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Schimmelpfennig, David

 U.S. public agricultural research: changes in funding sources and shifts 

in emphasis, 1980-2005. (Economic information bulletin; no. 45)

 1. Agriculture—Research—United States—Finance.

 I. Heisey, Paul W. 

 II. United States. Dept. of Agriculture. Economic Research Service.

III. Title.

HD1410.6.U6

Photo credit: Scott Bauer, ARS Photo Center, USDA

www.ers.usda.gov www.ers.usda.gov
United States

Department

of Agriculture

www.ers.usda.gov

A Report from the Economic Research Service

Abstract

Over the years, proposals have recommended shifting the focus of public agricultural 

research from applied to basic research, and giving higher priority to peer-reviewed, 

competitively funded grants. The public agricultural research system in the United States 

is a Federal-State partnership, with most research conducted at State institutions. In 

recent years, State funds have declined, USDA funds have remained fairly steady (with 

changes in the composition of funding), but funding from other Federal agencies and the 

private sector has increased. Efforts to increase competitively awarded funds for research 

have fl uctuated over time, as have special grants (earmarks). Along with shifts in funding 

sources, the proportion of basic research being undertaken within the public agricultural 

research system has declined. This report focuses on the way public agricultural research 

is funded in the United States and how changes in funding sources over the last 25 years 

refl ect changes in the type of research pursued.

Keywords: Agricultural research, Current Research Information System, CRIS, State 

Agricultural Experiment Stations (SAES), competitive and formula funds

Acknowledgments

We received valuable assistance toward increasing consistency among the fi gures for 

different USDA agencies from Angel Cradle of the Agricultural Research Service, Cliff 

Hickman and John Sebelius of the Forest Service, Ann Marie Thro of the Cooperative State 

Research, Education, and Extension Service, and Linda Neely, formerly of the Economic 

Research Service. It was in this effort that we gained a renewed and deeper appreciation for 

the challenges involved in keeping the Current Research Information System up to date. 

We were already well aware that without the CRIS system and special reports produced 

by Dennis Ungelsbee that this report would not have been possible in its present form. Our 

ERS colleagues Utpal Vasavada, Marca Weinberg, Robbin Shoemaker, Carlos Arnade, as 

well as George Frisvold (University of Arizona), J.H. Bahn (CSREES), Sharon Drumm 

(ARS), and an anonymous reviewer, provided helpful comments and suggestions.

David Schimmelpfennig and Paul Heisey

U.S. Public Agricultural Research

Changes in Funding Sources and 

Shifts in Emphasis, 1980-2005

Economic

Information

Bulletin

Number 45

March 2009
ii

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45

Economic Research Service/USDA

Contents

Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

About the Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

 The Current Research Information System. . . . . . . . . . . . . . . . . . . . . . . . 5

 Creating a Research Expenditure Defl ator . . . . . . . . . . . . . . . . . . . . . . . . 6

Public Agricultural Research As a Federal-State Partnership . . . . . . . . 7

 USDA Funding of State Agricultural Experimental Stations 

 Remains Important . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

 Mission Areas Have Remained the Same, Specifi c Crop 

 Research Has Changed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Recent Institutional Changes and Trends in Funding . . . . . . . . . . . . . . 13

 Competitive Grants and Competitive Funding in the CRIS System. . . . 14

 Basic and Applied Research in the CRIS System. . . . . . . . . . . . . . . . . . 15

Shifts to Competitive Awards and the Limited Impact 

on Basic Agricultural Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

 The Focus of Special Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

 Scientifi c Personnel in ARS and the SAES . . . . . . . . . . . . . . . . . . . . . . 22

Changes in Funding Sources Interact To Infl uence 

Research Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Research Results May Have Additional Impact 

Through “Spillover” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Recommended citation format for this publication:

Schimmelpfennig, David, and Paul Heisey. U.S. Public 

Agricultural Research: Changes in Funding Sources and Shifts in 

Emphasis, 1980-2005. EIB-45, U.S. Dept. of Agriculture, Econ. 

Res. Serv. March 2009.
iii

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Economic Research Service/USDA

Summary

Public agricultural research has been a major contributor to advances in 

agricultural productivity that have led to abundant and affordable food and 

fi ber 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 fi rst 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 than USDA.

This decentralized State-led structure has resulted historically in geographically specifi c 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 infl ation—fl uctuated but remained basically 

level from 1980 through the mid-1990s, then fl uctuated. 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 off.

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 infl ation-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 time:
iv

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Economic Research Service/USDA

❑ 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 fl uctuated since that time. Peer-reviewed 

competitive grants are awarded in response to proposal requests.

❑ Special grants (Congressional earmarks) rose by 250 percent in real 

terms until the mid-1990s, fell through 2001, and then rose again.

❑ 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 byproducts.

• 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 fl uctuated, 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, instead: 

• The percentage of agricultural competitive grants devoted to basic 

research fell from 76 percent to 65 percent from 1998 to 2003.

• 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 
v

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45 

Economic Research Service/USDA

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 Conducted?

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 defl ator 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 offi ce.

1

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Introduction

Advances in agricultural productivity have led to abundant and affordable 

food and fi ber throughout most of the developed world. More effi cient agricultural machinery, agricultural chemicals and fertilizers, genetic improvements in crops, and changes in farm management techniques have transformed 

U.S. agriculture since the Great Depression and set the stage for continued 

productivity growth. Agricultural research funded by both public agencies and 

private-sector fi rms has been the most important source of these advances. 

Studies consistently fi nd high social rates of return from public agricultural 

research, with median rates exceeding 40 percent (Alston et al., 2000; Evenson, 

2001). Even when adjustments are made for such factors as private-sector 

research, losses from tax collection, and errors in research lag estimates, rates 

of return to public research remain positive (Fuglie et al., 1996).

The environment for U.S. public agricultural research changed over the past 

30 to 40 years. Private-sector investment in agricultural research and development (R&D) in the United States grew rapidly from the middle 1970s 

to the present, and surpassed public-sector investment by the early 1980s. 

The rate of increase in total public-sector agricultural research expenditures 

slowed during the same time period (fi g. 1).1 Meanwhile, government and 

private-foundation reports noted that both public-sector agricultural research 

and mission-oriented government agencies had become more focused 

on applied research rather than on basic research (National Academy of 

Sciences, 1972; Rockefeller Foundation, 1982; National Research Council, 

1996). These reports also recommended a shift in funding mechanisms 

toward more use of competitive allocation rather than formula funding of 

State Agricultural Experiment Stations (SAES). 

Debates over the direction of public agricultural research and the nature of 

its funding mechanisms have continued (Alston and Pardey, 1996; Fuglie 

and Schimmelpfennig, 2000; Huffman and Evenson, 2006a; Huffman and 

Evenson, 2006b; National Research Council, 2002; National Research 

 1Reliable estimates for total privatesector investments in agricultural R&D 

are not available after 1998.

Figure 1

Real public and private agricultural R&D expenditures 

in the U.S. since 1970

Billion dollars (constant 2000 dollars)

Source: National Science Foundation; USDA, Current Research Information 

System (CRIS); ERS.

1970 73 76 79 82 85 88 91 94 97 2000 03

0

1

2

3

4

5

6

Public agricultural R&D spending

Private agricultural R&D spending
2

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45

Economic Research Service/USDA

Council, 2003). Over the last few decades, changes have occurred in 

constant-dollar funding levels for various other disciplines supported by the 

Federal Government as shown in fi gure 2. Biomedical research increased 

the most; but research in the other life sciences, such as agricultural sciences 

and biology, as well as engineering, environmental sciences, and computer 

sciences, increased over most of the period since 1980, except recently 

between 2003 and 2005. 

This report documents changes in funding of public agricultural research 

between 1980 and 2005—about the time the growth in public expenditures 

slowed and was surpassed by private expenditures—with the intention of 

understanding how public research topics have been impacted. Formula 

and competitive funding changed during that time period, and by delving 

deeper into which topics are funded by different funding mechanisms, we 

can analyze the ways in which research topics and output have been affected. 

Although defi nitions of basic and applied research are often debated, many 

policy prescriptions continue to call for greater emphasis on basic research. 

Thus, we analyze how changes in funding mechanisms have affected the 

distinction between basic and applied research.

