The U.S. Department of Agriculture (USDA) is responsible for conducting agricultural research at the federal level, and for providing partial support for cooperative research, extension, and post-secondary agricultural education programs in the states. This mission area of USDA is called Research, Education, and Economics (REE). In addition to research in the biological sciences, the mission also includes substantial economic data collection and analysis. The state partners are the colleges of agriculture at land grant universities in 50 states and eight U.S. territories, with their affiliated state agricultural experiment stations, schools of forestry and veterinary medicine, and cooperative extension. There also are 18 historically black land grant colleges of agriculture (the 1890 institutions) and more than 30 Native American colleges that gained land grant status in 1994 (referred to as the tribal colleges). Small grant programs have supported agricultural education at Hispanic-serving institutions, and at Alaskan and Hawaiian native-serving institutions. The omnibus farm bill enacted May 22, 2008, also extends eligibility for certain research, education, and extension programs to non-land grant institutions that offer degree programs in agriculture. USDA differs from other federal research agencies in allocating the majority of its annual research appropriation directly to in-house research (ARS, ERS, and NASS). Most federal science agencies primarily fund extramural research through a competitive, peer-reviewed grant process. The National Academy of Sciences (NAS) has recommended for more than a decade that at least 35% of total USDA research money be distributed competitively. When the Academy first made its recommendation in 1989, it determined that less than 6% of USDA's research funding was competitively awarded. In FY2006 it was approximately 14%, according to CRS calculations. The primary and longest-standing mechanisms for distributing annual federal appropriations to the colleges of agriculture at the state land grant universities are contained in the Hatch Act of 1887 (for cooperative research) and the Smith-Lever Act of 1914 (for extension activities). Formulas set forth in each of these acts determine how annual federal appropriations are divided among states. The majority of funding for state-level programs, however, comes from state appropriations, competitive grants from USDA and other federal agencies, and private industry. States are required to match Hatch and Smith-Lever formula funds; most states appropriate three to four times the federal allotment. Nonetheless, despite the fact that federal formula funds represent only a small percentage of total funding at the state level, they traditionally have been viewed by state research and extension directors as a very reliable source of support for their core programs. Congress has set the policies and authorized the funding for USDA's research, education, and extension programs as part of omnibus farm bills since 1977. Permanent authority for most of the programs resides in older laws, but the farm bill renews the authorization for appropriations. To address the challenges posed by the perceived need to increase competitive grants in agriculture, several major proposals released in advance of congressional debate on the research title recommended significant changes in how ARS and CSREES are structured and administered. In the comprehensive farm bill proposal that USDA released in February 2007, the Administration proposed to rename the Research, Education, and Economics mission area the Office of Science, and to merge ARS and CSREES into a single agency conducting both intramural and extramural programs under the leadership of a Chief Scientist. The proposal called for the current formula-funded authorities to be retained. ERS and NASS would be the other two agencies also under the Office of Science. The Administration maintained that an integration of budgets and programs would provide more efficient and effective program implementation and resource allocation. In its call for a unified budget and a single scientific agency, this proposal mirrored some of the key aspects of the land grant system's CREATE-21 proposal (see below). In Section 7404 of the 2002 farm bill ( P.L. 107-171 ), Congress commissioned a task force "to conduct a review and evaluation of the merits of establishing one or more National Institutes focused on disciplines important to the progress of food and agricultural sciences," among other things. The task force recommendations, released in July 2004, called for the formation of a National Institute for Food and Agriculture (NIFA) within USDA "to supplement and enhance, not replace, the existing research programs." The task force conceived of the NIFA as a separate entity solely for awarding competitive peer-reviewed grants, and called for an annual budget for the institute to build to $1 billion over a five-year period. The task force proposal was reflected in companion House and Senate bills prior to congressional activity on drafting a farm bill ( H.R. 2118 (C. Peterson)/ S. 971 (Bond)). The bills would have provided mandatory funds for the NIFA starting at $245 million in FY2008 and increasing to $966 million by FY2012. The National Association of State Universities and Land Grant Colleges (NASULGC) put forth a comprehensive recommendation for reorganizing the REE system after a nationwide deliberative process within the land grant system. These proposals were reflected in H.R. 2398 (Barrow)/ S. 1094 (Stabenow). The key provisions included (1) putting all of USDA's intramural and extramural research, education, and