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Appropriations Testimony
Submitted to the U.S. House of Representatives
Appropriations Subcommittee on Agriculture
March 18, 1999
Mr. Chairman and members of the subcommittee, it is a pleasure to submit this testimony to you on behalf of the Council on Food, Agricultural and Resources Economics (C-FARE) and the Consortium of Social Science Associations (COSSA). C-FARE is a non-profit association actively working to represent the agricultural economics profession in matters of science policy, priority setting, and budget determination at the federal level, and to collaborate with other agricultural science groups and government agencies in these activities. COSSA is an advocacy organization supported by over 100 professional associations, scientific societies, universities and research institutes, that promotes attention to and federal funding for the social and behavioral sciences.
Our recommendations are summarized below:
- Promote and support accountability for USDA programs by providing funding for an innovative study on performance measurement guidelines for agricultural research, extension and education programs. Such a study was authorized in Title VI, Subtitle C -- Studies, Section 631 of the Agriculture Research, Extension and Education Reform Act of 1998, and would cost less than $500,000.
- Increase social science funding within the National Research Initiative Competitive Grants Program (NRI). Double funding for the Markets, Trade and Rural Development Division to $9.2 million. And, increase the Natural Resources and the Environment Division to $32 million to generate new knowledge about the economic and social consequences of environmental regulation. We support increasing funding for the NRI to a total of $200 million.
- Expand competitive research grants programs at USDA by either: 1) allowing $120 million in funding for The Initiative for Future Agriculture and Food Systems, or 2) expanding the NRI to $320 million by targeting $120 million towards integrated critical and emerging issues on topics related to biotechnology, genomics, food safety, natural resources and the environment, farm efficiency and profitability, and precision agriculture.
- Increase support for USDA agencies that promote the development and use of economic and social science tools to guide decision making.
- Increase the Economic Research Service budget for research and analysis to $60
million, plus $14 million to evaluate the food and nutrition programs.
- Increase the National Agricultural Statistical Service budget to $86 million for
agriculture estimates and research, and $17 million for periodic Census of Agriculture.
- Increase the Natural Resources Conservation Service (NRCS) Budget to $1,415
million to maintain existing programs, and enhance economic and social science analysis.
- Increase funding for Cooperative State Research, Education and Extension Service base research and extension programs by $40 million (includes Hatch Act, McIntire-Stennis, Evans-Allen, Animal Health, Smith-Lever Formula 3(b) & (c), 1890 Colleges and Tuskegee).
Recommendation One:
Promote and support accountability for USDA programs by providing funding for an innovative study on performance measurement guidelines of the agricultural research, extension and education programs. Such a study was authorized in Title VI, Subtitle C -- Studies, Section 631 of the Agriculture Research, Extension and Education Reform Act of 1998.
Research accountability, assessment, evaluation, and impact analysis are receiving considerable attention in light of pressures on public budgets, a need to link benefits with costs, and the search for better strategic planning of research and education. Despite the Government Performance and Results Act of 1993 and ongoing USDA responses, no clear consensus exists about the most effective approaches to evaluate agricultural research, extension and education programs supported by USDA or within the land grant system.
A special study is needed to produce a consensus-based set of guidelines to evaluate the performance of agricultural research, extension and education programs. These guidelines should cover the spectrum from broad programs to specific projects and activities, basic to applied work, and across the social, biological and physical sciences. The guidelines should also address research evaluation on both ex-ante and ex-post bases, as well as progress toward goal attainment during the research process. The study team should draw from recognized university experts and USDA representatives implementing GPRA.
Recommendation Two:
Increase social science funding within the National Research Initiative Competitive Grants Program (NRI). Double funding for the Markets, Trade and Rural Development Division to $9.2 million. And, increase the Natural Resources and the Environment Division to $32 million to generate new knowledge about the economic and social consequences of environmental regulation. We support increasing funding for the NRI to a total of $200 million.
We urge you to double the amount of spending in the Markets, Trade and Rural Development Division of the National Research Initiative from $4.6 million to $9.2 million. The economic and social research funded in this division develops new knowledge and enhances our understanding of the economic and social forces on our agriculture and food system. The research is of high quality and value.
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Highlights of NRI-Funded Research
International Trade Liberalization and Global Competitiveness
Research on international trade liberalization and global competitiveness has greatly
improved our understanding of the demand for US products and how to access it. There is
an improved understanding of the costs and benefits of increased trade, and of different kinds
of trade restrictions imposed by the US and other countries. Innovative policies have been
studied to estimate how to stimulate demand for US agricultural exports and, consequently,
improve farm income. We also have an improved understanding of currency volatilities and
other pitfalls of globalization and expanded trade.
