Replacing tobacco in the piedmont

Shortly after sunrise, James Roach walks through a warehouse door in Wentworth, N.C., with an armload of vegetables.

He lays bags of freshly picked produce — from staples like spinach to the more exotic like purple peppers — on a table inside and begins affixing bar code stickers as other farmers arrive. Most tote boxes and bags of fresh vegetables. Others bring goat cheese, or beef and pork raised on homemade feed.

Before the sun sets on this Thursday in October, the products from farms in a half-dozen or so counties will be in the kitchens of restaurants and homes in the Piedmont Triad area. Buyers put in their orders on a website where approximately 40 growers posted their latest offerings.

The idea: to connect the small farmer with the buyer who wants locally grown food through an online farmers’ market. The result: Piedmont Local Food, which launched in April.

The venture — which an organizer said “took off like gangbusters” — launched with help from tobacco settlement money. It is one of a myriad of endeavors taking root in the Piedmont of Virginia and North Carolina as the region seeks its financial footing in a post-tobacco economy.

The settlement money is the result of relief sought in court during the 1990s by states reeling from public health costs associated with treating sick smokers.

Roach used to raise tobacco himself. “I saw the tobacco industry going down and figured it might be a good thing to get out of.”

After a stint as a sheet metal machine operator, he now grows vegetables on his farm in Caswell County, N.C. “I’ve done better than I thought I would,” he said.

Just across the state line, the Institute for Advanced Learning and Research stands on a hill in Danville. It was started with tobacco settlement money and designed to be a catalyst for economic and high-tech activity in the post-tobacco Piedmont, centered in the city that was once the nucleus of the area’s tobacco industry.

As they did in Lynchburg in the 19^th and early 20^th centuries, buyers and sellers poured in from farms far and wide for auctions in Danville’s tobacco warehouses.

The auction system is long-gone, a relic of the tobacco industry that once provided ample fuel for the Piedmont region’s economic engine in both North Carolina and Virginia. The area’s economy has faltered, in no small measure due to the tobacco industry’s decline, which dovetailed with downturns in textile and furniture manufacturing.

The one-two-three punch left Piedmont workers, many of whom had little or no post-secondary education, without jobs in an economy that has become increasingly knowledge-driven.

Rockingham County, N.C. had an unemployment rate of 11.4 percent in August. Six months earlier, the rate hit 15.1 percent, according to the state’s Employment Security Commission.

Unemployment in Danville stood at 12.4 percent in August, down slightly from 12.9 percent in February, according to the U.S. Bureau of Labor Statistics.

In comparison, Lynchburg’s August unemployment rate was 8 percent.

The future of once tobacco-dependent and now economically challenged places like southern Campbell County, Danville and Rockingham County might lie in a petri dish. There are thousands of petri dishes and other pieces of research equipment inside the IALR’s gleaming structure of brick, glass and steel.

Researchers at the six-year-old institute explore four areas: polymers, mechanical engineering and robotic systems, high-value horticulture and forestry, and motorsports engineering.

Its sustainable and renewable resources arm targets plant biology in order to create new plants, crops and bio-based products.

If discoveries have commercial applications, the institute will work to make them available to the market. Its creators hope the work will attract companies seeking access to its expertise. IALR also is planning to create a spinoff of its own, a tissue-propagation company in Danville.

IALR partnered with three founding educational institutions: Virginia Tech, Averett University and Danville Community College.

Next door to the institute, a building is going up to house SEnTeC, the research and development center for sustainable energy and technology in Southern Virginia.

Also started with settlement money, it will continue IALR’s work on biomass crops, and help determine the feasibility of building bio-refineries in the area.

The tobacco settlement is the source of a $7.6 million grant to Lynchburg’s Center for Advanced Engineering and Research for creation of a nuclear research facility in Bedford County, part of a $100 million commitment to establish research centers in the tobacco region.

“Big tobacco” made two settlements. The first was with the four states that initially sought relief, while the second, the master settlement agreement, was with the remaining 46 states, including Virginia and North Carolina.

In that agreement, four of the nation’s largest cigarette makers committed to pay approximately $206 billion to the 46 states over the first 25 years. Of that, North Carolina’s share came to about $4.6 billion and Virginia’s to an estimated $4.1 billion, both over 25 years.

Dixie Watts Dalton, an agricultural economist who taught at Virginia Tech for 17 years, has studied the economic impact of tobacco on Southside Virginia for years. She currently is developing an agribusiness program at Southside Virginia Community College.

Dalton’s father raised tobacco until he took the buyout offered in 2004 to end the quota system. She grew tobacco herself to pay her way through college at Virginia Tech, then graduate school.

She said health concerns that led to decreased demand for tobacco, coupled with the removal of the quota system, have had a domino effect. Any number of local businesses, such as auction warehouses and banks, were dependant on tobacco.

“This is one of the most far-reaching policy changes we’ve seen since the Depression,” she said.

The agricultural economy that relied on tobacco has entered an adjustment period as it seeks a new equilibrium between supply and demand, Dalton said.

Piedmont-area leaders and residents are adjusting, too, looking for new economic endeavors and funding to support them.

Piedmont Local Food, for example, received $44,500 from the North Carolina Tobacco Trust Fund, and another $30,000 from tobacco settlement money earmarked for cost-share grants to farmers and collaborative projects through an organization called RAFI-USA.

North Carolina uses 25 percent of its tobacco settlement allotment to promote health, another 25 percent to help tobacco growers, and the remaining 50 percent to help spur economic development through its Golden LEAF Foundation. So far, Golden LEAF has funded 971 grants totaling more than $459 million.

In Virginia, the state Tobacco Indemnification and Community Revitalization Commission has made more than 1,200 grants for a total of more than $650 million over the past decade or so. That money is credited with creating more than 6,200 jobs in Southside and Southwest Virginia.

The goal is to reduce dependence on tobacco and to help create a 21st-century economy, says Timothy Pfohl, the commission’s grants program director.

“Our mission is to diversify the economic base,” Pfohl says.

Other projects resulting from tobacco commission funding in Virginia include:

-- More than $120 million to extend broadband into unserved or underserved areas;

-- Creation of the King School of Medicine on the border of Southwest Virginia and Tennessee, a $25 million venture;

-- Encouraging cultural and heritage tourism through such things as the Crooked Road Music Trail that winds through the tobacco region.

Dalton, the agricultural economist, says even if efforts to find a new use for tobacco were to succeed, they likely wouldn’t require acreage on a level anywhere near that needed for smoking and related tobacco products.

In the meantime, many farmers who once raised tobacco and still want to work the land have increased acreage for cattle, fruits and other crops, Dalton said. Others hope to cash in on America’s growing ardor for wine.

Seeds of change in the post-tobacco-settlement Piedmont have yet to fully flower, Dalton said. She sees “no one thing that could just come in and fill that gap that tobacco left.”

Scott Shoular, the now-retired Rockingham County director of Cooperative Extension Services, agrees.

For now, Shoular said, “If you ride around Piedmont North Carolina and, I think, Virginia, you’ll find a lot of houses planted on that land.”