The “Golden Age” of agricultural research that began in the early 1950s 

was largely the result of an expansion of public support for the sciences 

following World War II (Bush, 1945; Alston and Pardey, 1996). Public 

support for agricultural research grew rapidly in real terms, compared with 

its pre-war growth rate, despite the fact that public agricultural research 

spending, as a percentage of all public non-Defense research, fell during the 

1950s and early 1960s before it stabilized (National Science Foundation).2 2In the 1950s and 1960s, general

science/space/technology dominated 

the non-Defense research portfolio.

Figure 2

Trends in federal research by discipline, fiscal years 1970-2006

Billion dollars (constant FY 2007 dollars)

Note: Life sciences are split into National Institutes of Health (NIH) support for biomedical 

research and all other agencies' support for life sciences. 

* Other includes research not classified (includes basic research and applied research; 

excludes development and R&D facilities).

Source: National Science Foundation, Federal Funds for Research and Development 

FY 2004, 2005, 2006, 2006. FY 2005 and 2006 data are preliminary. Constant-dollar 

conversions are based on Office of Management and Budget's gross domestic product

(GDP) deflators.

Used with permission, © 2007 AAAS.

1970 73 76 79 82 85 88 91 94 97 2000 03 06

0

5

10

15

20

25

30 NIH biomedical research

All other life sciences

Psychology

Physical sciences

Environmental sciences

Mathematics/computer sciences

Engineering

Social sciences

Other*
3

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Many agricultural research advances during this period originated in the 

United States and were disseminated around the world through public and 

private channels, more as a result of “design transfer” or “capacity transfer” 

than through the direct transfer of materials such as plant varieties (Pardey 

et al., 2006; Hayami and Ruttan, 1985). The resulting agricultural products 

improved the health and welfare of many Americans and infl uenced the 

“Green Revolution” in many developing countries, particularly in Asia and 

Latin America.

Changes in Federal investments in agricultural research have been taking 

place since the 1960s, but became more pronounced after 1980 as privatesector agricultural research expanded. One notable change in public 

agricultural research funding since 1980 has been increases in real (infl ationadjusted) competitive funds and decreases in real formula funds. Formula 

funding, or block grants to States, as formula funds are sometimes called, has 

declined in real terms, while industry agreements and non-USDA Federal 

agreements have risen. There have also been real increases in competitive 

and special-grant programs, and these are both often topically oriented. To 

examine the impacts of these funding changes on the resulting portfolio of 

public-research results, we fi rst consider overall changes in SAES and intramural research individually in some detail.
4

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About the Data

Data for this report have been obtained primarily from the Current Research 

Information System (CRIS—see following section) maintained by USDA’s 

Cooperative State Research, Education, and Extension Service (CSREES). 

CRIS is the only data source that compiles information on public agricultural research expenditures from all sources, and it covers public agricultural 

research expenditures for the longest period of time. The data in CRIS are 

based on reports by the institutions making the research expenditures, not by 

the institutions providing the funds. In some cases information from research 

performers might differ from information from funding sources, but the 

CRIS data are useful because they are the least fragmentary. Nonetheless, 

there are some gaps in the CRIS data, notably in certain years for Federal 

agricultural R&D agencies. Therefore, data for aggregate Federal agricultural R&D expenditures have also been supplemented with information from the National Science Foundation’s Federal Funds for Research 

and Development series or obtained from budget personnel at the Federal 

agencies. Dollar amounts have been converted to real 2000 dollars using a 

research defl ator (see page 6).

The charts in this report are of three basic types (table 1). The fi rst six 

charts provide background information, and the notes indicate the sources, 

including CRIS, from which the data are taken, as well as the time period 

covered. The bulk of the analysis in the report uses two types of CRIS-based 

data. Time series charts cover the period 1980-2005, and they are constructed 

with CRIS data for many different types of public agricultural research 

funding, taken from published reports. They are supplemented where necessary with information from other sources, such as the National Science 

Foundation and USDA agency budget directors. The other charts compare 

research topics (e.g., crops, livestock, environment, etc.), research types 

(e.g., basic, applied, and developmental) for different means (e.g., formula 

funding, competitive grants, or special grants) by which USDA funds 

the SAES. These data compare the years 1998 and 2003. They were also 

obtained from CRIS, but through special queries that allowed disaggregation 

below the levels found in published data. There are several reasons for the 

narrower focus. First, even though USDA funding to the SAES has become 

a smaller part of public agricultural research, it is often viewed as a leading 

indicator of Federal research policy. Second, defi nitional changes within the 

CRIS system, for example concerning “research problem areas” or “knowledge areas” make it harder to ensure strict comparability for years before 

1998 or after 2003 (see page 5).

Table 1

Approaches to public agricultural research expenditures used in this report

Type of Uses CRIS data from published Uses CRIS data from Time period Charts

fi gure reports, with supplementation specialized queries

Background Yes No Varies 1-6

Time series Yes No 1980-2005 7, 14, 15

Comparison of 

 means by which

 USDA funds the SAES No Yes 1998, 2003 8-13, 16-19
5

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The Current Research Information System

CRIS is USDA’s “documentation and reporting system” for ongoing and 

recently completed research and education projects in agriculture, food 

and nutrition, and forestry. Projects are conducted or sponsored by USDA 

research agencies, State Agricultural Experiment Stations (SAES), the State 

land-grant university system, other cooperating State institutions, and participants in a number of USDA-administered grant programs. The CRIS system 

is maintained by USDA’s CSREES. Data in the CRIS system are based on 

information received from the institution performing the research.

CRIS reports public agricultural research expenditures in the United States, 

regardless of the source of the funds. Industry-sponsored research performed 

by a SAES would be recorded in CRIS, but agricultural research funded and 

performed by the private sector would not.

CRIS’ predecessor, the Inventory of Agricultural Research, dates back to 

1966. Like CRIS, the Inventory of Agricultural Research was maintained 

by CSREES and its predecessor agency, the Cooperative State Research 

Service. Printed reports were made available through fi scal year 1997. The 

CRIS system is now Web-accessible at http://cris.csrees.usda.gov. Summary 

reports on the Web can be found for FY1993 on.

Standard data breakdowns are by institutional research performers (SAES, 

USDA agencies, other cooperating institutions) and by funding sources. 

Different sources of funds for public agricultural research include appropriations by USDA for research performed by USDA agencies; CSREESadministered funds for SAES research; other USDA funds (contracts, grants, 

and cooperative agreements between SAES and USDA research agencies); 

other Federal monies, (contracts and grants between SAES and Federal agencies such as the National Institutes of Health (NIH), the National Science 

Foundation (NSF), and the U.S. Department of Energy (DOE)); State appropriations; and other non-Federal sources, which include both support from 

private industry for SAES research and income from product sales.

Since the Inventory of Agricultural Research was created, there have been 

three primary research classifi cation schemes through which the data have 

been broken down in publicly reported documents:

1. Although defi nitions have changed over time, classifi cation of research 

expenditures by “commodity” in earlier reporting periods and by 

“subject of investigation” in more recent reporting periods refer not only 

to traditional agricultural commodities such as wheat or beef cattle, but 

also to technology areas not associated with specifi c commodities, such 

as “watersheds,” “machinery,” or “the farm as an enterprise.”

2. Classifi cations by “problem area,” “research problem area,” or 

“knowledge area” (the most recent CRIS term) refer to subjects such 

as “management of range resources,” “plant genetic resources,” 

“animal diseases,” and “quality maintenance in storing and marketing 

of food products.” These defi nitions and categories, too, have changed 

over time.
6

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3. A third means of disaggregating the CRIS data is by “fi eld of 

science”—biochemistry, genetics, immunology, engineering, statistics, and so on. It is possible to disaggregate CRIS data in other ways, 

but in some cases this would need to be done through a special query 

submitted to CRIS personnel, as the disaggregation would not be 

reported in standard tables.