Risk Management Policies and Programs
NRI-funded economics research has made substantial and important progress in analyzing
existing and new insurance programs that may help producers protect themselves against
crop and revenue losses. Innovative credit programs have been developed, and incentives
for supply management programs have been analyzed.
Understanding the Implications of an Industrializing Agricultural Sector
Through NRI-funded economics and social science research we have a better understanding
of the economic drivers of increasing consolidation of production units, and greater coordination
and concentration among stages of the food system. Social science research is helping producers
and others understand how to survive and take advantage of change, whether through contracts,
alliances, cooperative arrangements or other innovative business forms. Agriculture's
relationships with the environment, communities and independent farmers have changed with
the structure of agriculture. To understand these changes, we need more economics and social
science research.
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We support an increase in funding for the Natural Resources and the Environment (NRE) Division of the NRI to $32 million with the following caveat: the increased funds will be used to generate new knowledge about the economic and social consequences of environmental regulation. This recommendation is consistent with the number one research priority generated by a national priority-setting activity conducted by scientists involved in and stakeholders of our food and agriculture system.
In its current form, the NRE Division of the NRI supports virtually no social science research. In 1996 (the most recent year complete data are available), only one project of 96 had any social science involvement. In addition, only 7 percent of the projects funded involved interdisciplinary teams usually defined as teams of applied biologists, microbiologists and molecular biologists. This narrow definition limits our ability to solve important economically- and socially driven problems in the agriculture and food system.
Recommendation Three:
Expand competitive research grants programs at USDA by either: 1) allowing $120 million in funding for The Initiative for Future Agriculture and Food Systems, or 2) expanding the NRI to $320 million by targeting $120 million towards critical and emerging issues on topics related to biotechnology, genomics, food safety, natural resources and the environment, farm efficiency and profitability, and precision agriculture.
Increased spending on agricultural research is the cornerstone of a productive and profitable agricultural sector. Current estimates of the rate of return on public spending on agricultural research, education and extension are extremely high (40-60 percent per year or higher). A recent report by the Economic Research Service finds that 75 percent of the productivity gains in agriculture can be traced to public spending on agricultural research.
Economic and social science research is needed in the following priority areas.
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Develop New Knowledge About Economic and Social Consequences of Environmental Regulation.
Economics and social science research programs are needed to: 1) enhance existing and develop new
methods to assess the benefits and costs of government regulation, 2) develop, design and evaluate
integrated policies and institutions to mitigate negative environmental impacts of production agriculture,
and 3) expand scientific knowledge about quantitative and qualitative assessment tools that can be
applied to non-market goods.
Enhance Knowledge and Improve Understanding of the Economic and Social Impacts of Biotechnology
and Genomics. Economists and social scientists can develop integrated models to analyze how
biotechnology affects farm size, production efficiency, competitiveness, trade potential, and other
elements of economic performance in agriculture. Economics can be used to understand how the
consolidation among agricultural chemical, seed and biotechnology companies will affect producers,
consumers and environmental quality. Economic and social science research methods can promote
understanding of how changes in the industry will affect the types of technologies produced and who
benefits from these products.
There are at least three important contributions economists and social scientists can make to a
national genomics research program. First, economic methods can be developed to help select target
species for gene sequencing. Second, economic models can be developed to answer questions about
the trade-offs consumers are willing to make between food characteristics such as taste, nutritional
value, and shelf life. Third, the social sciences can examine and develop new knowledge about the
potential social, economic and ethical consequences of various types of genomics research.
Expand the Science and Application of Economics to Improve Food Safety. Economics can
improve our understanding of the benefits and costs of options to reduce food borne illness from
pathogens, and pesticide residues in fresh and processed foods. Agricultural economists can generate
new knowledge about how changes in consumer demand affect food safety, health and nutrition.
Economic models could then be developed to evaluate the effectiveness of public and private efforts
to promote safer food production, transportation, handling and preparation.
Improve Farm Income and Risk Management Tools: Farm Efficiency and Profitability.
Agricultural economics research can improve the efficiency of farm income and risk management
tools. Economics can enhance our understanding of how to measure and manage risk in a new,
globalized, vertically coordinated food system for an expanded clientele base. Economics can be
used to develop new knowledge about risk management strategies, instruments, and portfolios
and adapt them to meet current challenges within the agriculture sector. Finally, economics can
improve producers' ability to manage complex financial accounting and reporting systems.
