A New Foundation for Food & Agriculture Research
By Mark Edelman and Barry Flinchbaugh
© Copyright Agri-Pulse Communications, Inc.
ME. A new Foundation for Food and Agriculture Research (FFAR) was authorized by the new 2014 Farm Bill. FFAR is intended to complement--not replace--USDA's research, education, extension, and economics activities conducted by various agencies in the Research, Education, and Economics mission area. This includes the National Institute of Food and Agriculture (NIFA) and Agricultural Research Service (ARS). The Farm Bill authorizes $200 million in mandatory funding as match to solicit private donations for additional research on plant health; animal health; food safety and nutrition; renewable energy, natural resources and environment; agricultural and food security; technology; and agricultural economics and rural communities.
BF. FFAR priorities closely resemble the authorizing statute for the Agriculture and Food Research Initiative (AFRI). AFRI is USDA's largest competitive grants program administered by NIFA. NIFA is the land grant university research and extension funding agency in USDA. The FFAR Board is to have 8 members recommended by the National Science Foundation and 7 by industry. All are appointed by the Secretary and other ex-officio Administrators from the USDA mission area. At $2.7 billion a year, USDA's current food and agricultural research, education, and extension budget is less than two percent of USDA's total budget. China plans to spend about 16-times more at $45 billion annually on agricultural research.
ME. Perhaps Ag Secretary Vilsack will take the opportunity to build partnerships to address emerging capital formation gaps and technology commercialization needs in the nation's food, agriculture, renewable energy, and rural innovation system more broadly. In more than one discussion at recent conferences, Research-Extension partnerships and Research-Private Sector Partnerships have been criticized by the partners because researchers took charge of funding and left little for partnership activities. I am reminded of an initiative a few years ago in which extension-oriented policy centers helped build a case for a new policy center initiative in Congress only to have NIFA develop competitive grant language favoring funding for research-directed policy centers. Perhaps Extension should have been mentioned in the title or language. Researchers often focus on a narrower scope of priorities for professional publications and cultivate peer research networks to review competitive grants. According to one MIT expert, the academy represents only 3% of U.S patents. A narrow academic research focus often represents a small fraction of problems faced by private companies and outreach clientele in the real world and can miss important perceptions, understandings, and innovative solutions.
BF. The Foundation for Food and Agriculture Research proposal is modeled after similar private funding entities previously established to leverage private funding for the National Institutes of Health, Centers for Disease Control and Prevention, National Fish and Wildlife Service, and the Food and Drug Administration. The new Foundation is seen as part of a strategy to shore up the nation's agricultural research and innovation priorities while taking into account the fiscal priority for addressing the national deficits. While private-public partnerships can be useful in leveraging scarce federal resources, drafters did raise some concerns about representation, transparency, accountability, and potential corporate influence on the priorities. Perhaps USDA Rural Development (RD) should have a role in assisting the new Foundation, given RD's connections to rural areas across the nation and RD's performance in building the renewable energy sector.
ME. Secretary Vilsack has experience with foundations. A decade ago, then Governor Vilsack signed two bills that reshaped community foundations in Iowa. In 2003, a 20% state tax credit-which is now a 25% tax credit-became available to those contributing to permanent endowments at certified community foundations. In 2005, Vilsack signed a bill to share state gaming revenues with county foundations that agreed to affiliate with the certified community foundations. Nonprofits and public agencies in each county serving local needs were granted 75% of the annual distribution and 25 percent was placed in a permanent county endowment. Extension collaborated with state foundation and economic development groups to organize 85 new foundations and conduct training for new boards in all counties that didn't have casinos or race tracks. By 2012, $6 million in state tax credits annually generated $23 million in charitable donations to permanent endowments and over $11 million was distributed to county nonprofits.
BF. That's a nice state-level success story, but rather paltry compared to the innovation and commercialization needs of U.S. food, agriculture, and renewable energy systems, if the U.S. is to lead global competitiveness in the future while helping to feed a 9 billion world population. One biorefinery with new pioneer technology costs over $200 million.
ME. We must figure out new ways of raising capital, if we want capitalism to succeed in America. Iowa State just raised $70 million in 18 months for student scholarships as part of a 3 year $150 million campaign to reduce student debt loads. That is an investment in human capital. If tax deductions can be given to donors for charitable contributions of $25 to $50 million for our football stadium expansions used in 6 home games annually, then land grant university leaders, university foundations, and their agricultural and rural stakeholders should be able to raise a $200 million for program related investments and FFAR match to address the seed funding “valley of death” for new startups attempting to commercialize promising new technologies to advance agriculture, food, renewable energy, and economic development for rural and under-served communities. The ethanol industry experience also implies that those who are invited to invest in new technology ownership is an important policy question with future economic consequences.
BF. So far, K-State Football has a higher return on its investment. Winning football teams generate alumni support and donations to academics. It takes a balance.
* Edelman is a professor of economics at Iowa State University and Flinchbaugh is an emeritus professor of agricultural economics at Kansas State University.