Creating a Research Expenditure Defl ator

Price defl ators correct for the effect of infl ation on expenditures. It is diffi cult 

to use defl ators in relation to research because research has substantial fi xed 

costs that should be allocated across several or more periods. Not even all 

fi xed costs are equal, with expenditures on computer hardware and software 

or Internet connections having substantially different impacts today than they 

did 5 or 10 years ago. Laboratory space has a more stable impact on research, 

but it might take 15 or even 30 years for some research investments to pay 

off. With these diffi culties in mind, the (unpublished) updated research price 

defl ator used in this report was constructed based on Klotz et al. (1995) and 

Pardey et al. (1989).
7

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Public Agricultural Research 

as a Federal-State Partnership

The public agricultural research system in the United States comprises 

a Federal-State partnership. The Federal Government funds intramural 

agricultural research at three USDA agencies—the Agricultural Research 

Service (ARS), the Forest Service (FS), and the Economic Research Service 

(ERS). ARS, the largest of the three, conducts research on crop and livestock 

production and protection, human nutrition, and the interaction of agriculture 

and the environment.

FS administers programs for applying sound conservation and utilization practices to natural resources of the national forests and national grasslands. FS 

also promotes these same practices on all forest lands through cooperation with 

States and private landowners, and by carrying out forest and range research.

ERS provides economic research and information for public and private 

decisionmaking on economic and policy issues related to agriculture, food, 

natural resources, and rural America.

The Federal Government also funds extramural research at State institutions, 

which include SAES that are housed at land-grant universities, 1890s institutions, forestry schools, and veterinary colleges, as well as other cooperating 

institutions that are not part of the SAES. Although CSREES-administered 

funds are a very important component of SAES funding, since 1980 the 

proportion of SAES expenditures that are CSREES-administered has been less 

than 20 percent. The State institutions are funded by a combination of Federal, 

State, and private sources, which will be outlined in further detail below. 

This decentralized State-led structure has resulted historically in geographically specifi c applied research. Federal research funding, on the other hand, is 

intended in part to promote basic research and to promote interstate research 

spillovers. There are two reasons for the Federal Government to maintain a 

strong intramural research program:3

1. The effectiveness of the State-led system depends on regional and interregional coordination that is provided by intramural USDA research.

2. There are research problems that are important nationally that may 

receive minimal attention from SAES or regional research programs 

and so need to be addressed by intramural USDA programs (Fuglie et 

al., 1996; Huffman and Evenson, 2006a).

Figure 3 outlines schematically the fl ow of all research funds, public and 

private, from sectors that supply resources to the sectors that perform or 

coordinate the R&D. Indicator data are for 1998, the last year for which estimates of private research expenditures are currently available.

Figure 4 further disaggregates public agricultural research expenditures by 

funding source for 2005. In this year, USDA intramural research made up 29

percent of the public expenditure total. Combining this amount with USDA 

funds supplied to the States, USDA funded 43 percent of all public research. 

 3Federal funding of extramural research that explicitly addresses Federal 

research goals can also address these 

concerns. In particular, CSREES competitive grants can be used to encourage non-Federal researchers to address 

national problems.
8

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The SAES and other cooperating State institutions (OCIs) were responsible 

for over 70 percent of total public agricultural R&D expenditures. The single 

largest source of these funds was State appropriations, but USDA funds, 

funds from other Federal agencies, and funds from the private sector all 

contributed to State-level spending.

Funding of agricultural R&D undertaken at State-level institutions is further 

disaggregated in fi gure 5. This fi gure excludes Federal intramural spending 

(mostly at ARS), but includes all sources of funding for agricultural R&D at 

State-sponsored research facilities or other non-Federal institutions (jointly 

considered State-level research in this report). Note that the percentages for 

Figure 3

Sources and flows of funding for agricultural research in 1998

(nominal dollars)

Source: USDA, ERS (update of fig. 3, p. 9, AER-735, K. Fuglie et al., 1996) and CRIS.

Federal

$1,517 million

USDA

$787 million

SAES and cooperating institutions

$2,386 million Industry

$4,560 million

States

$1,143 million

Private sector

$5,074 million

$733 million $510 million

$4 million

$1,143 million

$4,560 million

$783 million

Figure 4

Distribution of all public agricultural research expenditures 

(USDA inhouse and State) in 2005, by funding source (nominal dollars)

*Approximately 4 percent of USDA research funding comes from non-USDA sources.

Source: USDA, CRIS.

USDA in-house R&D*

$1,334 million

USDA funding of 

State-level R&D

$668 million

Federal agencies 

(non-USDA)

$678 million

State appropriations

$1,264 million

Industry and sales and 

other non-Federal

$695 million 15%

14%

15%

27%

29%
9

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45 

Economic Research Service/USDA

each spending source are based on total public agricultural R&D spending 

and match those reported in fi gure 4. 

USDA Funding of State Agricultural Experimental 

Stations Remains Important

USDA funding of the SAES has been important historically and is still 

central to today’s research policy debates because that funding is considered 

an indicator of national agricultural science policy (Huffman and Evenson, 

2006a). Much of the USDA funding of State-level research is administered 

by CSREES through formula funds, special grants, or competitive grants, 

as well as through a variety of other funding options. These three funding 

sources are discussed in particular detail in this report. In addition, other 

USDA agencies sponsor State-level research through contracts, grants, and 

cooperative agreements.

Historically, most USDA extramural research funding to the States has gone 

to the SAES. In 2005, just under 8 percent of USDA extramural funding 

went to non-SAES institutions, which can also be identifi ed by the States in 

which they are located, and so are included in State-level research. The only 

other funding source contributing notable amounts to agricultural research 

at non-SAES institutions consisted of Federal agencies other than USDA. In 

2005, about 2.5 percent of this non-USDA Federal money did not go to the 

SAES, but to other cooperating institutions.

Just as with USDA funding, some of the other funding of State-level research 

can be disaggregated. For example, private support of State-level agricultural 

research comes through self-generated funds, such as product sales, as well as 

from industry research agreements and other, unspecifi ed non-Federal sources.

CSREES formula funds $222 million

CSREES special grants $99 million

CSREES NRI competitive grants $89 million

Other CSREES $117 million

Other USDA $142 million

Federal agencies (non-USDA)

$678 million

State appropriations

$1,264 million

Self-generated 

$189 million

Industry agreements 

$247 million

Other non-Federal $259 million

Figure 5

Distribution of all State-level public agricultural R&D expenditures 

in 2005, by funding source* (nominal dollars)

*Percentages refer to percent of total public agricultural R&D expenditures, Federal level 

and State level, and so do not sum to 100 percent. USDA inhouse R&D expenditures—

accounting for 29 percent of total public expenditures—are not represented in this figure.

Source: USDA, CRIS.

5%

14%

27%

4% 3%

2%

2%

2% 5% 5%
10

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Mission Areas Have Remained the Same, 

Specifi c Crop Research Has Changed

USDA’s mission, among others, is to provide public-research leadership in 

many areas “from human nutrition to new crop technologies that allow us to 

grow more food and fi ber using less water and pesticides” (www.usda.gov). 

These mission areas have remained the same over recent decades, but the 

specifi c commodity focus of research can change depending on the comparative advantages of U.S. and foreign producers, as well as contemporary 

issues. Public and private research both contribute, but in different ways, 

with public research more likely to provide advances on topics with limited 

or at least not immediately apparent marketable potential. The ARS Offi ce of 

Technology Transfer exists to help move ARS research, most notably from 

applied and developmental projects, toward private development when the 

potential exists. 

The SAES conduct most public agricultural research. Total real expenditures 

by the SAES have trended upward since 1980 while real Federal intramural 

agricultural research expenditures fell slowly until the late 1990s (fi g. 6). 

Between 1997 and 2003, real intramural expenditures bounced back 25 

percent before leveling off in 2004, then falling in 2005.4 Even with the late 

increase in intramural spending, real spending at the State level was more 

than 2.3 times higher ($2.72 billion vs. $1.17 billion) than spending by the 

Federal intramural agencies in 2005. In 1980, the ratio of SAES to intramural 

research was 1.7 times as much ($2.11 billion vs. $1.25 billion).

The Federal Government is by far the single largest source of public agricultural research funding. From 1997 to 2004, real Federal research money grew 

by about a third, due in part to increases in the amount of non-USDA Federal 

funds obtained by the States, the recovery in USDA intramural funding just 

mentioned, and a slight recovery in total CSREES-administered funds (but not 

formula funding) in the most recently documented years. Total Federal investment in R&D did decline in 2005, the most recent year for which data are 

available, but it was still 24 percent greater than the 1997 level in real terms.

