CRS Report: -

The public agricultural research, education, and extension system is comprised of a nationwide network of federal and state agricultural research laboratories and departments, land grant Colleges of Agriculture, colleges of forestry and veterinary medicine, and the nationwide Cooperative Extension System.

Although the basic authority to conduct agricultural research and extension programs is permanent, Congress since 1977 has provided funding authority and policy guidance for USDA's in-house research programs, and for federal support for cooperative research, higher education, and extension programs in the states, through a title contained in omnibus farm legislation. The most recent omnibus act is the 1996 farm bill (P.L. 104-127).

Despite the inclusion of a research title in the 1996 Act, the House and Senate Agriculture Committees considered more extensive research and extension policy reforms in 1997.

Both the Agricultural Research, Extension, and Education Reauthorization Act (H.R. 2534) and the Agricultural Research, Extension, and Education Reform Act of 1997 (S. 1150) contained measures (1) making recipients of federal research and extension funds more accountable for the relevance and merit of the programs the funds support, and (2) authorizing research initiatives in a variety of high priority areas. S. 1150 contained a controversial provision to pay for the new research initiatives (along with some child nutrition program expansions) with mandatory funds saved by reducing federal funding for food stamp program administrative costs.

A conference committee reached an agreement reconciling the two bills on March 24 (H.Rept. 105-492). Using $1.9 billion in savings from changes to the food stamp program and from other sources, the conference report provides: (1) $600 million over 5 years for an Initiative for Future Agriculture and Food Systems, a competitive grants program in the areas of plant and animal genetics, food safety, alternative uses for agricultural commodities, precision agriculture and biotechnology; and (2) $100 million in new funding for the Fund for Rural America. It also spends $818 million on the food stamp program to restore benefits to certain classes of immigrants, and $485 million to partially fund federal crop insurance. The full Senate passed the conference report on May 12 and the House passed it on June 4. The President signed it June 23 (P.L. 105-185).

On October 21, 1998, the President signed an omnibus FY1999 appropriations bill that contains funding for USDA's research and education agencies and programs (P.L. 105-277). The section pertaining to agricultural research is identical to that found in the vetoed conference agreement on H.R. 4101, the FY1999 agricultural appropriations measure, except that it contains an additional $7 million for food safety research. P.L. 105-277 provides $1.930 billion overall for research and education. In a reversal of the newly passed research reauthorization act, P.L. 105-277 prohibits the allocation of $120 million for the first year of the Initiative for Future Agriculture and Food Systems and withholds the $60 million that P.L. 105-185 authorized for the Fund for Rural America for FY1999.

MOST RECENT DEVELOPMENTS

On October 21 1998, the President signed P.L. 105-277, an omnibus appropriations measure containing funding for several government agencies including USDA. The act contains $1.930 billion for USDA's research, education, and economics agencies. This amount is $7 million above that contained in the vetoed conference agreement on H.R. 4101, the agricultural appropriations measure. The additional funds are designated for research related to the President's Food Safety Initiative. With this exception, the provisions related to agriculture research, education, and economics programs in P.L. 105-277 are identical to the conference agreement on H.R. 4101.

BACKGROUND AND ANALYSIS

When President Lincoln established the U.S. Department of Agriculture (USDA) in 1862, agricultural research was designated as one of the Department's major functions. Also in 1862, Congress passed the first Morrill Act, establishing a college of agriculture in each state (funded by the sale of public land that the federal government granted to each state). Congress directed the new schools to educate the rural population in skills that would help them improve their living standards. In 1887, Congress passed the Hatch Act, making annual grants to states for state agricultural experiment stations (SAES). In turn, SAES research was to support the teaching programs at the agricultural colleges. In 1890, the second Morrill Act brought about the establishment of 17 historically black land grant colleges. In 1914, Congress added the extension function to the research and education components, creating the Cooperative Extension System (CES) to facilitate the flow of the colleges' research and teaching programs to clienteles that could benefit from them. In 1994, Congress extended land grant status to 29 tribally owned colleges (P.L. 103-382) and authorized the establishment of a Native American Institutions Endowment Fund to support the enhancement of educational opportunities for Native Americans through these schools.

