Agricultural Research and Productivity: Farm Act Research Programs

Agricultural Research and Productivity Briefing Room Background Sources of Public Sector Agricultural Research Expenditures Farm Act Research Programs

Agriculture depends on scientific advancement to sustain and increase productivity. Research also enhances the ability of USDA agencies to accomplish strategic goals and succeed within their mission areas. Present day decisions about the level and direction of research funding will determine technological opportunities in the future.

Key changes for public agricultural research in the Food, Conservation, and Energy Act of 2008 (2008 Farm Act) include:

• Reorganization of USDA public agricultural research institutions
• Increased emphasis on competitive grants
• Greater equity in funding among Land Grant universities
• Significant increases for research on organic and specialty agriculture

Reorganization of USDA Public Agricultural Research Institutions

The 2008 Farm Act includes provisions to increase the coordination of research programs and activities among different agencies, universities, and other institutions. Coordination of research can reduce duplication of effort and thereby improve the efficiency of agricultural research spending. Coordination can also improve the communication of results so that researchers in related fields have readier access to research findings, increasing the impact of research. Greater coordination can also strengthen the link between research and extension (which disseminates land grant expertise to farmers and consumers), speeding the diffusion of new practices based on scientific research.

Examples of the 2008 Farm Act's provisions to improve coordination include:

• Creation of the National Institute for Agriculture (NIFA), under the leadership of a newly appointed Director, to replace Cooperative Research Education and Extension Service (CSREES), which will be dissolved on October 1, 2009.

• Creation of the Research Extension and Education Office (REEO) to assist the Under Secretary of Research, Education and Extension (REE) with coordination efforts.

• Establishment of criteria for regional centers of excellence.

These provisions build on existing coordination efforts by USDA agencies. The diversity of locations, multidisciplinary topics, and institutional settings in which the USDA funds or carries out research and extension creates the need for coordination. For instance, the Agricultural Research Service (ARS) carries out research in over 100 locations, and CSREES grants are carried out in over 100 Land Grant universities and thousands of county and regional extension offices throughout the United States. Another reason for greater coordination of research is the need to make efficient use of stagnating Federal and State agricultural research budgets. U.S. public sector research experienced 0.2% annual growth from 1995-2005 (see the Amber Waves article, Sources of Public Agricultural R&D Changing (June 2000).

Increased Emphases on Competitive Grants

The 2008 Farm Act also places a strong emphasis on awarding funding competitively. It expands authorizations for competitive grants and creates new competitively awarded research initiatives.

Examples include:

• Authorization of $700 million in competitive grants under the Agriculture and Food Research Initiative.

• Awarding Smith-Lever 3(d) extension funds on a competitive basis, with the exception of the Nutrition Education Program for which funding will be allocated according to formula, rather than using the current formula based largely on States' rural and agricultural populations. (Smith-Lever funds represented $286 million of CSREES's $1,206 million fiscal year 2007 budget.)

• Requiring new research grants under the Specialty Crops Research Initiative (SCRI), Sun Grant Program, and various rural development grants to be awarded on a competitive basis.

The choice between competitive grants (awarded by peer scientists) and formula funds (allotted by research administrators) reflects tradeoffs associated with research resource allocation. Competitive grants allocate research resources toward research proposals on criteria of expected research impact and likelihood of success instead of by a formula. However, some dispute this, noting among other things that competitive grant writing and selection involve significant transaction costs and that recipient institutions of formula funds have internal competitive processes to award funds (see Winners and Losers: Formula versus Competitive Funding of Agricultural Research, in Choices magazine). Also, the chief advantage of competitive grants—i.e. peer scientists steering funds to the most promising research prospects—might be a drawback to the extent that research administrators have broader insights and longer time horizons about society's research needs. Formula funds allow scientists to plan longer term projects, although the Farm Act does include some provisions for competitive grants of longer duration.

Despite the Act's emphasis on competitive grants, experience suggests that increased funding at target authorization levels might not materialize. Since FY 1995, Congress has authorized up to $500 million in research funds for the National Research Initiative (NRI)—the primary vehicle for competitive grants administered by CSREES. However, Congress has never appropriated more than $180 million for the program in any year. Appropriations never approached the targets set in the 1996 Farm Act. Another major competitive grants program authorized in the 2002 Farm Act, the Initiative for Future Agricultural and Food Systems (IFAFS), was funded for only two years before being cancelled entirely.

Mandatory funding is one way to narrow the discrepancy between authorized and appropriated funding levels. Two research initiatives in the 2008 Act have significant levels of mandatory funding: Specialty Crops Research Initiative (SCRI) and the Organic Agriculture Research and Extension Initiative (OAREI). The SCRI has mandatory funding of $230 million for FY 2008-12 along with an additional $100 million of authorized funds per fiscal year. OAREI is mandated to receive a total of $78 million for FY 2009-12 along with an additional $100 million in authorized funding. However, it is worth noting that even so-called "mandatory funding" might not be appropriated: for example, the IFAFS program received little of the funding mandated under the 2002 Farm Act.

Greater Equity in Funding among Land Grant Universities

Changes to educational institutions focus on bringing about greater equity in funding. The Nation's 1890s institutions (also referred to as historically black colleges) will receive an increasing percentage of formula funds. The Farm Act includes provisions for grants to upgrade facilities at minority-serving institutions. Hispanic serving institutions are eligible to compete for more funding, as is the historically-black University of the District of Columbia. In the past, minority-serving institutions have relied more heavily on formula funds than on competitively awarded funds. NIFA funding includes provisions to increase the competitiveness of institutions and researchers who have not fared as well in the past. Nonetheless, if formula funds continue to decline as a source of funding for state-level institutions, the increased proportion of formula funds going to minority-serving institutions may be offset by the shift to competitive grants. Legislation to appropriate funds (as opposed to merely authorizing them) will be key in determining the distribution of resources among institutions.

Significant Increases for Research on Organic and Specialty Agriculture

Organic farming has been one of the fastest growing segments of U.S. agriculture in recent years, and the mandatory funding for SCRI and OAREI complement the expansion of Federal support for specialty crop and organic agriculture in other titles of the Farm Act. Research topics in these initiatives run from genetics and breeding, through the production process, to the safety of fresh produce. In particular, elements of SCRI and OAREI may help to address the decline in plant breeders of specialty crops (see Public Sector Plant Breeding Resources in the U.S.: Study Results for the year 2001). The OAREI includes support for breeding seed varieties that are suitable for use in organic production. The structure of organic farms differs from that of U.S. agriculture as a whole, with fruits, vegetables, and other high-value specialty crops making up a larger proportion of the organic sector. So this initiative also may help reverse losses in specialty crop breeders. But because the range of species that constitute specialty crops is so great and the allocation among priorities is not explicitly stated, the degree to which plant breeding benefits of these initiatives will "spill over" into other areas of agriculture and outcomes such as nutrition and health is unknown. Ultimate impacts will depend on the process by which grants are allocated and awarded, but also on the level of appropriated funds; future Congresses will have discretion to direct both of these research areas through funding decisions.