 4The decline in real Federal-level 

expenditures between 2004 and 2005 

was caused by a combination of a 

decline in nominal expenditures and 

an increase in the R&D defl ator.

Figure 6

Public agricultural research spending, 1980-2005

Billion dollars (constant 2000 dollars)

Source: USDA, CRIS; National Science Foundation, Federal Funds for Research 

and Development.

1980 82 84 86 88 90 92 94 96 98 2000 02 04

0

0.5

1.0

1.5

2.0

2.5

3.0

Federal-level spending

State-level spending
11

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Funds appropriated by State legislatures declined in real terms in the early 

1990s, and declined again after 2000. State appropriations were still the 

largest source of SAES expenditures, but they fell by 16 percent in constant 

dollars between 2000 and 2005 and were lower in real terms in 2005 than 

they were in 1980. Part of the explanation for this could be that part of the 

State appropriation was a match component to federally provided formula 

funds that were administered by CSREES (see box, “Formula Funds,” p. 14). 

Formula funds remain the largest source of USDA agency support for the 

SAES. Formula funds declined from around $350 million in the early 1980s 

to $182 million by 2005 (constant 2000 dollars) (fi g. 7). 

The SAES managed to offset declines in legislative funding through 

increases from two major sources. Between 1980 and 2005, private contributions to SAES through industry agreements, sales, and other non-Federal 

sources grew by over 70 percent to a real level of $571 million. The other 

expanding source of SAES funding was other Federal (non-USDA) funds, 

which more than tripled between 1980 and 2005. Nearly 60 percent of this 

increase occurred after 1998. In 2005, real SAES funding from other Federal 

sources, $557 million, was almost identical to the $571 million received from 

industry and other non-Federal sources. It is worth noting that each of the 

SAESs had its own mix of these sources and each had more or less reliance 

on competitive sources of funding. 

Though declining formula funds remained the largest component of 

CSREES- administered funds at over 40 percent in 2005, all three of the 

other CSREES funding mechanisms showed real increases after 2000 (fi g. 

7). Other nonspecifi ed CSREES-administered funds rose the most, but 

competitive National Research Initiative (NRI) grants, and special grants 

(which are congressionally awarded funds) also showed increases. Other 

nonspecifi ed CSREES-administered funds are mainly competitively awarded 

and include funding for aquaculture centers, integrated activities under 

Section 406 legislative authority, and other legislative authorities, such as 

the International Science and Education Grants Program (J.H. Bahn, D. 

Figure 7

CSREES-administered funds, 1980-2005 

Million dollars (constant 2000 dollars)

 SBIR = USDA’s Small Business Innovation Research.

Note: Some categories in fiscal year (FY) 1980 and FY 1981 are estimated 

from more aggregated data.

Source: USDA, CRIS; ERS agricultural research deflator.

1980 82 84 86 88 90 92 94 96 98 2000 02 04

0

50

100

150

200

250

300

350

400

Formula funds

Special grants

Competitive grants Other (including SBIR)1

1 
12

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Unglesbee, personal communications, 2007).5 These funds include the Food 

and Agriculture Defense Initiative, which may be one reason for the increase 

in the mid-2000s.

USDA’s Small Business Innovation Research (SBIR) program, which we 

have included with the “other” category, is a different, small-scale competitive-grant program that awards grants to American-owned and independently 

operated for-profi t businesses of 500 employees or fewer. There are SBIR 

programs at 10 other Federal agencies, and these agencies are required to 

apply 2.5 percent of their extramural research dollars toward small businesses. Since its inception in 1988, the USDA SBIR program has awarded 

over 1,700 project grants.6

 5Section 406 is a funding vehicle for 

programs in the CSREES that integrate 

research, education, and extension.

 6Phase I SBIR grants are limited to 

no more than $80,000, and Phase II 

SBIR grants to no more than $350,000. 

USDA’s total SBIR funds each year 

have averaged less than $3 million 

annually since 1991. Other unspecifi ed CSREES-administered funds, with 

which they have been grouped here, 

were also low until 1997, after which 

they rose.
13

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Recent Institutional Changes 

and Trends in Funding

The public-policy debate concerning the levels, emphases, and mechanisms of public agricultural research funding provides a context for the 

data summarized in this report. This debate has long been a feature of the 

funding process. Many of the arguments infl uencing the debate over the 

period covered in this report stem from reports from the National Academy 

of Sciences (1972) and the Rockefeller Foundation (1982). These reports 

advocated a shift away from geographically specifi c applied research 

toward more basic biological research and an increase in peer-reviewed 

and competitively funded agricultural research. National Research Council 

publications in 1994 and 2003 continued to back increases in basic research 

and in competitive funding.

Pros and cons of various agricultural research funding mechanisms, 

including competitive grants and formula funds, have been discussed by 

Alston and Pardey (1996) and Day Rubenstein et al. (2003). Huffman 

and Evenson (2006b) also discussed the relative merits of these two 

mechanisms, but, in contrast to the National Academy or the Rockefeller 

Foundation, they argued that transaction costs severely limit the effectiveness of competitive funding instruments.

Policy proposals have continued to stress competitive funding, fundamental 

agricultural research, and research aimed at broad national goals. One 

approach for increasing competitive allocations has been to propose greater 

emphasis on competitive grants within existing authorizations. However, an 

important recent change to research policy has been the proposed combination of changed funding mechanisms with institutional reorganization 

through the creation of a National Institute to fund extramural agricultural 

research, primarily through competitive grants.

For example, in 2004, the Research, Education, and Economics Task Force 

at USDA, composed of experts from academia and from USDA, developed a proposal for such an institute. As envisioned, the mission of this 

institute would be to support fundamental agricultural research with a goal 

of increasing the international competitiveness of American agriculture. 

The primary funding mechanism of the proposed institute was to award 

new competitive peer-reviewed grants that would be in addition to existing 

competitive public research funding.

The Food, Conservation, and Energy Act of 2008 (the 2008 Farm Act) 

states that the Secretary of Agriculture shall establish a National Institute for 

Food and Agriculture. As stated by the Act, NIFA will administer research 

funds and programs formerly administered by CSREES. NIFA will replace 

CSREES as of October 1, 2009. The Act also authorizes $700 million in 

competitive grants under the Agriculture and Food Research Initiative, to be 

administered by NIFA. This, however, is authorized funding; past competitive funding instruments such as the NRI, discussed below, have been authorized at higher levels than have been appropriated for actual spending.
14

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Competitive Grants and Competitive Funding 

in the CRIS System

Public policy discussion in agricultural research funding has frequently 

considered what percentage of public-research funding should be committed 

to basic research, and what percentage should be competitively awarded. One 

policy response to these ongoing discussions has been to increase competitive grants funding through CSREES. Analysis of competitive grants funding 

(Day Rubenstein et al., 2003; Huffman and Evenson, 2006b) has focused 

on CSREES-administered competitive grants. These grants were initiated 

in 1978, grew somewhat in funding in the mid-1980s, and received an additional boost after 1991 through National Research Initiative (NRI) funding.

It is diffi cult to identify competitive research funding for agriculture outside 

of named programs such as the NRI. Both sources and performers of public 

agricultural research in the United States are numerous. Some aspects of 

competitive grants (e.g., peer review) are applied in other areas of public 

research funding. And it is certainly conceivable that more full-fl edged 

competitive processes could be applied at times to funding sources outside 

In addition to competitively awarded funds, a major source of funding for 

public research provided by USDA’s Cooperative State Research, Education, 

and Extension Service comes from formula funds. These Federal funds provide 

support for research and extension activities at land-grant institutions and are 

appropriated to the States on the basis of statutory formulas that have changed 

only infrequently, as the result of legislation. Eligibility is limited to cooperating 

institutions, which are mainly 1862, 1890, and 1994 land-grant institutions. 

Hatch Act formula funds support the State Agricultural Experiment Stations. SAES 

are required to provide matching funds at least equal to the federally appropriated 

Hatch funds for that State. A certain portion of these funds are allocated to a 

multistate research fund that provides money for cooperative research employing 

multidisciplinary approaches conducted by the SAES, working with other SAES, 

the Agricultural Research Service, or a college or university, to solve problems 

that concern more than one State.

