U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005
by David Schimmelpfennig
and Paul Heisey
Economic Information Bulletin No. (EIB-45) 42 pp, March 2009
Public agricultural research has been a major contributor to
advances in agricultural productivity that have led to abundant and
affordable food and fiber in the United States. A period of
sustained growth in public agricultural research-and-development
(R&D) investment that began in the 1930s ended in about 1980,
with smaller and more variable increases observed since that time.
Private investment in agricultural R&D surpassed public
investment for the first time in 1980. The slowdown in public
research funding growth has coincided with new demands from
consumers and taxpayers for environmental and food safety advances
based on public research.
What Is the Issue?
The public agricultural research system in the United States is
a Federal-State partnership. The Federal Government funds
intramural research through USDA agencies such as the Agricultural
Research Service (ARS) and extramural research at State
institutions such as the State Agricultural Experiment Stations
(SAES), which are located at land-grant universities. SAES are also
funded by State legislative appropriations, a variety of private
sources, including industry funding, and Federal agencies other
This decentralized State-led structure has resulted historically
in geographically specific applied research. Policy proposals in
recent decades have recommended shifting the focus of public
agricultural research to more basic research, giving higher
priority to peer-reviewed, competitively funded grants. The 2008
Food, Conservation, and Energy Act (Farm Act) created the National
Institute for Food and Agriculture to coordinate USDA's
agricultural research funding.
What Did the Study Find?
Real public agricultural research spending-that is, spending
from all funding sources adjusted for inflation-fluctuated but
remained basically level from 1980 through the mid-1990s, then
fluctuated. In the late 1990s, SAES funding from Federal sources
outside of USDA as well as non- Federal sources continued to
increase. Federal intramural funding of ARS research leveled
Funding levels from the various sources that support public
agricultural research have changed since 1980. Funding sources
include State appropriations, formula funds, and competitive and
special grants, but also include support provided by the private
sector. In inflation-adjusted terms, shifts in funding from these
various sources have resulted in constant or slowly increasing
overall expenditures on public agricultural research:
• USDA funds intended for the States, administered by the
Cooperative State Research, Education, and Extension Service
(CSREES), have remained essentially constant in real terms since
1980. However, the composition of CSREES funds has changed over
-Formula funds declined in real terms by about half over the
1980-2005 period. These funds are based on statutory formulas
governed by legislation.
-Competitive grant funding rose in real terms, more than
quadrupling by the mid-1990s, and has fluctuated since that time.
Peer-reviewed competitive grants are awarded in response to
-Special grants (Congressional earmarks) rose by 250 percent in
real terms until the mid- 1990s, fell through 2001, and then rose
-Other CSREES-administered funds have risen the most rapidly of
all research funding in real terms since the late 1990s.
• Grants from other Federal agencies, like the U.S. Department
of Energy, the National Institutes of Health, and the National
Science Foundation, to SAES and other cooperating institutions more
than tripled in real terms from 1980 through 2005. Funding from
these non-USDA sources is now nearly as large as the funding
obtained from private companies and SAES sales of research
• State agreements with private companies and commodity
organizations, sales of products and intellectual property, and
other non-Federal sources of funds have grown continuously in real
terms since 1980.
USDA intramural research expenditures have fluctuated,
especially at ARS. Intramural spending (by USDA agencies on inhouse
research) declined slightly in real terms from 1980 to the late
1990s, before returning in real terms to its 1980 level. Most of
this pattern can be explained by expenditure trends at ARS. The
number of ARS scientists, which had been declining, rose with this
increase in spending, but not enough to match the 1980 number.
CSREES funding of basic research has declined. Of the three main
CSREES funding instruments for which detailed data are available,
competitive grants are directed more toward basic research than are
formula funds, and formula funds are directed more to basic
research than are special grants. CSREES has been viewed as setting
the direction of extramural public agricultural research,
particularly because of the matching funds supplied by State
legislatures. This perception exists even though all CSREES funding
going to the States currently accounts for only a little over 10
percent of all public agricultural research expenditures. Although
Federal support might be expected to favor basic research,
• The percentage of agricultural competitive grants devoted to
basic research fell from 76 percent to 65 percent from 1998 to
• Over the same period, the total amount of formula funds
declined in real terms as the percentage of those funds devoted to
basic research remained at about 40 percent.
• Although the percentage of CSREES special grants going to
basic research increased slightly, the percentage of funding
devoted to basic research fell for CSREES as a whole.
Since private agricultural input companies tend to focus their
research on near-market research, it can be assumed that industry
funding is usually directed more toward applied research than basic
research, doing little to offset other reductions in basic
research. USDA intramural research is divided roughly equally
between basic and applied topics.
How Was the Study
This report focuses on how agricultural funding mechanisms
changed between 1980 and 2005, the years when comparable data are
available. The Current Research Information System (CRIS), National
Science Foundation, and USDA agency budget directors supplied the
data required to address patterns of public research funding.
Economic Research Service researchers had previously developed a
research deflator that was updated for this project and used to
convert nominal dollars to real constant dollars.
Expenditures from CSREES funds in 1998 and 2003 (years for which
data on research topics are comparable) were analyzed following
specialized queries to the CRIS system. This allowed disaggregation
not available in published reports. This analysis determined the
division between basic and applied/developmental research by
funding instrument and research topic for CSREES funding of State
institutions. The division between basic and applied/developmental
research for ARS was supplied by the ARS budget office.