Key Changes
he 2002 Farm Act replaces specific dollar amounts with "such
sums as are necessary to carry out" agricultural research,
research at State agricultural
experiment stations (SAES), extension education, other
special programs (Food and Nutrition Education Program, etc.),
and competitive grants. The programs are extended to FY 2007.
Highlights include:
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Funding levels for the Initiative
for Future Agriculture and Food Systems (IFAFS) are
raised to $120 million in fiscal year (FY) 2004, $140 million
in FY 2005, $160 million in FY 2006, $200 million in FY
2007, and $200 million in each year thereafter.
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Twenty new High-Priority Research and Extension Initiative
areas are added to the 24 existing areas, including 5 new
areas in natural resources and the environment. A Bovine
Johne's disease control program and a program on Karnal
Bunt research are added.
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Biosecurity, biotechnology risk assessment, and biotechnology
research and development for developing country programs
are added.
Summary of Provisions
Agricultural research is funded by the Federal Government
through a variety of mechanisms. Federal intramural research
is conducted by the Agricultural Research Service (ARS). The
Federal Government helps fund agricultural research at State
agricultural experiment stations through four major mechanisms:
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Formula funds allocated equally to all States by formula;
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Competitive grant funds allocated by panels of relevant
scientific peers after consideration of research proposals
submitted to the review panel;
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Special grants provided to SAES, other public institutions,
and individuals to study problems of concern to USDA, as
specifically designated by Congress; and
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Cooperative agreements between USDA agencies that perform
research and SAES.
While farm acts authorize certain levels of USDA funds to
be used for particular programs, actual expenditures are set
annually by agricultural appropriations acts. In the Research
Title, appropriated amounts have often differed substantially
from those authorized. Several grant programs authorized in
earlier Research Titles were not appropriated the funds that
were expected. In recent years, Congress has also tended to
fund more grants specified by members of Congress than the
broader grant programs requested by the Administration.
Economic Implications
Most studies have been consistent in finding high rates
of return (40 to 60 percent) for public
investment in agricultural research and development (R&D).
These rates emerge regardless of the level of aggregation
(individual commodities or more aggregate measures) or geographical
area considered. Some evidence suggests a higher rate of return
to science-oriented (basic) R&D than to applied R&D.
Calls for changes in the U.S. agricultural research system
date back to influential reports published by the National
Academy of Sciences (in 1972) and the Rockefeller Foundation
(in 1982). These reports recommended shifting to more basic
biological research and shifting from formula funding to competitive
grants. The 1977 Farm Act established a competitive grants
program, which the USDA Competitive Research Grant Office
first began in 1978. The 1990 Farm Act extended competitive
grants with the National Research Initiatives for Food, Agriculture
and Environment (NRI).
Over the last 20 years, the levels of Federal funding (adjusted
for inflation) through formula funds for the States have declined,
and the levels of competitive grant funding have increased.
Competitive grants have tended to go to top-ranked biology
and agricultural science programs, States with large agricultural
sectors, and States with large numbers of agricultural scientists.
However, competitive grants still comprise only 15 percent
of USDA-funded, State-level research. Formula funds, based
on (among other things) the number of farms and percentage
of rural population in a State, continue to be the largest
single Federal source of SAES funding. The focus of SAES research
did not change significantly, in part because other funding
instruments counteracted the influence of competitive grants
towards basic research.
Discrepancies between authorized and appropriated funding
levels for the competitive grants program have been particularly
notable. For example, the 1996 Farm Act authorized $500 million
annually in competitive grants, but in recent years only about
$60 or $70 million in competitive grants through the NRI have
been awarded annually.
Congressional agricultural authorizing committees included
several new competitive grant initiatives starting with the
1996 Farm Act, such as the Fund for Rural America program,
which included competitively awarded research, extension,
and education grants. The 1998 Agricultural Research, Extension,
and Education Reform Act created the Initiative for Future
Agriculture and Food Systems (IFAFS) Program, which set up
competitively awarded research, extension, and education grants
to address critical emerging agricultural issues. Appropriations
committees have sometimes attempted to block these programs,
which effectively halted programs (notably the IFAFS program).
However, in some years, the funds have eventually been released.
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