STATEMENT OF

CATHERINE E. WOTEKI, Ph.D., R.D.
ACTING UNDER SECRETARY
RESEARCH, EDUCATION, AND ECONOMICS
U.S. DEPARTMENT OF AGRICULTURE

BEFORE THE COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY UNITED STATES SENATE

March 13, 1997

Mr. Chairman and members of the Committee. Thank you for the opportunity to discuss with you the importance of agricultural research, education, and extension. Accompanying me are Dr. Floyd Horn, Acting Deputy Under Secretary, Dr. Ed Knipling, Acting Administrator of the Agricultural Research Service (ARS), Dr. Bob Robinson, Administrator of the Cooperative State Research, Education, and Extension Service (CSREES), Dr. Susan Offutt, Administrator of the Economic Research Service (ERS), and Mr. Don Bay, Administrator of the National Agricultural Statistics Service (NASS).

I come to you today to discuss what I believe to be the most critical Federal mission in agriculture--research, education and economics. The continued success of U.S. agriculture, and indeed world agriculture, is dependent on knowledge. Agriculture operates in a fully interdependent global economy, driven by advances in information, communication, and biological technologies, and committed to the goals of environmental stewardship and improved human health. In this environment, the challenge of assuring an accessible and safe food and fiber system can be met only through the continuous development and application of new knowledge.

Agricultural research and education have long been the engine of productivity in American agriculture providing an affordable food supply, assuring our comparative advantage in many areas of production, and substantially contributing to our balance of payments. Today, the public demands all that and even more of agriculture--to conserve natural resources, create more nutritious and better quality foods, and assure social and economic progress in agricultural and rural areas. Further, policy changes in the structure of support for commodity producers, international trade agreements, and environmental regulations, position the agricultural knowledge system as a critical element of the new "safety net" for agriculture and rural America.

Two fundamental challenges face agriculture. The first is how to achieve long-term sustainability in agricultural production through simultaneously achieving and maintaining profitability, minimizing negative environmental impacts, and developing and improving strong rural and agricultural communities. Balancing these economic, environmental, and social factors requires new approaches to research and education, which emphasize systems for integrated problem-solving. The Fund for Rural America competitive grants program authorized in the Federal Agriculture Improvement Act of 1996 (the 1996 Farm bill) is providing an opportunity to design new partnerships and linkages to develop and utilize research-based solutions to problems in the context in which they occur.

The second fundamental challenge facing agriculture is responsiveness to broad public concerns for safe, nutritious, and accessible foods. Recent legislation such as the Food Quality Protection Act and public concern about improving food safety signal the need to develop new knowledge which can lead to improved production, processing, and consumer use practices which reduce both chemical and microbial contamination of food. Research--and education--are essential to maintaining public confidence in the safety of the food supply. These efforts also contribute to preserving and expanding export markets for U.S. agriculture. The President's FY 98 budget responds to these concerns and our request includes major initiatives for USDA in the areas of food safety and human nutrition.

Mr. Chairman, as we have examined options for the reauthorization of the Research Title of the 1996 Farm bill, we have been working within a framework as follows:

We support maintaining world leadership in agricultural science and education as the guiding principle that undergirds this framework.

We strongly prefer using existing legislative and administrative authorities rather than creating new mandates.

We encourage efficiencies throughout the research system to assure the best use of program resources and to reduce duplication of effort.

We encourage multi-functional, multi-regional, multi-institutional activities to achieve maximum leverage of federal, state, and local dollars.

We will continue to support the range of funding mechanisms and the current structure of intramural and extramural research with improved accountability. We must maintain long-term, high risk research as well as shorter term, investigator initiated research.

Formula funds will continue to play an essential role in maintaining research and extension activities at the Land Grant universities.

The Administration supports merit review with peer evaluation in all research programs with competitively awarded programs wherever possible and appropriate.

Consistent with general Administration positions on the role of states, we value an active federal-state-local partnership in setting priorities, conducting the work, and evaluating the results. We will work in partnership with state and local entities where we have concurrent jurisdiction.

Consistent with Administration positions, we value public sector-private sector partnerships as a means of leveraging scarce federal dollars. We respect that the public and private sectors clearly have complementary strengths and we seek to capitalize on those strengths. Public sector activities should focus on that which is in the public interest.

We believe that responsiveness to national and regional needs is a high priority in setting priorities with partners and stakeholders, conducting work, evaluating results, and serving our customers and stakeholders.

Mr. Chairman, as you are aware, Secretary Glickman's letter in response to your questions outlines the Administration's position regarding the reauthorization of the research, education, and extension programs. I'd like to briefly review the four major points in our position.

1. The Department of Agriculture and the Research, Education and Economics mission area invest in creating and strengthening the research and educational capacity essential to meeting national goals for the food and agricultural system.

