WATERLICK, VA., AUG. 14 -- The public's growing demand for fresh fish is spawning a new industry that could become a $10 million to $20 million annual business for Virginia farmers, Gov. Gerald L. Baliles said here today.

The business, in which fish such as hybrid rockfish, or striped bass, are grown in cages suspended in farm ponds, is called aquaculture.

Curry Roberts, Virginia's deputy director for economic development, said several East Coast fish wholesalers have told him that "I can sell any amount of hybrid striped bass that I can get my hands on."

Aquaculture is all the more attractive, according to David K. Whitehurst of the state's Division of Game and Inland Fisheries, because "all the equipment and material are already on the normal farm," including the corn and soybean meal that are used as food.

"It's like raising chickens in a pen, except the cage floats in a pond," said T. Robins Buck, chief of marketing and promotion for the state Department of Agriculture.

Baliles, an avid fisherman, learned about aquaculture at a state fish hatchery here today, where fish and game experts told him most farmers with a five-acre pond can get into the business.

Raising fish in cages was one of several schemes that Baliles talked about during the third day of his "work week" tour of the Shenandoah Valley, which is emphasizing development to give it an economy based on more than traditional farming.

At nearby Front Royal, the governor released details of the state's plan to build an inland port terminal in Warren County, about 180 miles from the ports of Hampton Roads.

The $10 million facility, to be built just off I-66, is designed to encourage midwestern truckers to shorten the drive to coastal ports by loading containerized cargo onto railroad cars for shipment at a special low rate to the ports in Norfolk, Portsmouth and Newport News.

Asked if the idea was to woo freight now moving to the port of Baltimore, the chief rival of the Virginia ports, Baliles said, "the name of the game is competition."

Competition is also one of the motivating factors for the state as it conducts aquaculture research.

Many of the fresh fish now sold in city restaurants are "raised young in Arkansas, grown in California and then get a plane ride to New York," said Scott H. Newton, an aquaculture researcher at Virginia State University.

"We don't need those flying fish," said Roberts.

The hybrid best suited for cage farming, according to Newton, results from a breeding of female white bass, a native freshwater fish, and a male rockfish, a traditional saltwater fish that can live in fresh water.

The result of the 15- to-18-month process is "a quality fish, as good as any fillet from snapper or walleye," Newton said.

With rockfish now selling for $3.75 to $4.50 a pound, cage farmers could realize an annual net return on their investments of 7 percent to 18 percent, Baliles said.

Another potential cage product is crayfish, which Newton said are especially popular in the Washington and Baltimore areas.

Baliles said he would propose "several initiatives" aimed at giving information and help to Virginia farmers who want to try aquaculture.

In addition to examining various state industries, the governor has found time on this tour for several civic and political events.

This afternoon he attended a carillon concert marking the 50th anniversary of the Luray Tower and a reception honoring Page County Sheriff Edward M. Sedwick, whose department won a state police award for closing the highest percentage of cases in the state last year, 76 percent compared with the statewide average of 26 percent.

Tonight Baliles attended a picnic fund-raiser at Graves Mountain Lodge in Syria, helping the campaigns of fellow Democrats William Chase Jr., chairman of the Culpeper County Board of Supervisors, who is challenging incumbent state Sen. Kevin G. Miller (R-Harrisonburg), and Henry Lee Carter, who is running for an open seat in the House of Delegates against Republican Page Higginbotham.