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Agricultural Research, Education, and Extension
Issues CONTENTS FOR THIS SECTION Reform Proposals in Research Reauthorizing Legislation Funding Issues When adjusted for inflation, federal funding for agricultural research, education, and extension has remained essentially flat for more than two decades. Research spending represents between 2% to 4% of the total USDA budget. It represents slightly more than 2% of the $74 billion that the government spent in FY1997 for all research and development (R&D), according to the National Science Foundation (NSF). Table 1. Appropriations
for the USDA Research, Education and Economics Agencies (budget authority, in millions of current dollars)
Source: The Budget of the U.S. Government, FY1996-98. For FY1995-1997, figures for ARS and the research portion of CSREES reflect combined appropriations for research and buildings and facilities. In FY1998, only ARS construction projects are funded; P.L. 105-86 does not contain funding for construction projects at land grant colleges of agriculture. The level of funding for all USDA research, education, and extension programs is an important underlying issue whenever Congress debates federal agricultural research and extension policies. Many members of the research community argue that federal support for research and extension should be increased substantially. In support of this position they state that R&D (in all areas) is critical to U.S. economic development and to remaining competitive in international markets (a widely accepted statement). Secondly, they cite studies done periodically over the last several decades that suggest that the rate of return to farmers and consumers from federal investment in agricultural research is consistently high. These observers argue that decreasing or simply maintaining current levels of research spending will harm the food and fiber sector's well-being and the nation's competitiveness over time. Many policymakers agree with these arguments, but question whether the responsibility for maintaining the current level of funding, or increasing funding, should rest primarily with the federal government. They maintain that state legislatures, local governments, commodity organizations, and private industry are the logical investors for research that brings local benefits and competitive advantages to producers and agribusinesses. (For further information on FY1998 agriculture appropriations, see CRS Report 98-201 ENR, Appropriations for FY1999: U.S. Department of Agriculture.) Funding Mechanisms The amount of federal money for agricultural research that scientists in a variety of research venues have access to is related to the four different types of mechanisms that are used to distribute the funds: (1) direct funding to USDA research agencies; (2) block grants to the states, allocated by formulas found in various acts; (3) grants awarded through a competitive, peer-review process; and (4) grants specified in annual appropriations acts (Special Grants). If these different mechanisms were viewed as an investment portfolio, the Department's largest investment -- 51% of its portfolio -- would be in direct funding to its in-house research agencies (ARS, ERS, and NASS). Block grants (formula funds) to the states for agricultural, veterinary, and forestry research, research and extension at the 1890 Colleges, and for the core Cooperative Extension Service programs, would account for 30% of the portfolio. Grants awarded competitively through a peer-review process (primarily the NRI, but also some smaller individual programs) would account for 12% of the portfolio. Special Grants, in addition to congressionally designated grants for construction projects at land grant universities and for specific extension projects, would account for 7% of the portfolio. Direct Funding. USDA's level of investment in direct funding for in-house research conducted by the Agricultural Research Service differs from that of other federal agencies that support research. For example, the National Institutes of Health and the National Science Foundation allocate more than 80% of their research funds through competitive grants to external research laboratories. Twenty percent or less supports research at their in-house laboratories. Formula Funds. The states use formula funds as a steady foundation of support for their core research and extension programs. There is widespread support for formula funding among administrators of land grant agricultural colleges, who maintain that the stability of this funding mechanism has allowed for a wide variety of research and extension programs to be supported and has promoted the long-term success of both. The formulas are partly based upon each state's rural and farm population relative to the total U.S. rural and farm population. Some critics have argued that the formulas' use of rural and farm population factors is no longer the most accurate approach to allocating funds to all areas having research needs and should be abandoned or changed altogether. Some have proposed that factors related to poverty, rural development, land use, or