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The 1995 Farm Bill: Research,
Education, and Extension Issues

Jean M. Rawson
Environment and Natural Resources Policy Division

Updated November 30, 1996






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

Current Issues
• Funding
• Direct and Formula Funding, Competitive Grants, and Special Research Grants
• Advisory Councils and Research Evaluation Mechanisms
• Extension Service Issues

The Research Title of the Farm Bill


The U.S. agricultural research, education, and extension system is comprised of a vast network of Federal agricultural laboratories (the U.S. Department of Agriculture (USDA) Agricultural Research Service (ARS)), State agricultural experiment stations (Cooperative State Research, Education, and Extension Service (CSREES)), land-grant college of agriculture teaching programs, and State and county Extension offices. The USDA reorganization in 1994 also put the Economic Research Service (ERS) and the National Agricultural Statistics Service (NASS) under the direction of the new Assistant Secretary for Research, Education, and Economics. The Forest Service also has a research program. Agricultural research represents 1.7% of Federal spending for all research and development.

Although U.S. agricultural research and extension programs are permanently authorized, funding authority for USDA's in-house research programs, and for Federal support for cooperative research, higher education, extension programs in the States, and several research grant programs, is contained in Title XVI of the 1990 farm act (P.L. 101-624) and will expire at the end of 1995.

The House Agriculture Committee has proposed extending the current research title for 2 years and beginning a major reform effort in separate legislation next year. In preparation for hearings in 1996, Chairman Roberts released a list of 57 questions for the agricultural research and extension community to answer by November 1995.

The Senate Agriculture Committee approved a new research title on July 18. Among the revisions are measures to improve research tracking and accountability, terminate a number of research advisory boards and replace them with one new one, repeal existing but unused authorities, and make competitive grants to universities for facilities construction.

The conference agreement on an FY1996 spending bill, which was completed on September 27, would provide $1.78 billion for all of the Research, Education, and Economics agencies, compared with the FY1995 appropriation of $1.82 billion. ARS is slated to receive $740.2 million and CSREES $907.5 million, representing a total reduction of $41 million from last year's levels for those agencies.

The conference agreement allocates $96.7 million for the National Research Initiative (NRI) competitive research grants program, compared with the appropriated level of $103.1 million in FY1995. The Administration had requested $130 million for the NRI.


A decision is stilt pending on the content of the research title for the 1995 farm bill. The Senate Agriculture Committee unanimously approved a new farm bill research title on July 18. However, the leadership of the House Agriculture Committee announced in mid-August that the Committee would prefer to extend existing research and extension authorities for 2 years, and consider separate legislation making major reforms in research and education policies and programs in 1996.

In mid-November the Senate removed a research provision that had been part of the reconciliation conference agreement (H.R. 2491). The provision would have reserved $30 million annually of savings from changes in Federal milk marketing orders and allocated those mandatory funds to a competitive agricultural research grants program.


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 Land-Grant College Act, establishing a college of agriculture in each State, and 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 the States to support 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.

In addition to these acts that established the structure of the research, education, and extension system, Congress also passed 10 separate bills expanding and redefining the mission of agricultural research between 1914 and 1977. In 1977, many of these separate authorities were consolidated into the National Agricultural Research, Extension, and Teaching Policy Act, and incorporated into the 1977 farm bill (the Food and Agriculture Act of 1977, P.L. 95-113).

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 business have exceeded public investment for several decades, but the relative shares have remained quite stable at about 43% public, 57% private, according to the National Research Council. Private investment still goes primarily to applied research--e.g., creating or improving product lines in plant varieties, veterinary pharmaceuticals, agricultural chemicals, etc.

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

USDA's largest in-house research agency, the Agricultural Research Service (ARS), employs about 2,600 scientists at more than 100 Federal laboratories in the United States and overseas. 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 Human Nutrition Information Service and the National Agricultural Library were merged with ARS in the 1994 USDA reorganization.

USDA's other in-house research agencies are the National Agricultural Statistics Service (NASS), the Economic Research Service (ERS), and the research arm of the Forest Service. NASS administers USDA's program of collecting and publishing current national and State agricultural statistics. ERS provides economic and social science analysis on agriculture, food, natural resources, and rural America. The Forest Service allocates about $200 million annually to a research program on forest biology, ecology, and forest products.

The USDA Cooperative State Research, Education, and Extension Service (CSREES) is a new agency resulting from the merging of the Cooperative State Research Service (CSRS) and the Extension Service (ES) under the 1994 reorganization. The agency does not conduct in-house research, but instead provides Federal funds and research 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, and the Smith-Lever Act of 1914, as amended. Both formulas use factors pertaining to farm and rural population. CSREES also distributes formula funds to the 1890 and 1994 land-grant schools, and administers competitive grants to the land-grant institutions for improving their agricultural curricula and assisting undergraduate and graduate students. In addition, the agency administers the Special Research (earmarked) and National Research Initiative (NRI) competitive research grant programs, a forestry research program, and the Sustainable Agriculture Research and Education (SARE) program, among others.

