Presentation to CSREES Listening Session

New Orleans, October 25, 2001 

Good morning, my name is Gene Nelson.  I serve as head of the Department of Agricultural Economics at Texas A&M University, as well as the chair of the board of the Council on Food, Agricultural and Resource Economics (C-FARE).  Thank you for the opportunity to speak to you today regarding the programs in CSREES.

C-FARE is a non-profit, non-partisan organization, and one of our primary goals is to educate policy makers about the actual and potential contributions of applied economics research and education.  We also actively work to represent the applied economics profession in matters of science policy, priority setting, and budget determination at the federal level, and to collaborate with other agricultural sciences and government agencies in these activities.  The Council carries out these activities through the leadership of our governing Board, advisory participation by government agency representatives, and significant involvement from the heads of academic departments of agricultural and applied economics at universities across the country.

The Council on Food, Agricultural and Resource Economics values the programs administered through CSREES.  The research, extension, and education opportunities provided through these programs are of high quality and respond to priority needs.  As a result of opportunities provided through the National Research Initiative (NRI), the Initiative for Future Agricultural and Food Systems (IFAFS), and the Fund for Rural America (FRA), as well as other programs, applied economists have been successful in developing a fuller understanding of the impacts of proposed agricultural policies and environmental regulations, and educating the public about these impacts.  This is fundamental to the operation of our democracy.

In my presentation this morning, I would like to make two main points:

1.  My first point is that the Council (C-FARE) supports the need for increased funding for research and education in support of the food, agriculture, and resource sectors of our economy.  Doubling this funding is a reasonable goal.  We recommend a portfolio approach to the funding of these research and education programs with a balance of formula and competitive funds.  This balance, we believe, is crucial to the federal-state partnership that underlies the CSREES mission. 

Pursuit of the research and education needs of agriculture and rural areas would not be possible without a secure and balanced funding portfolio through USDA.  This includes competitive peer-reviewed grants, as well as formula funds.  Formula funds foster the more basic and long term research and extension objectives that are not amenable to competitive grants.  The Council strongly supports efforts that will increase funding levels for competitively awarded research and education programs.  We stress, however, that increased funding for these specific programs should not come at the expense of formula funding.

2.  My second point relates more specifically to the competitively awarded grant programs.  The CSREES should be commended for the structuring of the NRI, IFAFS, and FRA programs so that they complement one another.  Although each has its individual focus, they fit together in an integrated way. For example, the NRI centers on disciplinary research. The IFAFS program is highly significant to the overall agricultural industry because it integrates research and education and encourages cooperation across disciplinary and geographic boundaries.  The FRA is more action oriented involving local entities in the projects.

Within this complement of competitively awarded CSREES grant programs, the Council recommends that a higher priority be given to applied economics research and education.  Economic analysis and knowledge is crucial to the resolution of the issues embodied in the subject matter areas to discussed this afternoon: developing production systems; revitalizing rural America; managing natural resources; linking agriculture, nutrition, and health; improving opportunities; and developing human capacity.  These areas all have economic content.  Important public policy and business decisions need to be made and wise decisions will require an understanding of the economic impacts. 

The NRI, which represents a broad scope of research areas, is an example of the need for more emphasis on economics.  Applied economic analysis can contribute to the other areas of research outside the Markets, Trade and Rural Development division.  This multidisciplinary approach can pay big dividends. 

Additional funding is needed, however, for basic disciplinary research in applied economics.  Given the current definitions of the research areas, this would fall in the Markets, Trade and Rural Development area.  Economists must build their analytical capabilities with new tools and better data if they are to resolve the important issues facing agriculture and rural areas.  When we examine how the budget is allocated across the research areas, we see a significant differential or gap in the funding for applied economics as a discipline.  We would like to see this corrected.

Before closing, I would like to address the Initiative for Future Agriculture and Food Systems program (IFAFS).  This has been a very positive program because of the focus on the integration of research and education, across disciplines, to target problems of importance to rural and agricultural stakeholders.  This approach has been the key to the success of the USDA and land grant university partnership.  This partnership is more vital than ever in a time of highly visible agricultural and environmental issues, tighter budgets, and pressure for more accountability.  I encourage CSREES to weigh in on the continued importance of this program when discussions arise to zero out this item in future federal budgets.

Thank you once again for the opportunity to be here.  There is strong support for more economics research across scientific societies and among policy makers.  I would ask that you consider expanding the program areas to realize the potential contributions of applied economics in resolving the food, agricultural and resource issues we face today.