The four agencies within the Research, Education, and Economics mission area are focusing their research, education, and extension efforts toward attaining 5 general goals for the nation's food and agricultural system. These goals are the basis of our strategic plan. The goals are: 1) An agricultural system that is highly competitive in the global economy, 2) A safe and secure food and fiber system, 3) A healthy, well-nourished population, 4) Greater harmony between agriculture and the environment, and 5) Enhanced economic opportunity and quality of life for Americans. We have developed this plan through consultation with agricultural producers, business, consumers, policy makers, scientists, educators, and economists. Private interests, such as commodity groups and trade organizations, and broad interests such as environmental and consumer groups, have been involved in the planning and review. In addition, Departmental staff and partners, most notably the land grant universities, have shaped the plan. These goals were derived from purposes of agricultural research defined by Congress in the Federal Agriculture Conservation and Trade Act of 1990 and the 1996 Farm bill as well as from input from numerous listening sessions and consultations with stakeholders. We look forward to consulting with the Committee as this plan continues to develop.

The strategic plan recognizes the growing complexity of agricultural production characterized by greater exposure to risks, as well as greater rewards for effective management of those risks. It also reflects the interrelationship between agriculture and the biological and social environments, as well as the relationship of food and health. The actions we take to achieve the goals of this plan will be guided by the current authorities and subsequent direction Congress provides in reauthorization of the Research Title of the 1996 Farm Bill.

Attaining these goals for agriculture is necessary for helping us achieve our broad national goals of improved health, environment, prosperity, national security, and quality of life. Accelerating the development of technologies is critical to sustaining our nation's long-term economic growth and for increasing agricultural productivity while reducing its environmental impact. Equally important are educational institutions and government programs, such as extension, that promote the dissemination of knowledge and technologies.

2. The programs of the REE mission area are dedicated to maintaining world leadership and excellence in agricultural science and education.

Our scientists must be working at the leading edge in the food and agricultural sciences if we are to maintain and improve the competitive position for U.S. agriculture. U.S. scientists must continue to make a significant share of scientific advances and to capitalize on new discoveries that are made abroad, such as the recent cloning of a sheep by Scottish scientist Dr. Ian Wilmut. By maintaining a tradition of scientific excellence, the nation will be better positioned to educate the scientific and technical workforce required in modern agriculture and by our economy. To sustain U.S. leadership in the world and strengthen participation in collaborative scientific and educational endeavors, we must increase our level of interaction with colleagues in other countries.

World leadership is also maintained by funding the most promising scientific endeavors and the best people to conduct research, education, and extension activities. As a result, the Administration supports increasing the proportion of the portfolio of federal agricultural research that is awarded by merit review with peer evaluation. This support is evidenced in the President's budget proposal for USDA, which calls for significant increases in appropriations for the National Research Initiative and other competitively awarded grant programs. The Administration also supports and encourages integrated problem solving, as demonstrated by our design of the Fund for Rural America competitive grant program.

We will sustain this excellence only by engaging the talents of our diverse population. A responsive research, education, and extension system is comprised of people with a variety of experiences and perspectives, providing the necessary insight for problem solving. We must improve our educational and extension systems to give children and adults a greater understanding and appreciation of the food and agricultural sciences, thereby better informing their decisions and understanding.

3. The Federal government has a distinct role to play in partnership with state and local governments and the private sector.

Investment in research, education, and extension is a Federal responsibility despite significant state and private sector investments for two reasons: it provides a unique public good and it supports fulfillment of USDA's mission. Neither states nor the private sector have sufficient incentive to fund some kinds of research -- research that is very long-term and fundamental or research for which they cannot capture the economic benefits. Therefore, both states and the private sector tend to under-invest in agricultural research and development. While state funded research benefits that state's producers and consumers, some portion "spills over" to consumers and producers in other states. If a state considers only the benefits of its research to its own producers and consumers, it would tend to invest less than would be optimal from a national perspective. This is similar to the case of a private firm underinvesting in research because it cannot capture all the returns, such as certain kinds of research on food safety, diet, health, and the environment, where private or state investments are low but social payoffs are high. In addition, states will tend to favor applied research and technology development at the expense of more basic or pre-technology research, since the former is likely to have more direct state benefit.

The second unique role for the Federal government is that of providing in-house scientific expertise, which is essential for national and international leadership and coordination in agricultural science and education. The effectiveness of the State research, education, and extension system depends on regional and interregional coordination and linkages provided through national program leadership in the USDA.

Effectively meeting national goals requires a system of customer input, evaluation, and assessment. To ensure responsiveness to the public in meeting these goals, the Administration supports broad stakeholder access to priority setting processes and transparency in those processes. Two mechanisms currently used by the REE mission area are advisory bodies and strategic planning as required by the Government Performance and Results Act (GPRA).

Input from advisory bodies should always inform Federal government action, whether formally provided by the recently appointed National Agricultural Research, Extension, Education, and Economics Advisory Board or through informal interactions with stakeholders at the national, state and local level. Since being authorized, the Advisory Board has had one meeting and will have its second meeting this month. The Board has provided advice to the Secretary of Agriculture on implementation of the Fund for Rural America, the composition of the Strategic Planning Task Force to review research facilities, and is considering recommendations on REE strategic plans and the reauthorization of the Research title of the 1996 Farm bill. We expect that the Board, over time, will more clearly define its role and, as Congress intended, will become an effective clearing house for numerous other advisory systems from the national, state and local levels.