value of agricultural production be considered. The shifts in allocations resulting from using different approaches could profoundly affect which institutions would receive federal money. There has been continued interest in exploring these alternatives, but they have never met with sufficient political support to become law. In its FY1999 budget request the Administration proposed reductions -- for the first time in many years -- in formula funds for agricultural and forestry research at the state agricultural experiment stations and for extension. Neither chamber adopted this proposal in its respective agricultural appropriations measure, and the final omnibus FY1999 spending bill actually provides a greater increase for the formula-funded programs than those contained in either the House- or Senate-passed appropriations bills (with the exception of formula funds for extension programs, where the conferees agreed with a 3% increase provided in S. 2159). Competitive Grants. Congress significantly expanded the portion of the research portfolio devoted to competitive grants in the 1990 farm act, largely in response to a National Research Council (NRC) report entitled "Investing in Research." The NRC argued that the existing competitive grants program, which was begun in 1978 and was funded at $40 million in FY1990, was too small to support grants of sufficient size and duration "to meet the demands of high-quality science." The 1990 act named the expanded program the National Research Initiative (NRI) and increased the funding authorization gradually over the FY1990-1995 period to $500 million, the level that the NRC recommended. The research title of the 1996 farm act reauthorized the program at $500 million annually through FY1997. Actual appropriations since FY1991 have not reached the authorized levels. The FY1998 appropriation was $97.2 million. The Administration requested $130 million for FY1999; the enacted omnibus spending act provides $119.3 million. At a hearing in preparation for the farm bill debate in 1995, National Research Council officials reiterated that organization's support for full funding of the NRI competitive grants program at its authorized $500 million level. The NRC argues that constrained funding has kept the program from fulfilling the role for which it was intended when Congress expanded it in 1990. Competitive grants are the means that the scientific community largely uses for awarding research grants. The NRC recommends that up to 35% of USDA's total research portfolio be awarded competitively. Currently, even though the appropriations for the NRI program are more than twice the funding of the original competitive grants program, it accounts for less than 10% of USDA's research budget. Some producer groups, as well as some Members of Congress, are concerned about expanding the role of competitive grants in agriculture. They maintain that competitive grants tend to flow toward the larger and richer schools (these include some non-land grant universities) and that the land grant schools in some smaller states are falling behind in being able to compete for the grants and obtain matching funds. Non -USDA Agricultural Research Competitive Grants. About a dozen other federal agencies award competitive grants to the state agricultural experiment stations for research on agriculture-related subjects. The chief ones are the National Institutes for Health, the National Science Foundation, and the Agency for International Development. The Department of Health and Human Services, the U.S. Public Health Service, and the Departments of Defense and Energy are also major sources of competitive research funds. Congress appropriated $40 million to the National Science Foundation (NSF) in FY1998 for the Plant Genome Initiative, a competitive grants program for basic research on the genetics of food crops. For FY1999, the conference report on H.R. 4194 (P.L. 105-276), making appropriations to NSF and other agencies, contains $50 million for plant genome research. Special Grants. Congress established the Special Research Grants program in 1965 as a general authority for agricultural research grants that would be open to both public and private researchers. This is the authority that Congress uses to earmark money for specific projects at specified institutions. A provision in the 1990 farm bill split the program into two categories. Some grants are now "restricted," -- i.e., they are not peer-reviewed and they go only to land grant schools -- and others are "unrestricted" grants that are awarded competitively to a broad spectrum of public and private researchers. The Administration's budget requests for the past several years have called for the elimination of all "restricted" special grants. The FY1998 appropriations act provided $51.5 million for special research grants. The Administration's budget request for FY1999 contained $12.6 million for special grants. H.R. 4101 would have allocated $49.3 million for special grants; S. 2159 would have provided $49 million. The conference agreement on H.R. 4101, which became part of the FY1999 omnibus spending measure, provides $63.1 million for this program. The