Significant growth in research by private agribusiness began with the post World War II boom in the development of new farm machinery. Private corporations' expenditures for agricultural research in support of their businesses have exceeded public investment for many years, but the relative shares have remained quite stable at about 43% public, 57% private, according to the National Research Council. Private investment focuses primarily on applied research on marketable products--e.g., agricultural chemicals, improved plant varieties, veterinary medicines, etc. Public investment encompasses similar applied research, but also includes research in support of USDA's regulatory mission areas, such as meat and poultry inspection and foreign pest and disease exclusion, and basic research on fundamental science.

Current Laws Authorizing Research, Education, and Extension

In addition to the early acts that established the structure of the public agricultural research, education, and extension system, Congress passed several other laws expanding and redefining the mission of agricultural research in subsequent years. In 1977, many of these separate authorities were amended by one overarching statute -- the National Agricultural Research, Extension, and Teaching Policy Act of 1977, which was Title XIV of omnibus farm program legislation, the Food and Agriculture Act of 1977 (P.L. 95-113).

The 1977 act was the first comprehensive reform of federal agricultural research, extension, and education policies in the system's history. Its direction has remained essentially unchanged for 20 years: subsequent omnibus farm acts in 1981, 1985, and 1990 made relatively minor changes to the 1977 research title and related statutes. During that same period, budget constraints at the federal and state level, and changes in science and in public demands for benefits from science began to pose new challenges for the federal-state research, education and extension system. In light of this, the bipartisan leadership of the House Agriculture Committee expressed an interest in undertaking a more comprehensive review of the farm bill's research title when the debate began on renewing omnibus farm legislation in 1995.

When the omnibus farm bill came to conference in the spring of 1996, the Senate version contained some changes to the primary research authorizing statutes and included several provisions reflecting policy changes that had been proposed by the Administration. The House conference document essentially reauthorized the 1990 farm law research title (P.L. 101-624), but only through FY1997, in order to maintain the impetus for the comprehensive review it still intended to pursue. In conference, the House receded to most of the Senate's research title provisions, but Senate conferees agreed to permit most of the provisions to expire at the end of FY1997 unless superseded by new law.

Provisions of the 1996 Farm Act. Title VIII of the Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127) provided a two-part funding authorization for research and extension: all major programs were reauthorized for funding in accordance with the act's language through FY1997; in FY1998-2002, the Secretary was authorized to conduct research, education, and extension activities consistent with annual appropriations acts, under generic funding authority. This funding authority has been superseded by P.L. 105-185, the Agricultural Research, Extension, and Education Reform Act of 1998, which was enacted on June 23, 1998.

The 1996 farm act also established (and authorizes through FY2002) a new, 30-member National Agricultural Research, Extension, Education and Economics Advisory Board to replace the Joint Council on Food and Agricultural Sciences, the National Agricultural Research and Extension Users Advisory Board (both established in the 1977 act) and the Agricultural Science and Technology Review Board (established in the 1990 farm law). The Administration proposed this measure in 1995, stating that the boards' effectiveness had waned and that they had not had adequate funds to fulfill their mandates. Several other advisory boards pertaining to specific research areas were also terminated.

Title VIII required the new Advisory Board to establish a Strategic Planning Task Force to develop a 10-year plan for the construction, consolidation, modernization and closure of federally supported research facilities. In addition, the Secretary is to institute a merit review process for all proposals for new funding for agricultural research facilities on land-grant campuses. Once the strategic plan is completed, its recommendations are intended to have a major impact on the merit review process for new facilities. The strategic plan was due in August 1998, but has not yet been released.

Another major duty of the new Advisory Board is to evaluate the effectiveness of research and extension programs with respect to the policies and priorities that the Board establishes. To help this effort, the act requires USDA to develop a research tracking system that improves upon or replaces the Current Research Information System (CRIS). CRIS was developed in the 1960s as a research project inventory. The new system will be designed to be a management information system to track expenditures, evaluate research outcomes, or assist the strategic planning and priority setting process.