There are roughly 12,000 scientists (all State employees) in the national network of land-grant schools and their associated State agricultural experiment stations. The USDA contribution on average accounts for about 30% of the total support (Federal, State, and private) for the State agricultural experiment stations (Hatch Act formula funds alone account for about 10%). Of the Federal dollars going to SAES, CSREES is the source of about 51%; 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 funds, which make up approximately 50% of total SAES support, and private funds, which constitute about 13%. 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.

There are approximately 32,000 employees (State and county) and 2.8 million volunteers involved in the continuing education programs of the Cooperative Extension System 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 accounts for only 2% of total funding; in others, it constitutes as much as 66%. Furthermore, the decisions on how to allocate those Federal dollars to specific 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. At the same time, the pressure is strong on certain legislators to maintain Federal funding for research in those States where Federal money is a proportionally greater source of support than State, local, and private funds.

Current Issues


The appropriations for the USDA Research, Education and Economics agencies (excluding Forest Service research) for the past 5 years are as follows (in millions of dollars):

Agency 1992 1993 1994 1995 1996
Agricultural Research Service 726.3 695.2 645.7 757.0 740.2
Cooperative State Research, Education, and Extension
- Research
- Extension





National Agricultural Statistics Service 76.4 81.1 81.9 81.4 81.1
Economic Research Service 58.9 58.9 55.2 53.9 54.6
Total 1,785.5 1,745.8 1,715.7 1,824.0 1,783.5

Source: The Budget of the U.S. Government, FY1992-96; and H. Rpt. 104-268, Conference Report to Accompany P.L. 104-37, FY1996 Agriculture Appropriations.

When adjusted for inflation, Federal funding for agricultural research, education, and extension has remained essentially flat for more than two decades. Research spending represents roughly 4% of the total USDA budget (excluding domestic food programs). It represented 1.7% of the $68 billion Federal appropriation for all research and development (R&D) in 1994, according to the National Science Foundation (NSF). In comparison, the NSF reports that defense research represents 55.7% and health research 16% of total Federal R&D.

The conference report on the FY1996 agriculture appropriations bill (P.L. 104-37, H.R. 1976), signed into law on October 21, reduces funding by 2% for the research and education function of USDA -- from $1.82 million in FY1995 to $1.78 million. The bill reduces funds to the land grant colleges of agriculture under the 1887 Hatch Act formula for the first time in 10 years, allocating $168.7 million for FY1996, down from $171.3 million in FY1995. The conferees reversed most of the major funding cuts proposed earlier in the House appropriations bill (which would have trimmed $152 million) but restored some of the reductions that had been eliminated in the Senate's bill (which would have cut $33 million) to accomplish an overall reduction of $41 million.

The level of funding for all USDA research, education, and extension programs is an important underlying issue in the debate on the farm bill research title. Supporters of level or increased funding for USDA research and extension cite two primary rationales for their position. First, it is widely accepted that R&D (in all areas) is critical to domestic economic development and to remaining competitive in international markets. Secondly, studies done periodically over the last several decades suggest that the rate of return to farmers and consumers from Federal investment in agricultural research is consistently high. Supporters of increased funding argue that decreasing or simply maintaining current levels of research spending will harm the farm sector's wellbeing 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, and private industry are the logical investors for research that brings local benefits and competitive advantages to agribusinesses.

The funding debate raises many of the same questions that were asked prior to enactment of research policy reforms in the 1977 farm bill: What type of research should the Federal Government be primarily responsible for in a time of fiscal restraint, and how can funds be targeted to it? What mechanisms could the Government use to elicit increased State or private funding? Are new institutional structures called for? How are research priorities set and how is progress evaluated? Are there overlapping missions and duplication of effort between in-house and State cooperative research? These questions are causing some policymakers to argue that it is time to seriously examine research policies in the farm bill and explore innovative funding approaches.

(For more detailed information on agricultural appropriations for research and education, see CRS Report 95-624, Appropriations for FY1996: Agriculture.)

Direct and Formula Funding, Competitive Grants, and Special Research Grants

Federal funds in support of agricultural research, education, and extension are distributed in four ways--by direct funding to USDA in-house research agencies; formula funds (block grants) to the States; competitive grants; and special research (earmarked) grants to designated land grant universities for specific research.