practice of designating federal money to support specific, noncompetitive research projects is controversial. Supporters acknowledge that there is political pressure on legislators to steer federal dollars to their districts, but they argue that the practice supports necessary research into production problems of local economic importance. Critics argue that most states' research appropriations exceed by more than two to one the matching federal formula funds and that locally important research is already well supported. They maintain that federal appropriations should go to support national research priorities. Some supporters of special grants also state that they are a way to support the research capabilities of smaller land grant institutions that are not as able to compete successfully for NRI grants. They argue that these schools perform research that directly benefits agriculture, but simply lack the clout to win competitive grants. Opponents of earmarked grants state that, in a time of major budget cuts, the competitive grant approach is the best way to achieve the rate of research progress that technological innovation is dependent upon, and that by diverting scarce federal dollars to non-reviewed research the nation is undercutting its future agricultural productivity and competitiveness. In the Agricultural Research, Extension and Education Reform Act of 1998 Congress authorized a peer review process for special research grants as well as a merit review process for extension and education grants. Concerning the issue of earmarked grants for construction of new research facilities on land grant college campuses, the 1996 farm law requires the development of a long-term strategic plan for all federally supported facilities and requires new construction projects to undergo a merit review process. Relatedly, in the conference report to accompany the FY1996 USDA appropriations bill (H.Rept. 104-268), Congress resolved to terminate the construction program after FY1997. In keeping with that, the FY1998 agricultural appropriations act contained no money for construction projects at land grant colleges of agriculture, and the Administration did not request any such funds for FY1999. The conference report on the FY1999 agriculture funding bill (enacted as part of P.L. 105-277, the omnibus spending measure) does not contain any money for construction. Such projects are likely to resume eventually under the new merit review process, especially after the 10-year strategic plan is completed. Senator McCain introduced legislation in the 105th Congress that addressed this issue further. S. 199 would have required private industry to share the cost of constructing any new facility whose research would be of direct benefit to that industry. The bill was referred to the Committee on Governmental Affairs, but no further action was taken on it. Extension Service Issues Of all the components of the national agricultural research, education, and extension network, the Cooperative Extension System (CES) has probably felt the greatest impact of the dramatic decline in the number of farms and rural farm population, and the rapid urbanization of many once rural counties. It has significant responsibilities for providing horticultural, nutrition, family life, and environmental information to a wide spectrum of audiences beyond its traditional family farm constituency. Congress also has made changes in Extension's mission by adding new program responsibilities in various authorizing and appropriations acts. The System has come under regular criticism for neglecting its agricultural roots and for trying to be all things to all people. State budget pressures have resulted in smaller state appropriations for Extension at the same time that the system has been trying to respond to expanding demands. The members of the House and Senate Agriculture Committees discussed these criticisms and pressures during the hearings, but the Agricultural Research, Extension, and Education Reform Act of 1998 did not contain any major changes affecting the role and mission of the CES. Reform Proposals in Research Reauthorizing Legislation In preparation for considering legislation to reauthorize agricultural research, education, and extension programs, both the House and Senate Agriculture Committees held a series of hearings in spring and early summer of 1997. In addition, each Committee distributed questionnaires on a full range of research related subjects to partners and stakeholders in the system and compiled the answers in committee prints (unnumbered House Agriculture Committee Print, December 1995; S. Prt. 105-28, June 1997; also, see CRS Report 96-221 ENR, Agricultural Research, Education, and Extension: Questionnaire Responses from Partners and Stakeholders.) House Proposal. On September 25, 1997, the House Agriculture Subcommittee on Forestry, Resource Conservation, and Research marked up and reported out the Agricultural Research, Extension, and Education Reauthorization Act of 1997 (H.R. 2534). Subsequently, the full House Agriculture Committee on October 29 reported out an amended version of the earlier bill. The full House approved the measure on November 8, 1997. The bill would have reauthorized funding through FY2002 for the programs previously provided for under the 1996 farm act. It also would have authorized competitive research grant programs in several additional areas, including value-added products, forestry, precision agriculture, organic agriculture, joint U.S.