Examine the Impacts of the Changing Farm and Agribusiness Structure. The impacts of
the changing farm and agribusiness structure are profound. Economic and social science research
can improve our understanding of the forces driving structural change and concentration, and the
impacts of this change on the economic performance of vertically coordinated farming and
agribusiness. Economic and social science models of vertically coordinated systems can answer
important questions about market access, bargaining power, concentration, location of production,
financial arrangements, rural communities and the environment.
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Recommendation Four:
Increase support for USDA agencies that promote the development and use of economic and social science tools to guide decision making.
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Increase the Economic Research Service (ERS) budget for economic analysis and research to $60
million, plus $14 million to evaluate the food and nutrition programs. ERS is the principal intramural
social science research agency for USDA. ERS provides timely short and long run economic and social
science information and analyses to public and private sector decision makers including farmers. The
trend towards a more market-driven agricultural sector heightens the needs for increased spending
on economic and social science analysis and research. Sixty million dollars for economic analysis and
research is needed to maintain innovate, on-going programs and to support a number of critical
initiatives such as carbon sequestration research, global climate change, enhanced commodity market
analysis, and addressing the information needs of small and limited resource farmers.
We ask that you continue giving ERS the responsibility and funding for Food Assistance Program
Evaluation. We believe that program evaluation and analysis will be most effective when it is conducted
and managed by an agency separate from the one implementing the program itself. An increase to $14
million in funding for FY 2000 will greatly improve basic knowledge and understanding of the forces
affecting poverty, the impacts of welfare reform, the long-term effects of assistance programs,
and waste, fraud and abuse in the food stamp program.
Increase the National Agricultural and Statistical Service (NASS) Budget to $86 million for
agriculture estimates and research, and $17 million for the periodic census of agriculture. NASS
provides the official USDA production, economic, and environmental forecasts and estimates on
agriculture and rural America. NASS' objective and accurate statistical information is highly
valued by stakeholders of the agricultural research and education. A funding increase is needed
to maintain and enhance existing programs, and to support new initiatives such as the Agricultural
Economics and Land Ownership Survey, the establishment of a field office in Puerto Rico, and an
expansion of the pesticide use survey to include commercial nursery and greenhouse operations.
Increase the Natural Resources Conservation Service (NRCS) Budget to $1,415 million to maintain
existing programs, and enhance economic and social science analysis. NRCS provides national leadership
in partnerships to help people conserve, improve, and sustain the Nation's natural resources and
environment. NRCS technical experts help land managers and communities take a comprehensive
approach in planning the use and protection of soil, water, and related resources on private and
non-Federal lands, in rural, suburban, urban, and developing areas. A funding increase is needed
to enhance Conservation Technical Assistance programs to meet increased demand for conservation
services. This would include economic analysis of resource problems associated with conservation
assistance for animal feeding operations, non-point source pollution, misapplication of fertilizers
and pesticides, and land use changes. Increased funding is also needed for economic and social science
analysis of thousands of important watershed dams that will reach the end of their design life this
decade.
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Recommendation Five:
Increase funding for Cooperative State Research, Education and Extension Service base research and extension programs by $40 million (includes Hatch Act, McIntire-Stennis, Evans-Allen, Animal Health, Smith-Lever Formula 3(b) & (c), 1890 Colleges and Tuskegee).
An increase in base research and extension programs is needed to maintain and enhance mission-linked multi-disciplinary, multi-function projects and programs in a number of critical and emerging areas. For example, integrated research, extension and education programs are needed to address problems and challenges related to the changing structure of American agriculture, agricultural genome and germplasm preservation, expanded food nutrition and education programs, agricultural waste management, water quality, carbon sequestration, and children, youth and families at risk.
Base programs are an important and productive component of the federal research, education and extension system. Combined with other federal funding mechanisms such as competitive and special grants, base programs have provided state experiment stations and extension systems with an effective balance of resource stability, flexibility in planning, regional collaboration, and a linkage between national and local priority setting.
Thank you for the opportunity to present these views. Please contact us with any questions.
Tracy Irwin Hewitt, Executive Director, C-FARE, 703-524-2145
Peter Barry, Chair, C-FARE, 217-333-1827
Howard Silver, COSSA, 202-842-3525
Public Statements
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