Evans-Allen Program formula funds support 1890 land-grant institutions. 

Recipients of these funds must also provide a 50-percent match from non-Federal 

sources. McIntire-Stennis formula funds support State-designated institutions’ 

cooperative forestry research programs.

Animal Health formula funds support research into the prevention and control of 

animal diseases that affect agricultural productivity. The Smith-Lever Act provides 

Federal formula funds through the Cooperative Extension Service for cooperative 

extension activities. The law requires that States provide a 100-percent match 

from non-Federal sources. Formula funds also support extension activities through 

Extension Programs for 1890 Institutions, the Renewable Resources Extension 

Act. Formula funds are also provided for education activities through the Tribal 

College Endowment Interest Program.

Formula Funds
15

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the NRI. In the time frame we are considering, expenditures from the 

CSREES-administered NRI program can be tracked most consistently over a 

relatively lengthy time period.

However, in addition to the NRI program, CSREES competitively funds 

research for 20 other initiatives, including aquaculture centers; the 

International Science and Education Grants Program, which includes the 

Food and Agriculture Defense Initiative; disadvantaged farmers; 1890s institutions (historically black universities); and small business research under 

the SBIR program. By far the most likely additional source to be primarily 

competitive in nature would be funds received by the SAES from non-USDA 

Federal sources. In many cases, SAES have also received funding from 

Federal agencies such as the National Institutes of Health, the Department of 

Energy, the National Science Foundation, and so on, likely obtained through 

a competitive process. Such funds are not explicitly listed as “competitive” in 

the CRIS system.

Basic and Applied Research 

in the CRIS System

Students of science and science policy have often attempted to distinguish 

between fundamental (“basic”) research and applied research. The fi rst 

defi nitions below are grounded in the linear model, in which research is 

conceptualized as fl owing from basic or fundamental research to applied 

research (Bush, 1945). Almost from the time Vannevar Bush formalized this 

model, the model has been under criticism and revision as an inadequate 

representation of how scientifi c progress and practical applications are made. 

Nonetheless, the distinction between basic and applied research continues to 

be part of ongoing debates over science policy.

Basic research is sometimes considered to have the primary objective of 

advancing knowledge and understanding the relationships among variables. 

It may be thought to be driven by the researcher’s curiosity, and conducted 

without a practical end in mind. It may have unexpected results pointing 

to practical applications, although they are not the focus of the research. In 

any case, basic research provides the underpinning for further research, both 

basic and applied.7

Applied research is performed to solve specifi c, practical questions. Its principal purpose is not to gain knowledge for its own sake. It is often considered 

to be founded primarily on basic research.8

“Development” or “developmental” research refers to activities that are even 

closer to the production of a marketable product or process. It can be defi ned 

as systematic application of knowledge directed toward the production of 

useful materials, devices, and systems or methods. This can include the 

design, development, and improvement of prototypes.

The linear model has been subject to a number of criticisms. In fact, most 

representations of the linear model do not envision a stark distinction 

between basic and applied research, but rather indicate a continuum fl owing 

from the most basic to the most applied research. Some observers have 

also noted that there are often feedbacks from applied to basic research. In 

 7The Food, Conservation, and Energy 

Act of 2008 defi nes “fundamental” 

research as research that “(i) increases 

knowledge or understanding of the 

fundamental aspects of phenomena and 

has the potential for broad application; 

and (ii) has an effect on agriculture, 

food, nutrition, or the environment.” 

Note that the fi rst part of the defi nition 

is similar to our discussion here; the 

second part actually specifi es the sectors of application.

 8The 2008 Act defi nes applied 

research as “research that includes expansion of the fi ndings of fundamental 

research to uncover practical ways in 

which new knowledge can be advanced 

to benefi t individuals and society.”
16

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Economic Research Service/USDA

attempting to solve certain practical problems, scientists at times have to 

revisit fundamental scientifi c questions. 

Yet other students of science have argued that there is no strict association 

between a motivation of fundamental understanding and a motivation based 

only on curiosity, devoid of considerations of use. Stokes (1997) proposed a 

quadrant model:

Research is inspired by:

At times, a distinction between basic and applied research has been made 

based on the amount of time between research and reasonably likely practical 

applications. But once again, the study of any particular research development usually shows that the “paths between scientifi c discovery and new 

technology” are “multiple, unevenly paced, and nonlinear” (Stokes, 1997).

Whatever model of basic and applied research is chosen, agricultural 

research would not be categorized as the most pure basic research. As with 

many other research areas, for example, biomedical research, almost by defi -

nition agricultural research is conducted with considerations of use. Although 

fundamental biological, chemical, or physical insights are required, application to a particular economic activity, agriculture, is intended. However, as 

noted in this report, a number of observers have believed for some time that 

future progress in agricultural science is dependent on a greater emphasis on 

basic biological understanding.

When measuring basic and applied research, the CRIS database relies on a 

simple scheme. For each public agricultural research project, respondents to 

the CRIS questionnaire are asked to indicate the percentage of each project 

devoted to basic research, the percentage devoted to applied research, and 

the percentage committed to development effort. (As noted, “development 

effort” would refer to research that is not only designed to answer a practical question, but is also intended to yield a feasible product or process.) 

This method is not without problems. For example, different researchers 

might divide the same research project into basic and applied components in 

different ways. Researchers might also tend to rank their projects differently 

depending on whether they thought basic or applied research was more likely 

to receive funding. We have assumed in this report that researchers have 

tended to classify their projects consistently over time.

Considerations of use?

No Yes

Quest for 

fundamental 

understanding?

Yes

Pure basic 

research

(Bohr)

Use-inspired 

basic research

(Pasteur)

No

* Pure applied 

research

(Edison)

* Research that “systematically explores particular phenomena 

without having in view either general explanatory objectives or any 

applied use to which the results will be put.”

Source: Based on Stokes, 1997.
17

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Alternative means of determining which research projects (or components 

of research projects) are basic, applied, or developmental would add signifi -

cantly to the cost of data development, however. For example it might be 

possible to design an index of “basicness” calculated on predetermined 

criteria, or to make the determination by a single, centralized committee 

rather than relying on project-by-project respondents.

It is possible to regard the attribution of public agricultural research expenditures in the CRIS system to basic, applied, or developmental research, 

based on self-reporting, as a proxy variable for the “true” division among 

these three categories. Trends in the reported amounts of basic, applied, 

and developmental research are likely correlated with the trends that would 

be recorded with some more elaborate means of measurement. This is the 

assumption made in this report.
18

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Shifts to Competitive Awards 

and the Limited Impact on Basic 

Agricultural Research

The largest part of the USDA competitive-grants program is the NRI, which 

is administered by CSREES. The highest funding priorities for this program 

are (1) fundamental and mission-linked research, and (2) integrated research, 

education, and extension proposals that address national and regional 

agriculture and forestry issues (http://www.csrees.usda.gov/fo/fundview.

cfm?fonum=1112). Figure 7 shows that expenditures from NRI, as reported 

by funded institutions, leveled off in real terms at less than $100 million after 

the mid-1990s. Particularly in the last years covered by Figure 7, USDA 

budget summaries record considerably larger amounts allocated under NRI 

than were reported by recipients to the CRIS system. For example, in 2006, 

the USDA budget summary indicated nominal NRI outlays of $181 million, 

or $145 million in real (2000) dollars.

There are over 20 other CSREES-administered competitive-grants programs 

that focus on sustainable and organic agriculture, socially disadvantaged 

producers, the 1890 institutions, and other initiatives. Some of the other 

sources of public agricultural research funding, in particular, money from 

non-USDA Federal sources, may be competitively awarded, but the NRI 

and other competitive programs have been the main source of competitivegrant funding aimed specifi cally at agriculture (see previous chapter section, 

“Competitive Grants and Competitive Funding in the CRIS System”).