extension agencies (including the research arm of the Forest Service) under one administrative body, working with a unified budget; (2) providing $200 million annually in mandatory funds and substantial annual increases in appropriated funds (to 171.5% of the current level of $2.67 billion) in FY2012; and (3) providing opportunities for minority and smaller schools, both land grant and non-land grant, to expand their capacity for agricultural research, education, and extension. The NASULGC proposal, called CREATE-21, was widely but not unanimously endorsed by the colleges of agriculture at the land grant universities. In June 2008, the 110 th Congress completed action on the 2008 omnibus farm bill, the Food, Conservation, and Energy Act of 2008, P.L. 110-246 . This enacted legislation included aspects of proposed changes to the research title of the House-passed ( H.R. 2419 ) and Senate-passed farm bill (introduced as a substitute amendment to H.R. 2419 ). Both the House and Senate bills drew heavily on the recommendations of USDA and NASULGC. The House version called for creating, within the Office of the Under Secretary for Research, Education, and Economics, an overall coordinating organization known as the National Agricultural Research Program Office (NARPO) with six specialized directors. NARPO's six subject-area directors would work with the existing National Agricultural Research, Extension, Education, and Economics Advisory Board to coordinate and plan both the capacity and competitive programs of the REE agencies. The directors of NARPO would become the primary program leaders, incorporating the duties of the currently separate ARS and CSREES national program staffs. Additionally, the House bill called for establishing a National Institute of Food and Agriculture (NIFA) within CSREES that would oversee extramural competitive research grants only. NIFA would merge USDA's two major competitive grant programs--the National Research Initiative (NRI) and the Initiative for Future Agriculture and Food Systems (IFAFS). The NRI portion of the combined program would focus on fundamental, basic research, and receive 60% of the available funding. The IFAFS portion would focus on applied, integrated research, education, and extension projects, and receive 40% of the available funding. The title would reauthorize appropriations for the NRI at $500 million annually through FY2012, and provide for the transfer of IFAFS's mandatory funding. The House bill, in support of a more centralized administration of the agencies, called for the President to submit a unified annual budget reflecting the total amount requested for each of two categories of mission area programs. The first category, called capacity-building programs, included all of the formula-funded programs, support for research at the tribal colleges, the 1890 colleges, the Hispanic-serving institutions, and other selected programs. The second budget category, called competitive programs (administered by the new NIFA), reflected the total amount requested for all programs that distribute funds through peer-reviewed, competitive processes. The House bill provided a substantial amount of mandatory research funding, totaling $865 million over the five-year life of the farm bill. The existing Organic Research and Extension Initiative received $25 million in total mandatory funds for FY2008-FY2012 and $25 million in annual appropriations authority for FY2009-FY2012. A new Specialty Crop Research Initiative received a total of $215 million in mandatory funds in addition to annual appropriations authority of $100 million for FY2008-FY2012. The effort to improve the safety of fresh cut produce was provided an additional total of $25 million in mandatory funds to supplement the annual appropriation. Also, the House bill preserved mandatory funding of $200 million for IFAFS for FY2010-FY2012. Discretionary programs were maintained largely as in the previous farm bill and most were authorized to receive appropriations of such sums as necessary. The Senate-passed amendment called for terminating CSREES and recasting the agency as the National Institute of Food and Agriculture. The institute was to plan, coordinate, and manage all existing extramural USDA research, education, and extension funds (competitive grants, capacity-building grants, and formula funds). The NIFA director was to report directly to the Secretary of Agriculture (not through the Under Secretary). The bill explicitly directed the Under Secretary to coordinate research between ARS and NIFA, and to recommend funding for all the programs within USDA's research mission area. The Senate bill provided $160 million in mandatory research funding over the five-year life of the farm bill. This bill reauthorized the Organic Research and Extension Initiative with $16 million in annual mandatory funds for FY2008-FY2012. A new Specialty Crop Research Initiative received $16 million in annual mandatory funds for FY2008-FY2012. Mandatory funds for the Initiative for Future Agricultural and Food Systems (IFAFS, which was to be a program within NIFA) were eliminated and replaced with annual appropriations of such sums as necessary. As with the House bill, discretionary programs were maintained largely as in the previous farm bill and most were authorized to receive appropriations of such sums as necessary. Other new provisions in the both the House and Senate bills included (1) a grant program to help non-land grant public colleges and universities improve their capacity for agricultural research, education, and outreach; (2) establishment of an endowment fund, similar to that established for the tribal