Among other provisions, Title VIII also authorizes grants to public high schools, 2-year community colleges and junior colleges for agricultural science and business education; and $20 million for education grants to Hispanic-serving institutions.

The rural development title of the 1996 farm act, Title VII, also contains two provisions relating to agricultural research. The first represents a significant departure from past funding policies for agricultural research, which has always been part of USDA's discretionary funding budget. For the first time, mandatory funding is authorized for competitive agricultural research grants for certain purposes. Section 793 of the rural development title calls for $300 million to be transferred in the period between January 1, 1997, and FY2000 from the U.S. Treasury into a "Fund for Rural America." Based on a 1995 draft proposal of Senator Lugar's, the rationale for the Fund is that if producers are gradually receiving less federal support under the new commodity policies of the 1996 farm law, then they should be assisted with a steady flow of new technologies to improve productivity and profitability.

The law states that one-third of the annual allocation is to be used specifically for research to address a wide range of subjects with potential benefits for farm and rural communities (administered by CSREES); another third is for rural development projects (administered under USDA's rural development mission area); the Secretary has the authority to apportion the remaining third between research and rural development.

The FY1997 supplemental appropriations bill that President Clinton signed on June 12, 1997 (P.L. 105-18) reduced the initial transfer of Treasury funds into the Fund by $20 million (leaving a total of $80 million). The reduction was shared equally by both the rural development and research parts of the program, leaving $36.1 million available for research grants in the first funding cycle.

The new research reauthorization bill, P.L. 105-185, extends the program through FY2003 and authorizes an additional $100 million for the Fund for Rural America from projected savings in administrative costs under the food stamp program. The conference report on P.L. 105-185 (H.Rept. 105-492) directs that the $300 million total be allocated to USDA over 5 years in $60 million annual increments rather than the $100 million annual increments stipulated in the 1996 farm act. However, the omnibus appropriations act for FY1999 (P.L. 105-277) prohibits the FY1999 allocation of $60 million to the Fund.

The second research-related provision of Title VII reauthorizes the Alternative Agricultural Research and Commercialization Corporation (AARC). Congress established the AARCC in the 1990 farm law (P.L. 98-624) to help business overcome the financial risks of commercializing new nonfood products -- developed through research -- from agricultural commodities. Through a competitive peer review process, the Corporation selects commercialization projects, forms cooperative partnerships with the businesses involved and provides various types of bridge funding (with a 1:1 matching requirement). Part of the returns from the marketplace on the new product go to repay the bridge loan and replenish the Corporation's revolving fund. The Corporation is housed administratively in USDA's Rural Business-Cooperative Service, but it reports to the Undersecretary for Research, Education, and Economics as well as to the Undersecretary for Rural Development. Relatedly, the research reauthorization bill, P.L. 105-185, creates a new Office of Energy Policy and New Uses within the Office of the USDA Secretary. Among other responsibilities, the new office is to coordinate pilot projects to bring new "biobased products" to the point of practical commercial use.

The 1996 act authorizes $75 million annually through FY2002 to capitalize the AARC revolving fund. Actual appropriations for the AARC have averaged around $6.3 million since FY1994. The FY1998 appropriations act provides $7 million for the AARC. The Administration's FY1999 budget requests $10 million. The vetoed conference report on the FY1999 agriculture appropriations bill provided $3.5 million for the AARC, so that is the level contained in the omnibus spending act. The Senate funding measure, S. 2159, would have maintained level funding for the AARC's activities; the House-passed version of H.R. 4101 contained no funding for the program.

Structure of the Federal-State Research, Education, and Extension System

USDA's largest in-house research agency, the Agricultural Research Service (ARS), employs about 1,800 scientists at more than 100 federal laboratories in the United States and overseas (the ARS Web page is http://www.ars.usda.gov/). About 30% of ARS's work is done in support of USDA's regulatory agencies, such as the Food Safety and Inspection Service and the Animal and Plant Health Inspection Service. The rest of its mission is to undertake basic and applied research in areas that serve broad, national priorities, such as human nutrition or plant genetics research. The National Agricultural Library was merged with ARS in the 1994 USDA reorganization.