Budget realities are driving congressional interest in the role of directly funded in-house research agencies and their roles in relation to the whole research, education, and extension system. Some policymakers state that it is time for a complete review of ARS, ERS, and the research arm of the Forest Service, to determine if some of their research could be done as well and more cost effectively by land-grant and other institutions. According to a recent study by the National Center for Food and Agricultural Policy and the Hubert H. Humphrey Institute of Public Affairs, "the percentage of USDA's research budget devoted to in-house research (63%) is more than twice the average for all Government agencies (25%)."

The States use formula funds as a steady foundation of support for their core research and extension programs. The formulas are based upon each State's rural and farm population relative to the total U.S. rural and farm population. As long as the level of Federal appropriations remains relatively constant, the formulas assure that the annual allocation of funds to each State is fairly stable and predictable. Supporters of formula funding maintain that this stability has allowed for a wide variety of research to be supported and has promoted long-term research success. 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. For example, the formula could also include factors related to poverty, malnutrition, rural development, or land use. The resulting shift in allocation could profoundly affect which institutions would receive Federal money. Proposals have been made in past farm bills to delete or change the formulas, but there has not been much political support for this.

In the 1990 farm bill, largely in response to a National Research Council (NRC) initiative, Congress significantly expanded the scope of the competitive grants program, renamed it the National Research Initiative (NRI), and increased funding authorization over the 5-year period to a level of $500 million by FY1995. Actual appropriations have not reached the authorized levels; the FY1995 appropriation was $103.1 million. The FY1996 appropriations conference agreement (P.L. 104-37) reduces funding for the NRI by $6.4 million, to $96.7 million.

NRC testimony at a May 24 hearing of Senate Subcommittee on Research, Nutrition, and General Legislation 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. Although competitive grants--which are peer reviewed for merit by panels of scientists--are not a perfect mechanism for stimulating new research activity, they are nonetheless the means that the greater scientific community has chosen. The National Institutes of Health and the National Science Foundation allocate more than 80% of their research dollars competitively. The NRC recommends that up to 35% of USDA's total research portfolio be awarded competitively. Currently, even though the NRI program has doubled in size since its inception, 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. Some also are critical of the NRI's emphasis on basic research (exploration of fundamental elements of plant and animal science that may or may not prove useful in the long term) as opposed to applied research (finding solutions to production problems, supporting the development of new products from agriculture, and other practical matters). The current authority for the NRI stipulates that no less than 20% of the grants should go to support applied research. The Senate Agriculture Committee's proposed research title would raise this requirement to 40%.

Congress established the Special Research Grants program in 1965 as a general authority for agricultural research grants. 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., nonpeer-reviewed grants only to land-grant schools, and others are "unrestricted" grants that are awarded competitively to a broad spectrum of public and private researchers.

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 nonreviewed research, the Nation is undercutting its future agricultural productivity and competitiveness.

Advisory Councils and Research Evaluation Mechanisms

In 1977, Congress consolidated more than a dozen existing agricultural research acts into permanent legislation--the National Agricultural Research, Extension, and Teaching Policy Act of 1977--and incorporated it into the 1977 farm bill. The 1977 act made some major reforms in research policy, largely in response to several studies in the 1970s that were critical of research efficiency and coordination. Congress established the Joint Council on Food and Agricultural Sciences and the National Agricultural Research and Extension Users Advisory Board for the purpose of improving research coordination and priority-setting within the large, decentralized Federal/State research and education system.

In the 1977 act and subsequent farm bill research titles, Congress also authorized six additional advisory bodies pertaining to animal health, rangeland research, biotechnology, and other areas. Some policymakers and stakeholders in the research and extension system maintain that there are now too many advisory councils to produce a clear strategic plan and provide policy advice to USDA's Under Secretary for Research, Education, and Economics. Furthermore, the 1994 USDA reorganization changed the configuration of the in-house research agencies and their relationships with each other, which also suggests that the time may be right for a reexamination of the advisory councils.

An issue closely related to improved research efficiency is the question of how the information on all currently ongoing research projects is gathered and reported. The Current Research Information System (CRIS) is a computerized research classification program into which all Federal and State research projects now are logged. Many observers have stated that the keywords used for classifying projects are subjectively determined by the person entering the data, and often are influenced by whatever research priority seems to be "in vogue" (e.g., water quality, nutrient management, integrated pest management, etc.). Others have noted that the CRIS system was designed to show work in progress and therefore is not of much value if the goal is to determine the distribution of funds across the spectrum of research areas or to evaluate research progress. This issue is receiving congressional attention, and is likely to come up for debate in the markup of the research title.

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.