-Mexico research, new bio-based industrial products, and crop diversification, among others. A prominent feature of the bill was wide-ranging provisions requiring the recipients of federal research and extension funds to demonstrate the relevance of the programs supported by federal dollars as a condition for receiving them (by submitting annual plans of work), and to institute peer- or merit-review procedures across the board, including peer review of ARS research projects. These provisions also would apply, with some modifications, to the 1890 Colleges and the 1994 tribally-controlled institutions. H.R. 2534 would have made uniform the matching requirements for states for formula funds they receive under the Hatch Act of 1887 and the Smith-Lever Act. The primary effect of this provision would be to remove the $90,000 exemption from the matching requirement that each state currently has under the Hatch Act formula. The bill also would have phased in a matching requirement for federal formula funds going to the 1890 Colleges, starting at 30% in FY 2000 and rising to 45%in FY2001 and to 50% in FY2002 and thereafter. A provision in the earlier subcommittee-passed bill to allow states to transfer a portion of their research and extension formula funds between programs, was not included in the bill that the full Committee approved. USDA had reported being in favor of this provision. As passed by the full House, H.R. 2534 did not contain any provision analogous to the Initiative for Future Agriculture and Food Systems that Senate Agriculture Committee proposes as a mandatory research program (see next section). Senate Proposal. On October 29, the Senate amended and passed S. 1150, the Research, Education, and Extension Reform Act of 1997 (S.Rept. 105-73). Its most significant feature was a measure to provide $780 million over 5 years in new mandatory funding for high priority research projects by redirecting savings from reductions in Food stamp administrative costs. The measure would have created a competitive research grant program called the Initiative for Future Agriculture and Food Systems that would be targeted to research on the genetics of food crops and livestock (generally referred to as food genome research), food safety, human nutrition, alternative uses for agricultural commodities, biotechnology, and site-specific farming using satellite technology (commonly referred to as precision agriculture). The Senate bill also would have extended the authority for a $100 million annual U.S. Treasury transfer to the Fund for Rural America through FY2002. The measure would have divided the funds to provide annually $50 million for rural development projects, $33 million for research and $17 million for the Secretary to apportion to either program area. The remaining provisions of the Senate bill expanded upon reforms related to collaboration and accountability that were introduced in the 1996 farm law. Among other provisions, the proposal would have required that: (1) federal funds for regional research be targeted to multidisciplinary projects; (2) states spend a percentage of their Smith-Lever formula funds for Extension on multistate projects; (3) states increase the number of formula-funded projects that integrate research and extension; (4) all federally funded research, extension and education projects be peer reviewed or merit reviewed; and (5) all colleges and universities be permitted to compete for competitively awarded Extension funding. The primary provision of the Senate floor amendment to S. 1150 would have made USDA the lead agency for commercial aquaculture research and development. Conference Report. At the end of the first session, a conference on the two measures was postponed after difficulties arose over the major difference between the House and Senate research reauthorization measures, namely, the mandatory Initiative for Future Agriculture and Food Systems in S. 1150 that was to be funded by savings from a provision that reduced federal spending for food stamp program administrative costs. Key Members of the House were opposed to using food stamp program administrative funds for purposes not related to the food stamp program itself, or to providing mandatory funding for agricultural research when all other federal research programs operate with discretionary funds. On February 24, 1998, the House adopted H.Res. 365, which substituted the language of H.R. 2534 for the text of S. 1150. This procedure permitted a conference committee to be named. The conferees unanimously agreed to a compromise bill on March 24 (the conference report was filed on April 22; H.Rept. 105-492). The Senate passed the conference report on S. 1150 on May 12 by a vote of 92-8 after first defeating (23-77) a motion introduced by Senator Gramm that would have recommitted the