USDA's other in-house research agencies are the National Agricultural Statistics Service (NASS; its Web site is http://www.usda.gov/nass/), the Economic Research Service (ERS; its Web site is http://www.econ.ag.gov/), and the research arm of the Forest Service (although the last is administered under the Natural Resources and Environment mission area of the Department). NASS conducts USDA's program of collecting and publishing current national and state agricultural statistics, and in 1996 assumed responsibility for conducting the Census of Agriculture (formerly done by the Department of Commerce). ERS provides economic and social science analysis on agriculture, food, natural resources, and rural America. The Forest Service allocates about $185 million annually to a research program on forest biology, ecology, and forest products.

The 1994 USDA reorganization merged the former Cooperative State Research Service and the Extension Service into the Cooperative State Research, Education, and Extension Service (CSREES; its Web page is http://www.esusda.gov/). The agency does not conduct in-house research, but instead provides federal funds and planning support to the states for their research and extension programs. CSREES allocates federal support for the state agricultural experiment station and Cooperative Extension Service in each state according to formulas found in the Hatch Act of 1887, as amended, the Smith-Lever Act of 1914, as amended, and the National Agricultural Research, Extension, and Teaching Policy Act of 1977. (These formulas use factors pertaining to farm and rural population.) Under different formulas, CSREES also distributes funds for forestry and veterinary research. In addition, the agency administers competitive grants to the land grant institutions for improving their agricultural curricula and assisting undergraduate and graduate students. Finally, the agency also administers the Special Grants program, the National Research Initiative (NRI) competitive research grant program, the Sustainable Agriculture Research and Education (SARE) program and other smaller research grant programs.

There are roughly 12,000 scientists (all state employees) in the national network of land grant schools and their associated state agricultural experiment stations (SAES). Of the federal dollars going to SAES, CSREES is the source of about 51% (Hatch Act formula funds alone account for about 10%); the remainder comes from other USDA grants and contracts, and from other agencies such as the National Science Foundation, the National Institutes of Health, the Department of Defense, etc., according to the Office of Technology Assessment (OTA). The share that these non-CSREES agencies constitutes of SAES funding is rising. Federal funds generally are considered a critical factor in leveraging state and private funds in support of SAES research.

Another growing source of revenue for some of the land grant agriculture colleges is the sale to private firms of licenses on patented research products. Investment by private corporations and commodity groups in research at the publicly supported colleges of agriculture is currently the fastest growing funding source according to OTA, although it still represents only about 7.2% of total support for SAES research.

The Cooperative Extension System employs approximately 32,000 people (state and county) and involves 2.8 million volunteers in its continuing education programs in all 50 states. About half of CES programs focus on agriculture and natural resources, one-quarter on youth development (including the vocational 4-H program), and the balance on home economics and community resource development work. On average, federal funds account for 30% of CES's funding, state funds for 50%, and county funds for 20%.

Within individual states, the actual percentage that federal funds represent of the total funding for both the SAES and CES ranges widely around the 30% average: in some states federal support may account for only 10% or less of total funding; in others, it may constitute more than 50%. The decisions on how to allocate those federal dollars to specific local SAES and CES programs are made at the state level. As a result, the ability of the Congress and USDA to influence the direction of the research and extension system as a whole is somewhat limited.

(For further details on the structure of the system and a chronology of permanent legislative authorities for research and extension programs, see CRS Report 97-325 ENR, Agricultural Research, Extension, and Economics Programs: A Primer.)

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97032: Agricultural Research, Education, and Extension Issues in the 105th Congress

Jean M. Rawson Environment and Natural Resources Policy Division

97032: Agricultural Research, Education,
and Extension Issues in the 105th Congress

Jean M. Rawson
Environment and Natural Resources Policy Division