In Place for Virginia Agriculture, Forestry Sectors: Top Quality Producers, Products, A/F Businesses Ag, Forestry Industries Integrated into VA’s Overall Economic Development, Strategic Planning Governor Fully Committed to Building on Existing Network, Successes of Previous Administration Key Components of “New Virginia Economy”
CONCLUSION Infrastructure for Continued Growth, Successes In Place for Virginia Agriculture, Forestry Sectors: Global Demand for Food, Fiber Increasing Trade Office Network World-Class Port System; Potentially Expanding? Governor’s AFID Fund Building Capacity Commitment to New Production, Sustainability Virginia “Best for Business” Rankings, Reputation
CONCLUSION Questions? TODD P. HAYMORE SECRETARY OF AGRICULTURE & FORESTRY TODD. HAYMORE@GOVERNOR. VIRGINIA. GOV @VAAGFORESTRY (804) 692 -2511
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