If Congress decides to debate major reforms in agricultural research policy, it is likely also to address the role and mission of the CES. Some of the questions that may be asked in the debate are: What are the most critical areas of need for Extension education programs, and do CES programs address them? Do CES programs overlap with other public and private sources of research-based information? What is the rationale for Federal funding for Extension through USDA if a substantial part of its programming is nonagricultural? What alternative sources of funding could be considered? Do CES professionals have the scientific background necessary to disseminate the results of biotechnological innovation to the production and processing sectors? Should CES serve inner city and suburban populations? Could program delivery be made more efficient through greater coordination of State Cooperative Extension programs within agricultural regions?

The Research Title of the Farm Bill

Although the 1977 act permanently authorizes the major research, education, and extension programs, the authorization for appropriations for most of the programs expires with the farm bill. (One exception is the Sustainable Agriculture Research and Education (SARE) program, which has open-ended funding authority. For further information on this subject, see CRS Report 95-1062, Sustainable Agriculture.) The research title of the farm bill is not the only means by which Congress makes changes in research priorities, however. The annual appropriations bills carry direct messages about congressional priorities, and accompanying report language frequently modifies the administration of certain grant programs.

The Senate Agriculture Committee reviewed and approved a new 1995 farm bill research title on July 18. The Committee is likely to make changes to this draft title when it marks up legislation covering the agricultural policy areas not covered in the omnibus budget reconciliation bill -- trade, conservation, and rural development, and others.

The Committee-approved title contains several significant reforms of current research, education, and extension policy. First, it would establish a 25-member National Agricultural Research, Extension, Education and Economics Advisory Board to replace the current Joint Council on Food and Agricultural Sciences, the National Agricultural Research and Extension Users Advisory Board, the Agricultural Science and Technology Review Board, and four other research advisory boards. The proposal is similar to the Administration's, which was to replace the first three boards with a new advisory body for the purpose of improving research coordination and efficiency.

Relatedly, the Committee also concurred with an Administration proposal to require USDA to develop a 10-year strategic plan for the construction, consolidation, modernization and closure of federally supported research facilities. In addition, all proposals for new funding for university facilities would go through a mandatory USDA review that would assess the need for the new facility in the context of the strategic plan, among other criteria. The Committee also would require USDA to develop a research tracking system that improves upon or replaces the CRIS system in order to improve the evaluation of research performance. The Department's activities in this area would have to be consistent with efforts already being made to conform with the Government Performance and Results Act of 1993 (P.L. 103-62). Finally, the Committee would require the National Academy of Sciences to conduct a study to review the mission of ARS and evaluate the strength of its science and its relevance to national priorities and relationship to the overall research and education system.

The Committee also made changes in other areas of research policy. First, it would enhance the Federal research response to imminent or emerging threats to food safety and animal and plant health by allowing the Secretary of Agriculture to transfer up to 5% of USDA funds to the Under Secretary for Research, Education, and Economics in the event of such a threat. Second, the Committee concurred with the Administration on elevating aquaculture as a priority for USDA research. The Committee-approved title would make USDA the lead Federal agency for aquaculture and extend a $7.5 million spending authority for aquaculture assistance programs through 2002.

In the area of spending authority, the Committee would authorize $850 million annually for ARS programs, $310 million annually in Hatch Act formula funds for State agricultural experiment stations, and $460 million annually for the Cooperative Extension System, through 2002. These authorization levels are the same as the FY1995 funding authorities under the 1990 farm bill.

Finally, the Committee would authorize $500 million annually for the NRI competitive grants program through 2002, making funds available for a two-year period in order to alleviate administrative difficulties connected with peer reviewing hundreds of proposals in a short time period. Senate Agriculture Chairman Lugar also has publicly spoken of his intent to propose that funding be mandatory for the NRI competitive grants program. A similar proposal (but at a much lower spending level) was included briefly in the Senate version of the conference agreement on budget reconciliation, but it was removed in the final bill that was approved by both Chambers.

In August 1995 House Agriculture Committee Chairman Roberts released a list of 57 questions on the future of agricultural research, education, and extension; in addition, the Committee has asked the General Accounting Office to conduct a detailed accounting of Federal agricultural research programs. Chairman Roberts and ranking minority leader E. (Kika) de la Garza also have announced their intention to seek a 2-year extension of current research, education, and extension authorities, and to begin a fundamental reevaluation of research policies in 1996. However, if the final Senate markup of the Senate's research title contains significant changes, the House Agriculture Committee may accelerate the development of its own title but still leave open the option of further debate in 1996.

Among the Administration's research and education proposals so far not included in any draft legislation are the creation of a USDA policy council to coordinate the work of the new and merged in-house research agencies under the Under Secretary for Research, Education, and Economics; and a competitive matching grant program for applied research, to replace earmarked Special Research Grants.