Using the CRIS database maintained by CSREES, in this section we examine 

in detail individual research topics addressed and determine whether the 

research was more basic or applied in nature, for formula funding, competitive funding, and special grants (see previous chapter section, “Basic and 

Applied Research in the CRIS System”). Research-topic areas are aggregates 

of “knowledge areas” previously defi ned as “research problem areas” in the 

CRIS Manual of Classifi cation.9 Comparisons are made between 1998 and 

2003 because the CRIS classifi cation system changed between 1997 and 

1998, and changed again between 2004 and 2005. Although there is overlap 

and it is possible to “crosswalk” some data between older research problem 

areas and newer knowledge areas, a comparison between 1998 and 2003 is 

more defensible than a comparison over a longer period of time.10

These data show that for both basic and applied formula-funded research, 

plant and animal systems (broadly defi ned as commodities research) receive 

the most funding. As can be seen in fi gures 8 and 9, natural resource and 

environmental topics are not far behind, but constant-dollar funding for all 

three topics declined between 1998 and 2003.11

Data on NRI competitive funding for basic and applied topics (also reported 

to CRIS) show that the same three topics are emphasized, with some differences.12 As can be seen in fi gure 10, between 1998 and 2003 competitive 

funding for basic nutrition and food safety research more than doubled, 

while fi gure 11 shows that, for applied competitively awarded nutrition/food 

safety research, the increase was even more dramatic. The overall increase in 

 9If research topic areas are aggregated 

for formula funds and aggregated over 

basic, applied, and developmental research, the total equals the formula-funds 

total. This also applies to other funding 

mechanisms such as competitive grants.

 10A “crosswalk” table is a table that 

indicates a rough relationship between 

old categories and new categories. 

The relationship is not exact, however, 

because there is not a one-to-one relationship; furthermore, new categories may be 

added or old categories dropped entirely.

11These allocations of formula funds 

to topic areas refl ect, in part, SAES 

priorities. However, formula funds 

comprise four separate legislative 

instruments, and in some cases are 

directed to specifi c research areas such 

as forestry or animal diseases.

 12CSREES has potentially more infl uence over the research areas funded 

by NRI competitive funding than it 

does over the areas funded by formula, 

through CSREES’s choice of NRI topic 

areas and its selection of review panels. 

CSREES National Program Leaders 

seek stakeholder input on Requests for 

Proposals in all competitive funding 

programs and also review and approve 

each submitted proposal for formulafunding (J.H. Bahn, personal communication). However, the SAES and other 

cooperating institutions also play a role, 

as they choose the areas for which they 

write research proposals.
19

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Economic Research Service/USDA

competitive awards (especially in 2002-03) shows up here as well, with plant 

and animal systems and environmental topics showing increases between 

1998 and 2003. However, in these generally better-funded topics, real 

funding for competitively fi nanced basic research declined slightly over this 

period, while real funding for applied research increased. Day Rubenstein 

et al. (2003) argued that, up to 1997, research funded by CSREES competitive grants was more basic than research funded through other CSREES 

instruments. These more recent data provide evidence that suggests that in 

this later period there may have been a partial shift from basic to applied 

research in competitive grant funding. An example of this shift can be found 

in the 2003 startup of the NRI-integrated Research, Education, and Extension 

Program.

Figure 8

CSREES-administered basic formula funds spent by SAES 

by topic area

Source: USDA, CRIS.

Research support, administration

Family and community systems

Human nutrition, food safety

Economics, markets, and policy

Food processing, delivery

Engineering and support systems

Animals and their systems

Plants and their systems

Natural resources and environment

Million dollars (constant 2000 dollars)

2003

1998

0 10 15 20 25 30 35 40 5

Figure 9

CSREES-administered applied formula funds spent by SAES, 

by topic area

Source: USDA, CRIS.

Research support, administration

Family and community systems

Human nutrition, food safety

Economics, markets, and policy

Food processing, delivery

Engineering and support systems

Animals and their systems

Plants and their systems

Natural resources and environment

Million dollars (constant 2000 dollars)

0 5 10 15 20 25 30 35 40

2003

1998
20

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As we have noted, the largest component of the SAES portfolio (State appropriations) has declined in real terms since 1990. USDA funding through 

CSREES-administered formula funds has fallen at least since 1983. Declines 

in formula allocations have been somewhat offset by increases in competitive funding and congressional special-research projects. There does appear 

to have been some shift from basic to applied research approaches, but 

this distinction may or may not be linked to funding mechanisms. This is 

notable as competitive funding was originally intended to support more basic 

research or “the development of fundamental scientifi c knowledge important to agriculture” (NRC, 1994, p.13). The evidence through 2005 does not 

Figure 10

CSREES-administered basic competitive grants spent

by SAES, by topic area

Source: USDA, CRIS.

Research support, administration

Family and community systems

Human nutrition, food safety

Economics, markets, and policy

Food processing, delivery

Engineering and support systems

Animals and their systems

Plants and their systems

Natural resources and environment

Million dollars (constant 2000 dollars)

2003

1998

0 5 10 15 20 25

Figure 11

CSREES-administered applied competitive grants spent 

by SAES, by topic area

Source: USDA, CRIS.

Research support, administration

Family and community systems

Human nutrition, food safety

Economics, markets, and policy

Food processing, delivery

Engineering and support systems

Animals and their systems

Plants and their systems

Natural resources and environment

Million dollars (constant 2000 dollars)

2003

1998

0 10 15 20 25 5
21

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Economic Research Service/USDA

support the hypothesis that a shift toward more competitive-grant funding for 

agriculture has led to greater emphasis on basic research.

Agricultural biotechnology is sometimes described as a type of basic agricultural research (Traxler, 1999). Whether measured by issued patents, fi eld 

trials of genetically engineered crops, or adoption of such crops, investment and product development in agricultural biotechnology has accelerated more rapidly in recent years than other areas of agricultural research 

have (Fernandez-Cornejo and Caswell, 2006; Heisey et al., 2005). But even 

here, the complexity of defi ning basic research and the empirical record do 

not support a clear picture. Pelletier (2006) examined the same CRIS database discussed previously and determined that 3,041 biotech projects were 

awarded on plants between 1994 and 2002. The main fi nding of the study is 

that “transgenic research has overwhelmingly emphasized technology application over basic ... research.” Several of these factors may be reinforcing 

an overall movement toward applied public research, and this trend will be 

re-examined later along with consideration of recent changes in developmental research funding. 

The Focus of Special Grants

Special grants are congressionally earmarked funds that are awarded for 

both basic and applied agricultural research topics. CRIS data are available on topics addressed by this source of funding. There were increases in 

special grants between 1998 and 2003 in all topic areas except for applied 

economics research. For both basic and applied special grants, the largest 

increases were in plants and their systems—research spending on applied 

plant systems increased by over a third in real terms. Special-grants funding 

of basic research in food processing, economics, and nutrition also increased. 

These increases mirrored, to some extent, decreases in formula-funded 

basic research on plants, food processing, economics, and nutrition. Thus, 

Figure 12

CSREES-administered basic special grants spent by SAES, 

by topic area

Source: USDA, CRIS.

Research support, administration

Family and community systems

Human nutrition, food safety

Economics, markets, and policy

Food processing, delivery

Engineering and support systems

Animals and their systems

Plants and their systems

Natural resources and environment

Million dollars (constant 2000 dollars)

2003

1998

0 1 84 2 16 20
22

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Economic Research Service/USDA

increases in special grants as well as in competitive grants have somewhat 

offset decreases in formula funding for basic research in these topic areas. 

Scientifi c Personnel in ARS and the SAES

The largest intramural portion of the agricultural research budget is allocated 

to USDA’s Agricultural Research Service. ARS and Forest Service received 

increases in real funding in the early years of the present decade (fi g. 14). 

These monetary increases are refl ected in increases in scientist years. 

Scientist years (SYs) are calculated as staffi ng equivalent to the indicated 

number of scientists working full-time for 1 year. This trend reversed a 

general decline in USDA scientist years from 1980 to 2000 (fi g. 15), and 

is in contrast to non-USDA (mainly SAES) scientist years that remained 

unchanged over most of the same period. 

Despite decreases in real formula funding between 1980 and 2005, the SAES 

maintained stable numbers of scientists. The increase in Federal non-USDA 

funding suggests that the SAES sought out alternative funding from departments such as Energy, Defense, and Health and Human Services. Increases 

in revenue from industry agreements, as well as product sales, indicate State 

scientists were successful in their appeals to private companies. At the same 

time, SAES appear to have been less successful in getting funding increases 

from their State legislatures. From 1990 to 2005, Federal formula funds 

going to the States declined by about $85 million (real 2000 dollars), while 

State appropriations for agricultural R&D fell by nearly $285 million (real 

dollars). In other words, State-appropriated money fell by a greater amount 

than could be explained solely by a fall in matching funds.