Second, the Advisory Board will also be an integral part of the process of program review related to the implementation of GPRA. In response to GPRA, the REE mission area and agencies have developed a set of draft strategic plans and are in the process of developing our first annual performance plans. In developing these plans, we are considering adopting a combination of quantitative and qualitative measures to use in evaluating our performance. These techniques will be used to assess the quality, relevance, and timeliness of our research and education efforts. Adapted to the research, education, and extension context, we believe GPRA will serve us well, allowing us not only to conduct programs more effectively but also to better describe the value of those programs to society.

4. Wise strategy for public investment supports a diversified portfolio of funding sources and mechanisms as well as diverse institutions performing research, education and extension.

The diverse portfolio consists of multiple funding sources and funding mechanisms as well as a diversity of institutions and performers. Our portfolio currently contains extramural funding in the form of formula funds, special grants, and competitive grants in addition to intramural funding. The Administration also recognizes that diversity among the institutions performing research, education, and extension is critical to ensuring that national goals are effectively met. A diversity of performers fosters creativity and innovation. It increases the number of perspectives on a problem, enriches competition among proposals, and induces competition to support the best work among funders, both public and private. Diverse funding alternatives give original ideas a better chance to find support than a more centralized system. As a result, a diverse system enhances quality of output and strengthens national capacity to respond to new opportunities and changing national needs.

The Administration supports USDA's mix of extramural programs in research, education, and extension, and is a proponent that formula or base program awards should allow and support maximum flexibility for states to use resources where they have the greatest ability to solve problems. The Administration also supports a strong Federal role in leveraging resources, and recent program efforts have emphasized multi-state, multi-institutional collaborations. Strengthening current mechanisms, such as the regional research program, which requires 25 percent of Hatch funds be used for multi-state efforts, and proposed mechanisms, such as set-asides for cross institutional extension programs, support this effort. Accountability to shared regional and national goals is also critical to this effort. The Administration does not support state-specific or commodity-specific special grants, and Executive Branch budget requests of the last 20 years demonstrate the consensus of executive branch officials of both parties that the competitive process is the best way to ensure the general public and others who have more direct interests in our work that the most promising and productive work is being supported. The Administration does support mechanisms for multi-state research projects addressing problems of national or regional importance, such as water quality and integrated pest management. Wherever reasonable and appropriate, the Administration supports nonfederal matching requirements to encourage maximum leverage of federal dollars.

The Administration also supports a balanced portfolio of intramural and extramural research. USDA relies on the REE agencies to provide the science base to fulfill its mission, and we have a historical commitment to strengthening university-based research and higher education. We look to the intramural agencies -- ARS, ERS, and NASS -- as the primary performers of mission-oriented, problem-solving research to meet the needs of program agencies and for the generation of statistical data important to program and policy decisions. The university-based scientists supported by CSREES produce a mixture of basic, applied, and developmental research that is key to addressing issues critical to American agriculture's future. Simultaneously, it provides new knowledge and new technology, and it trains the next generation of scientists and engineers. The combination of intramural and extramural research at USDA is a unique strength of our program and we strive to continually increase their complementarity.

Determining what constitutes an appropriate balance depends on the ultimate goals desired from the Federal investment. In past years, when budgets could be expected to grow every year, the question of appropriate balance between the intramural and extramural parts of the portfolio was not a major issue. With the prospect that the agricultural research budget will remain flat for the foreseeable future, it is of growing significance. The Administration has already expressed its preference for increases in competitive, merit-reviewed research to ensure that the Nation receives the highest quality return on its investment while maximizing the ties between research and higher education, and our budget requests have consistently reflected this position. At present, we have little in the way of program evaluation to guide an assessment of the optimal proportions of extramural and intramural effort, but we look to the Government Performance and Results Act (GPRA) as a way to introduce greater rigor into this much-needed analysis.

Intramural research conducted by the ARS, ERS, and NASS addresses critical national issues requiring long-term commitments and specialized facilities, supports the research needs of action and regulatory agencies, and provides research required to support national or international policies and to meet international standards and certifications. This research is subject to an internal peer review process, which is currently under review. ARS, ERS, and NASS research provides a critical resource base so the Department can rapidly respond to new problems and emergencies as they arise and supports long-term, and sometimes high-risk research, in which the private sector is not likely to invest.

Mr. Chairman, Federal investment in research, education, and extension for the achievement of national goals has never been more critical to the success of the agricultural sector. While our system has served us well, clearly it is time to assess current programs, policies, and funding mechanisms to ensure those national goals are effectively met. We expect to communicate to you our specific proposals for administrative and legislative change at the earliest opportunity. We look forward to the coming important debate about the future of the research, education, and extension system, and we look forward to working with you and members of the committee to strengthen the capacity of the research, education, and extension system.

My colleagues and I would be happy to answer any questions you may have.