Executive Voices: An Op Ed Column

Why Bioscience?
We believe it's the best way to create new markets for agricultural products

By Valeria Lee

The Golden LEAF Foundation, whose assets are proceeds from lawsuits brought against cigarette manufacturers, has launched a bold, comprehensive $85.4 million statewide initiative to get North Carolina’s economy moving and put us on the leading edge of the bioscience industry. In doing so, we have remained totally committed to the foundation’s mission — the long-term economic advancement of our state — and forged creative partnerships in the private sector.

No one should be surprised that good things are happening at Golden LEAF. The foundation’s board, chaired by Lawrence Davenport of Greenville, brings a wealth of talent and experience to the table. During the first two years, board members primarily responded to grant proposals, funding 100 projects totaling $16 million.

Success stories are coming in already:

4,400 acres of an alternative crop, kenaf, planted this year in Greene and neighboring counties to be marketed as automotive and horse bedding products;

Thousands of jobs retained and created through incentives for companies to remain and expand in North Carolina;

Research making it possible for a Triangle corporation, Novovita, and a paper company in Sylva to manufacture a product of recycled paper and other waste products to help farmers grow food crops with fewer chemicals and poultry producers increase their profitability;

An equestrian park in the Southeast, drawing thousands of families to one of the state’s poorest counties and attracting outstanding events;

A viticulture program at Surry Community College, boosting a regional wine industry in the Yadkin Valley;

The Madison County alternative agriculture initiative, helping farmers grow and market niche crops and livestock and learn business skills to increase profitability;

A goat producers cooperative in Franklin County, helping farmers pursue alternative markets.

About a year ago, however, the board saw the economy in a tailspin and concluded that Golden LEAF, if it acted quickly and wisely, could make a significant positive impact on the state’s economic problems. On Oct. 4, 2001, it passed a resolution to consider initiating programs on its own. Months of intense research, planning and debate followed.

All signs pointed to bioscience as the way to create new markets for agricultural products and jobs in research, manufacturing and related businesses. Golden LEAF just might have the resources and the flexibility, as Governor Easley put it, “to provide the jump-start we need to make North Carolina the biomanu-facturing capital of the world.”

By the time legislators, farmers, educators, business and civic leaders, economic development officials, nonprofit administrators and others assembled in Raleigh on Aug. 14 to hear Chairman Davenport announce the foundation’s comprehensive economic stimulus package, we felt that we were in a position to stake that claim.

When the economic package is implemented, it will stimulate at least $350 million in new investments in North Carolina. The centerpiece is a commitment to invest $42 million in bioscience/biotechnology companies. If those investments are successful, we anticipate making additional investments of $108 million over the next six years, bringing Golden LEAF’s total investments in the bioscience sector to $150 million.

Specifically, the foundation has entered into an agreement with the Bio Vista Fund to develop a venture capital fund of $120 million, of which Golden LEAF is investing $30 million. We have invested $10 million in the Aurora Fund, which already has leveraged an additional $47.5 million and expects to close at $75 million in spring 2003. And we have made a $2 million commitment to the Old North State Regional Opportunity Fund of Tryon Capital.

Another initiative in the biotech sector will be a $10 million investment in a proposed biodiesel plant in Eastern North Carolina that will be a boon to soybean farmers and put the state on the cutting edge of the alternative fuels industry. “In these difficult times,” Chairman Davenport said, “each of us in his or her own way must do as much as possible. These initiatives will bear fruit ­— new jobs, new businesses, new technology, new investments and additional tax revenue — for many years. In fact, we expect that these initiatives will result in at least 25,000 new jobs during the next five years.”

The foundation departed temporarily from its policy of making grants only from income from invested funds. The package includes $18.4 million in direct grants funded from principal.

Other portions of the stimulus package:

$10 million for job development, including training primarily through the North Carolina Community College System, research and development, and predevelopment costs associated with industrial relocations and expansions;

$3.4 million for the Rural Center to create a loan loss reserve program to prompt loans to borrowers who might not qualify for traditional loans. Twenty-five banks are participating;

$5 million to help local governments and regional economic development partnerships to finance the certification of industrial sites.

The foundation will still make about $15 million in annual grants this year.

Because Golden LEAF is unique, it can do things that state government and public agencies cannot do and complement the actions that Governor Easley, the General Assembly and the private sector have taken to bolster our state’s economy and ensure North Carolina’s future competitiveness. Working in partnership with a host of public and private groups, the foundation can be an effective vehicle for stimulating the state’s economy as a whole and improving the economic lot of millions of North Carolinians.

Valeria Lee is president of the Golden Leaf Foundation.

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