That drop in State-appropriated money raises the question of how much 

infl uence these other Federal departments and private companies now have 

on the priorities of SAES research. Foltz and Barham (2006) found that 

Figure 13

CSREES-administered applied special grants spent by SAES, 

by topic area

Source: USDA, CRIS.

Research support, administration

Family and community systems

Human nutrition, food safety

Economics, markets, and policy

Food processing, delivery

Engineering and support systems

Animals and their systems

Plants and their systems

Natural resources and environment

Million dollars (constant 2000 dollars)

2003

1998

0 12 16 20 84
23

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45 

Economic Research Service/USDA

scientists concentrating in agricultural biotechnology tended to receive more 

National Science Foundation (NSF) and National Institutes of Health (NIH) 

funding than SAES scientists in other research areas, whereas scientists 

researching topics other than biotechnology received more funding from 

industry sources. This suggests nontraditional sources of SAES funding may 

have different effects on SAES research portfolios or that hiring decisions 

could infl uence the composition of the overall research portfolio as new 

scientists pursue funding from preferred sources. The next section considers 

how changes in SAES and intramural research might have interacted to infl uence the overall portfolio of public research since 1980. 

Figure 14

USDA agencies' research funding, 1980-2004

Million dollars (constant 2000 dollars)

*CSREES research funds are funds used to support SAES research.

ARS = Agricultural Research Service; CSREES = Cooperative State Research, Education,

and Extension Service; ERS = Economic Research Service; FS = Forest Service.

1980 82 84 86 88 90 92 94 96 98 2000 02 04

0

100

200

300

400

500

600

700

800

900

1,000

ARS

CSREES*

ERS

FS

Source: USDA, CRIS, and agency budget directors. 

Figure 15

Research scientist years at USDA and State-level institutions 

Full-time equivalents (FTEs)

Source: USDA, CRIS.

1980 82 84 86 88 90 92 94 96 98 2000 02 04

0

1

2

3

4

5

6

7

8

9

USDA

Non-USDA
24

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45

Economic Research Service/USDA

Changes in Funding Sources Interact 

To Infl uence Research Portfolios

SAES were able to maintain stable staffi ng levels from 1980 to 2005 because 

declines in formula funds were accompanied by increases in competitive and 

special grants, industry agreements, and other Federal funding. As fi gure 

14 shows, ARS is the largest intramural research agency. By agency history 

and design, the topics addressed by ARS are often similar to those addressed 

bys the SAES. ARS’s National Programs (including 1,200 research projects) are grouped by ARS into topics similar to SAES topics reported to 

CRIS/CSREES. These ARS research program areas are crop production and 

protection, animal production and protection, natural resources, and nutrition/

food safety (www.ars.usda.gov/research/programs.htm).

Given the size of the SAES research programs, it is not possible to outline 

fl uctuations in funding of individual research programs. Changes in basic 

and applied research approaches at ARS might have impacts on the research 

agenda of the SAES, but ARS has maintained a basic-research portfolio of 

just over 50 percent across all programs for most years from 1980 through 

2005. Basic research at ARS accounted for 53 to 54 percent of the total portfolio from 1980 to 2000. From 2001 to 2003, the percent in basic research 

rose to 55 percent, and for 2004 to 2006 it dropped back to 49 percent (ARS 

budget offi ce, personal communication, January 2007). 

ARS’s allocation to developmental research, which is for research on technologies that are closer to market than applied research usually is, remained 

stable at between 9 to 10 percent throughout the period. Applied research 

also remained relatively constant at between 35 and 40 percent. Thus, the 

funding ratios for basic, applied, and developmental research at ARS have 

held fairly constant. As a result, the shift from basic to applied research 

within the SAES, whether linked to funding mechanisms or not (which as 

indicated earlier is diffi cult to establish), was not offset by a shift in the opposite direction at ARS. Furthermore, an increase in near-market developmental 

research appeared to reinforce the trend toward more applied research at the 

SAES, as discussed in the next section.

Growth in Near-Market

Developmental Research

Strongly motivated to search for relevance in pursuit of funding options, 

SAES researchers and administrators have often searched for marketable 

applications for their agricultural research outputs. To track changes in developmental funding we look at changes in funding from three sources: CSREESadministered competitive grants, formula funds, and special grants. While 

developmental competitive grants were almost nonexistent in 1998, the topic 

“plants” was awarded over $500,000 (constant 2000 dollars) competitively 

for developmental research in 2003. The second-largest competitive developmental topic was nutrition, at over $300,000. Within developmental formula 

funds, two out of three of the largest topics, plants and animals, rose from 

1998 to 2003, while natural resources fell slightly. While there was growth in 

applied research overall and also growth in basic and applied special grants, 
25

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45 

Economic Research Service/USDA

special grants for developmental topics fell in all areas except nutrition and 

research support. The largest percentage decrease was in developmental plant 

systems research. The overall impact of changes in developmental funding was 

that the growth in applied SAES research was reinforced by shifts in developmental funding for the SAES (see fi gs. 16, 17, and 18). Note: the scale for fi gs. 

16-18 is from 0 to $5 million, changed from the scale for fi gs. 8 to 9 (0 to $40 

million), fi gs. 10 to 11 (0 to $25 million), and fi gs. 12 to 13 (0 to $20 million).

Figure 16

CSREES-administered developmental formula funds spent 

by SAES, by topic area

Source: USDA, CRIS.

Research support, administration

Family and community systems

Human nutrition, food safety

Economics, markets, and policy

Food processing, delivery

Engineering and support systems

Animals and their systems

Plants and their systems

Natural resources and environment

Million dollars (constant 2000 dollars)

2003

1998

0 5 4321

Figure 17

CSREES-administered developmental competitive grants spent 

by SAES, by topic area

Source: USDA, CRIS.

Research support, administration

Family and community systems

Human nutrition, food safety

Economics, markets, and policy

Food processing, delivery

Engineering and support systems

Animals and their systems

Plants and their systems

Natural resources and environment

Million dollars (constant 2000 dollars)

2003

1998

0 5 4321
26

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Economic Research Service/USDA

Figure 18

CSREES-administered developmental special grants spent 

by SAES, by topic area

Source: USDA, CRIS.

Research support, administration

Family and community systems

Human nutrition, food safety

Economics, markets, and policy

Food processing, delivery

Engineering and support systems

Animals and their systems

Plants and their systems

Natural resources and environment

Million dollars (constant 2000 dollars)

2003

1998

0 5 4321
27

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45 

Economic Research Service/USDA

Research Results May Have Additional 

Impact Through “Spillover”

The U.S. public agricultural research system is a dynamic and fl uid environment based on the creation and dissemination of agriculturally related 

knowledge. One factor that is diffi cult to control or measure, but has been 

attempted to be harnessed in some situations, is the tendency of new research 

results to “spill over”—that is, have an impact outside of the scientifi c area, 

institutional affi liation, or geographic region originally targeted, and not 

always through formal channels. Phone conversations and e-mail exchanges 

among colleagues and extension agents can disseminate research results 

before conference paper presentations, submissions to professional journals, 

or release of public research documents. Once published, research results 

can fi nd applications in unexpected places, particularly in the age of ubiquitous information technologies, as researchers often scour the Internet for 

useful information. The importance of this phenomenon for the analysis in 

this report is that public research infl uences and is infl uenced by at least three 

forms of knowledge spillover:

1. between topics and types of research funded,

2. to and from the private sector, and

3. within and between geographic regions.

The previous section considers some of the diffi culties of measuring funding 

levels for basic and applied research. The corollary to these diffi culties is that 

the impacts of basic and applied research are even harder to measure, especially when spillovers are considered. Taking the defi nitions and considerations 

in the previous section as a starting point, more basic research is generally 

considered to produce more fundamental scientifi c breakthroughs. Those 

breakthroughs in turn have the potential to spill over into a greater number of 

applications, that then could have a greater impact on agricultural productivity 

growth. This could include overlap from basic biological research that is not 

funded via traditional agricultural research sources. On the other hand, more 

geographically focused adaptive research tends to fall into the applied-research 

category and is generally considered to have less spillover potential. The 

implication is that one purpose of some competitive-grant programs (e.g., the 

National Research Initiative and the Initiative for Future Agricultural and Food 

Systems (IFAFS), run by USDA’s CSREES) has been to increase somewhat 

more basic research and the potential for spillovers on environmental problems, food safety, and nutrition research problems.