bill to conference. Senator Gramm objected to the provision to restore food stamp benefits to legal aliens. On May 22 the House debated a rule that would have stripped the food stamp provisions from the bill; the measure failed by a vote of 120 to 289. On June 4, the full House passed the conference report by a vote of 364-50. The President signed the bill into law on June 23 (P.L. 105-185). The Agricultural Research, Extension, and Education Reform Act of 1998 makes food stamp program changes that are estimated to provide some $1.9 billion in savings ($1.7 billion from reductions in administrative cost spending and $200 million from employment and training) over 5 years. These savings would be used to fund several research and non-research activities in the conference agreement. The Initiative for Future Agriculture and Food Systems is funded at $600 million over 5 years (versus the $780 million proposed in the Senate bill); the Fund for Rural America is to receive an additional $100 million and be extended through the FY2003 funding year; $818 million is used to restore food stamp benefits to several classes of legal immigrants whose eligibility was terminated by the 1996 welfare reform law. The conference report also contains a provision to guarantee the availability of federal crop insurance to farmers over the next 5 years by paying for a portion of the program costs with $485 million in food stamp savings and the remainder ($530 million) with savings generated from changes in the crop insurance program itself. Most of the research accountability provisions in the Senate-passed version of S. 1150 were adopted in the conference report, with the exception of the provision to make non-land grant institutions eligible to compete for certain Extension funds. Among other research-related provisions, the conference report includes: (1) a phased-in matching funds requirement for the 1890 land grant schools; (2) a competitive grants program to support collaborative research between U.S. and foreign scientists; (3) authority for U.S.-Mexico joint agricultural research; (4) a competitive grants program to support research on reducing environmental problems from intensive livestock operations; (5) competitive research grants in the area of organic agriculture; (6) expanded authority for forest research, including a program to inventory public and private forest resources; (7) a competitive grants program for precision agriculture (site-specific farming with the assistance of computer and remote-sensing technologies); (8) an initiative to promote the development of new non-traditional crops; and (9) a study by the National Academy of Sciences of the strength and relevancy of ARS research, the appropriateness of the current Hatch and Smith-Lever Act formulas, and the role of competitive grants in agricultural research, extension and education. Under pressure to hold down spending in USDA's discretionary programs, both the House and the Senate took steps in the FY1999 funding bills to withhold expenditure of some of the mandatory funds newly authorized in P.L. 105-185. Both the House-passed H.R. 4101 and S. 2159 prohibited the $60 million allocation to the Fund for Rural America in FY1999. In addition, the House bill prohibited the FY1999 allocation of $120 million to the Initiative for Future Agriculture and Food Systems. This could occur because the administrative costs savings from the food stamp program are savings of appropriated funds, and thus under the control of the Appropriations Committees, even though the program that they came from is mandatory. The conference agreement on H.R. 4101 prohibited the allocations for both the Fund for Rural America and the Initiative, and that language was included in the final omnibus FY1999 appropriations act. LEGISLATION H.R.
2534 (Combest, Dooley, Smith, Stenholm)
H.R.
725 (R. Lewis)/S.
485 (McConnell) S. 1150 (Lugar) The Agricultural Research, Extension, and Education Reform Act of 1997 amends the National Agricultural Research, Extension, and Teaching Policy Act of 1977 and related statutes to provide new mandatory funding for a new competitive research initiative on high priority topics of national importance to agriculture, to improve the collaboration among partners in the public research and extension system, and to increase the accountability of recipients of federal funds for research and extension programs, among other provisions. The Senate Committee on Agriculture, Nutrition, and Forestry reported out the bill without amendments on July 30, 1997. Passed Senate October 29, 1997. A conference committee on S. 1150 and H.R. 2534 agreed to a compromise measure on March 24, 1998. The conference report was filed on April 22 (H.Rept. 105-492). Conference report passed Senate May 12, 1998, by a vote of 92-8 after the Senate first defeated (23-77) a motion to recommit the bill to conference. A rule on the conference report was defeated in the House (120-289) on May 22. The House passed the conference report (364-50) on June 4. The President signed the bill into law on June 23 (P.L. 105-185). S.
199 (McCain) S.
932 (Gramm)
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