colleges, to provide a continuing base of support for Hispanic-serving agricultural colleges; (3) establishment of institutional capacity-building and competitive grant programs for the Hispanic-serving colleges; and (4) a larger commitment to bioenergy and biobased products. The enacted 2008 farm bill (Food, Conservation, and Energy Act of 2008, P.L. 110-246 ) reorganizes the Department's Research, Education, and Economics mission area, which currently comprises four agencies that separately administer intramural and extramural programs supporting agricultural research and development (R&D). The enacted farm bill's research title (Title VII) classifies all current research, extension, and education programs into two groups--capacity programs and competitive programs--based upon the way in which their funding is distributed to recipients. Title VII creates an umbrella coordinating entity known as the Research, Education, and Extension Office (REEO) in Office of the Under Secretary for Research, Education, and Economics, and designates the Under Secretary as the Chief Scientist of USDA. The REEO will coordinate and plan both capacity and competitive programs, as well as USDA-administered intramural (Agricultural Research Service (ARS)) and extramural programs. Extramural programs (both capacity and competitive), currently administered by the Cooperative State Research, Education, and Extension Service (CSREES)), will be transferred to a new National Institute for Food and Agriculture (NIFA), and CSREES will cease to exist on October 1, 2009. Within the new NIFA, the existing National Research Initiative Competitive Grants Program (NRI) will be expanded into an Agriculture and Food Research Initiative (AFRI). It will incorporate the purposes of the former Initiative for Future Agriculture and Food Systems (IFAFS), whose authority the new farm bill repeals. The enacted 2008 farm bill also makes changes regarding how some research contracts and grants are awarded, and increases the emphasis on the need for a competitive bid process. For example, the enacted bill switches certain Smith-Lever 3(d) special emphasis extension funds from being awarded on a formula basis to competitive bid. Also, in general, the farm bill increases money mostly for research programs that are competitively awarded, such as programs for specialty crops, biomass, and organic production, and also for beginning farmer research programs. These changes reflect statements in the conference committee's manager's report noting that "the Managers recognize the numerous benefits of competitive research programs and have supported the expansion of funding for these programs." The manager's report also "encourage[s] the Department to make every effort to increase support for competitive programs while maintaining the needs of capacity and infrastructure programs when making budgetary decisions." The Appendix compares the agricultural research, extension, and education policies set in the 2002 farm bill ( P.L. 107-171 ) with the provisions in the House- and Senate-passed versions of H.R. 2419 , and the enacted Food, Conservation, and Energy Act of 2008 ( P.L. 110-246 ).

Summary:
The 110th Congress passed an omnibus farm bill (Food, Conservation, and Energy Act of 2008, P.L. 110-246) to authorize and direct the implementation of the U.S. Department of Agriculture's (USDA's) major programs across the spectrum of its mission areas through FY2012. The enacted bill reorganizes the Department's Research, Education, and Economics mission area, which currently comprises four agencies that separately administer intramural and extramural programs supporting agricultural research and development (R&D). The research title of P.L. 110-246 (Title VII) classifies all current research, extension, and education programs into two groups--capacity programs and competitive programs--based upon the way in which their funding is distributed to recipients. Title VII creates an umbrella coordinating entity known as the Research, Education, and Extension Office (REEO) in the Office of the Under Secretary for Research, Education, and Economics, and designates the Under Secretary as the Chief Scientist of USDA. The REEO will coordinate and plan both capacity and competitive programs, as well as USDA-administered intramural (Agricultural Research Service (ARS)) and extramural programs. Extramural programs (both capacity and competitive), currently administered by the Cooperative State Research, Education, and Extension Service (CSREES)), will be transferred to a new National Institute for Food and Agriculture (NIFA), and CSREES will cease to exist on October 1, 2009. Within the new NIFA, the existing National Research Initiative Competitive Grants Program (NRI) will be expanded into an Agriculture and Food Research Initiative (AFRI). It will incorporate the purposes of the former Initiative for Future Agriculture and Food Systems (IFAFS), whose authority the new farm bill repeals. The House and Senate versions of the farm bill would have provided $865 million and $160 million, respectively, in mandatory funding for certain research programs over the five-year life of the bill. The enacted bill provides a total of $333 million in mandatory funds for (1) a new specialty crop research initiative ($230 million); (2) research on fresh produce food safety ($25 million); and (3) organic agriculture research ($78 million). The enacted farm bill research title includes major initiatives to provide capacity-building support to Hispanic-serving agricultural colleges and to make them eligible to receive funding through a wider range of grant programs. This report will not be updated.