Agricultural Research: More Efficient and Accountable System Could Better
Respond to New Challenges (Testimony, 03/13/97, GAO/T-RCED-97-101).

GAO discussed the U.S. agricultural research system, focusing on what
could be done to help the system respond to the challenges faced by the
agricultural sector.

GAO noted that: (1) while many agricultural research needs have changed,
the structure created to meet these needs has remained essentially
intact; (2) in fiscal year (FY) 1996, the Agricultural Research Service
(ARS) allocated over $67 million (or 9.5 percent of its appropriated
research funds) to overhead costs, and the Cooperative State Research,
Education, and Extension Service allocated $14.7 million (or 3.6 percent
of its total research budget) to overhead; (3) in addition to the
associated overhead costs, the Department of Agriculture's (USDA)
existing infrastructure has hindered its ability to move into new
research areas that require different equipment and scientific
expertise; (4) USDA recognizes the need to consolidate ARS laboratories;
(5) in its FY 1996 budget request, it proposed closing 12 laboratories,
however, directives from congressional committees have limited USDA's
ability to act; (6) USDA's Strategic Planning Task Force, established by
the 1996 farm bill, has the potential to address the issue of laboratory
closings in an objective manner; (7) another way to increase efficiency
is through more collaboration among federal, state, and industry
research scientists; (8) finally, Cooperative Research and Development
Agreements represent an important mechanism through which federal
laboratories and private industry can collaborate; (9) along with
increased efficiency, there is a need for improved accountability for
federal research expenditures; (10) USDA has several efforts under way
to improve its research information systems; (11) since FY 1996, USDA
has allocated about $200,000 to fund a task force established to enhance
USDA's Current Research Information System capabilities; (12) in
addition, USDA is in the early stages of planning for the design and
development of a Research, Education, and Economics Information System
to integrate some of the systems currently used by USDA's research
agencies; (13) accountability has also been hindered by several of the
mechanisms USDA uses to allocate its research funds; (14) the impact of
these funding mechanisms is that a large proportion of USDA-funded
research, in particular, earmarked grants, formula funds, and to some
degree, in-house research, is less subject to accountability than
competitively funded research; and (15) nearly all the respondents to a
1995 agricultural research survey conducted by the House Committee on A*

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-RCED-97-101
     TITLE:  Agricultural Research: More Efficient and Accountable 
             System Could Better Respond to New Challenges
      DATE:  03/13/97
   SUBJECT:  Agricultural research
             Federal agency reorganization
             Federal/state relations
             Accountability
             Research program management
             Cooperative agreements
             Research grants
             Management information systems
             Research and development facilities
             Agricultural colleges
IDENTIFIER:  USDA Current Research Information System
             USDA National Research Initiative
             
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Cover
================================================================ COVER


Before the Committee on Agriculture,
Nutrition, and Forestry,
U.S.  Senate

For Release on Delivery
Expected at
9:00 a.m.  EST
Thursday
March 13, 1997

AGRICULTURAL RESEARCH - MORE
EFFICIENT AND ACCOUNTABLE SYSTEM
COULD BETTER RESPOND TO NEW
CHALLENGES

Statement of
Robert A.  Robinson, Director
Food and Agriculture Issues
Resources, Community, and Economic
Development Division

GAO/T-RCED-97-101

GAO/RCED-97-101T


(150721)


Abbreviations
=============================================================== ABBREV

  USDA -
  ARS -
  CSREES -
  CRADA -
  GPRA -
  CRIS -

============================================================ Chapter 0

Mr.  Chairman and Members of the Committee: 

We are pleased to be here today to present our views on the U.S. 
agricultural research system.  In particular, we will be discussing
what could be done to help the system better respond to the
challenges faced by the agricultural sector now and in the next
century. 

It is difficult to begin any discussion on how the research system
could be changed without first acknowledging its many
accomplishments.  For over a century, publicly funded agricultural
research has been an important catalyst in creating a vigorous
agricultural economy and a bountiful supply of inexpensive food and
fiber.  Along with extension and education, agricultural research has
helped transform U.S.  agriculture into the productive,
technology-based operation it is today. 

While its numerous achievements have served the nation well, we
believe that changes are needed to strengthen the system so that it
can better respond to current and future food and agricultural needs. 
In particular, the system could be made more efficient through such
measures as closing and consolidating federal laboratories and
increasing collaboration among public and private researchers.  In
addition, greater accountability is needed to foster quality research
and reduce unnecessary duplication. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:1

The nation's publicly funded agricultural research system is based on
a federal-state partnership in which the U.S.  Department of
Agriculture (USDA) and the states, through their land grant
institutions, play multiple roles in conducting and funding
agricultural research, extension, and education activities.  This
system, whose roots go back to the nineteenth century, today
comprises over 100 USDA laboratories, over 100 land grant
institutions located throughout the United States,\1 and thousands of
publicly funded agricultural research scientists.  For fiscal year
1998, USDA has requested about $1.8 billion for its Research,
Education, and Economics mission area.  This amount includes about
$800 million for in-house research conducted by the Agricultural
Research Service (ARS) and $840 million for the Cooperative State
Research, Education, and Extension Service (CSREES), which
administers funding for research at land grant institutions. 