Research from other funding sources such as the private sector, however, 

may include knowledge spillovers in more applied areas. ARS’s Offi ce of 

Technology Transfer is devoted largely to moving USDA-developed agricultural technologies into private-sector markets. Examples of successful 

OTT projects include poultry vaccinations, low phytic-acid grains that reduce 

phosphate runoff from livestock operations, and the anti-cancer drug Taxol 

(National Research Council, 2003). Spillovers also come from private-sector 

funding and Federal funding sources other than USDA when they make grant 

awards and thereby help set the public agricultural research agenda. Industry 

sources, self-generated funds, and miscellaneous non-Federal funds grew 
28

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45

Economic Research Service/USDA

between 1980 and 2005 by around 70 percent, reaching $695 million in 2005. 

These non-Federal sources have their own agendas and accumulated knowledge that they no doubt bring to bear in setting new research priorities, but 

in the process of establishing common research interests or expertise, these 

sources may tend to emphasize more applied research.

The U.S. Departments of Defense, Energy, and Health and Human Services 

have all been increasing their funding of USDA research as well .In June 

2007, the Offi ce of Biological and Environmental Research in the U.S. 

Department of Energy’s Offi ce of Science and USDA’s National Research 

Initiative jointly selected 11 projects for awards totaling $8.3 million for 

biobased-fuel research, working together to promote cross-fertilization of 

ideas and expertise. “These awards continue a commitment begun in 2006 

to conduct fundamental research in biomass genomics that will establish 

a scientifi c foundation to facilitate and accelerate the use of woody plant 

tissue for bioenergy and biofuel” (http://genomicsgtl.energy.gov/research/

DOEUSDA/index.shtml). 

The fi nal type of spillovers considered, between geographic regions, can be 

infl uenced by the fi rst two types of spillovers because private companies can 

have offi ces in several regions and the SAESs are actually located in most 

States. Because the SAESs tend to do more applied research, their results may 

have fewer opportunities for spillovers. Groups such as the commodity, seed, 

and chemical industry organizations have had an impact on public spending 

on activities such as research (Esteban and Ray). Those organizations’ interest 

in specifi c research may increase regionally specifi c research and reduce spillovers because major commodities tend to be grown in individual regions and 

funding for commodity spending also tends to be region-specifi c. This regional 

focus would be an example of the more applied nature of some of the agricultural research associated with private fi rms.
29

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Economic Research Service/USDA

Conclusion

Our review of intra- and extramural public agricultural research, and the 

interaction of trends in public funding, leads to several conclusions. Policy 

recommendations from the National Academy of Sciences and the National 

Research Council (see chapter, “Recent Institutional Changes and Trends in 

Funding,” p.13) in general argued for increasing fundamental research and 

associated increasing competitive grants funding with the proposed shift of 

the public portfolio toward more basic research. Despite these policy positions, applied research appears to have received increased attention in the 

public agricultural research portfolio. Since developmental funding also grew 

over this period, the increased emphasis on applied public research meant 

decreased emphasis on basic public research.

Aggregating the data presented in fi gures 8-13 and 16-18 demonstrates 

that, as proposals for increasing competitive grants funding have suggested, 

a higher proportion of competitive grants funding in the mid-2000s was 

directed to basic research than was the case for either formula funding or 

special grants. Nonetheless, the percentage of competitive grants funding 

allocated to basic research fell from 76 percent to 65 percent between 1998 

and 2003. The percentage of formula funding devoted to basic research 

was about 40 percent over that period. The special-grant basic-research 

percentage was about 30 percent. Combined with the overall shift in the 

CSREES-administered portfolio from formula funding to competitive grants 

and special grants, the combined percentage of basic research in this portfolio 

stayed under 50 percent (fi g. 19). This aggregate reduction in the proportion 

of basic research was refl ected in an aggregate reduction in the basic research 

proportion for the majority of the topic areas, including the topics with the 

largest budgets—plant sciences, animal sciences, natural resources and the 

environment, and human nutrition and food safety.

At the same time, as traditional USDA and State sources of research funding 

to the SAES diminished, the SAES maintained or even increased real funding 

by tapping both industry and non-USDA Federal sources. These changes 

may have had an impact on the total public agricultural research balance 

between basic and applied research, although this is not directly observable 

in the data used here. The evidence presented above suggests that private 

funding tends to be directed more toward applied research, and other Federal 

funding toward basic research. 

As we have noted, the decentralized State-led structure of the system has 

tended to promote geographically specifi c applied research. The proponents 

of Federal intramural research funding usually stress basic research, research 

of national interest, a coordinating role for Federal agricultural research 

in general, and the encouragement of interstate research spillovers. Thus 

Federal research could be viewed as complementary to the applied research 

that individual State institutions and the private sector were likely to pursue. 

However, we found no evidence to suggest that Federal intramural agricultural research has become more basic to balance out some of the apparent 

shifts toward applied research at the State level. 
30

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Economic Research Service/USDA

Public policy advice has continued to stress the themes of increasing the 

proportion of basic public research and the use of competitive funding 

mechanisms. Despite these prescriptions, we found little evidence for actual 

increases in the percentages of public research expenditures devoted to basic 

agricultural research. Several propositions suggest that achieving the optimal 

amount of basic agricultural research and optimal use of competitive funding 

mechanisms will be more likely if the nature and history of agricultural 

research are taken into account:

1. Despite agreement on the importance of basic agricultural research 

and the advances in science applicable to agriculture, State legislatures 

might be more likely to appropriate funds to research that they believe 

will benefi t their State. To the extent that the same problems are shown 

to have national signifi cance, as is more commonly the case, then the 

chances for State funding only go up. As a result, changes in funding 

mechanisms or institutional design may meet with greater success if 

they recognize local aspects of research and demonstrate how more 

centralized or more basic research might lead to research solutions at 

the local level.

2. Although the history of other major Federal research investments, 

particularly at NIH, implies that competitive funding can be associated 

with more basic research, recent history suggests that this effect in 

agricultural research is more modest and can change over time. Thus, 

proposals for competitive funding as a tool to promote basic research 

might be more likely to meet their goals if additional mechanisms—

such as explicit guidelines for the nature of peer review and for focus 

on issues of basic science—are added to the competitive design. 

Changes in funding emphasis described in this report indicate that many 

successful agricultural scientists must be able to adapt their subject areas 

and research approaches to respond to new funding opportunities. The situation in public agricultural research in recent years has been one in which 

funding for basic agricultural science from competitive initiatives might have 

Figure 19

Percentage of funds devoted to basic research 

by three CSREES funding instruments

Source: USDA, CRIS.

Percentage devoted to basic research

2003

1998

Total (weighted by funds allocated

through each instrument)

Special grants

Competitive grants

Formula funds

80706050403020100
31

U.S. Public Agricultural Research: Changes in Funding Sources and Shifts in Emphasis, 1980-2005 / EIB-45 

Economic Research Service/USDA

appeared to represent the most likely opportunities for additional research 

support. The reality, as we have shown in this report, was that other sources 

of funding from both Federal non-USDA departments and private companies were at least as important as USDA competitive initiatives. The overall 

impact of these external forces on the importance given to specifi c topics in 

the public agricultural research agenda is still unfolding. One question raised 

by the fi ndings in this report must be whether this mix of funding sources is 

the one preferred in terms of the entire picture of public agricultural research 

support. Making this question even more diffi cult to answer is the fact that 

the pace and direction of basic and applied agricultural research itself is a 

function of technological developments that are evolving rapidly. 

We have tried to delineate the trends leading to this situation. As new 

competitive avenues for public research are considered, and as new organizational structures are implemented, continued attention will need to be given 

to the preferred allocation of research funds among basic and applied topics 

and to the funding mechanisms that might be used to reach that allocation. 

This report is meant to help inform that effort.
32

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