--------------------
\1 The land grant colleges include the colleges mandated under the
Morrill Act of 1862, the second Morrill Act of 1890 (historically
black land grant colleges), and the Elementary and Secondary
Education Reauthorization Act of 1994 (Native American colleges). 


   EXISTING STRUCTURE IS
   INEFFICIENT
---------------------------------------------------------- Chapter 0:2

While many agricultural research needs have changed, the structure
created to meet these needs has remained essentially intact.  In our
1996 review of agricultural research,\2 we reported that ARS alone
occupies almost 3,000 buildings on about 400,000 acres at 107
laboratory locations and 35 worksites in the United States, Puerto
Rico, and several foreign locations.  Consolidation may offer the
opportunity for reducing some of the overhead costs associated with
these facilities.  In fiscal year 1996, ARS allocated over $67
million (or 9.5 percent of its appropriated research funds) to
overhead costs, and CSREES allocated $14.7 million (or 3.6 percent of
its total research budget) to overhead. 

In addition to the associated overhead costs, USDA's existing
infrastructure has hindered its ability to move into new research
areas that require different equipment and scientific expertise.  In
our 1996 review, we noted that some USDA infrastructure, such as
quarantine facilities and special equipment for work on recombinant
DNA, was acquired for specific research and cannot be easily modified
for use in other areas.  Further, the over 1,900 scientists
conducting research at these facilities have developed specialized
expertise.  It takes many years to develop this expertise as well as
the teamwork that develops within laboratories--both of which are
needed for successful science.  Thus, major shifts of scientists can
cause reduced productivity. 

The need to make changes in the research programs conducted by land
grant institutions has been reported by the National Research
Council.  In its comprehensive 1996 report on land grant colleges of
agriculture,\3 the Council concluded, among other things, that "the
past accomplishments of agricultural research conducted at the .  . 
.  colleges of agriculture provide no rationale for maintaining the
status quo in the face of new research needs and paradigms and a
rapidly changing operating environment."

We believe that there is a need to make the public agricultural
research system more efficient.  This can be achieved in several
ways.  First, some ARS laboratories could be consolidated or closed. 
In our March 1996 report, we noted that over 60 percent of ARS'
laboratories were over 30 years old and that almost half had fewer
than 10 scientists each.  Furthermore, ARS estimated that, as of
fiscal year 1993, $700 million was required to repair its facilities,
many of which did not meet modern building codes. 

USDA recognizes the need to consolidate ARS laboratories.  In its
fiscal year 1996 budget request, it proposed closing 12 laboratories. 
However, directives from congressional committees have limited USDA's
ability to act.  For example, regarding the 12 laboratories that USDA
sought to close, the House and Senate committees' reports for USDA's
1996 appropriations directed that 9 remain open and that research
conducted at the remaining 3 continue to be funded, if not at the
existing laboratory, then at some other facility. 

USDA's Strategic Planning Task Force, established by the 1996 farm
bill, has the potential to address the issue of laboratory closings
in an objective manner.  This independent, 15-member panel is charged
with, among other things, reviewing the capacities of federally owned
and funded agricultural research facilities and, within 2 years,
providing a 10-year strategic plan for closing, consolidating,
modernizing, and constructing federally funded facilities.  We
believe that the task force deserves the resources and support
necessary to effectively carry out its mandate. 

Another way to increase efficiency is through more collaboration
among federal, state, and industry research scientists.  For example,
regional centers of excellence, linking scientists from various
states and federal laboratories to work on research of regional
importance, offer the potential for more efficient use of resources
through the sharing of expertise and facilities across state lines. 

Fundamental to the center-of-excellence concept is the notion that
not all institutions need to have research programs and expertise in
all specialties.  Further, food and agricultural issues are not
always best examined at the state level.  Many issues--such as those
involving natural resources, food safety, and nutrition--cross state
boundaries.  Our 1996 report on agricultural research identified
several examples of collaborative efforts among land grant
universities and between land grants and federal agencies, including
ARS.  USDA is a strong proponent of such partnerships, as are many
members of the research community. 

Finally, Cooperative Research and Development Agreements (CRADAs)
represent an important mechanism through which federal laboratories
and private industry can collaborate.  In our June 1996 report on ARS
research activities,\4 we reported that as of January 1996, ARS had
at least 236 active CRADAs covering 173 projects.  The projects were
valued at $114 million.  Our report noted that the benefits of CRADAs
to ARS included improved opportunities to develop and transfer
technology and obtain better feedback from industry on the types of
research needed.  However, to our knowledge, there have been no
comprehensive reviews on how effectively ARS has implemented its
CRADA program.  We believe this would be an opportune time to examine
the program to determine the extent to which the public has benefited
from these arrangements. 


--------------------
\2 Agricultural Research:  Information on Research System and USDA's
Priority Setting, (GAO/RCED-96-92, Mar.  28, 1996). 

\3 Colleges of Agriculture at the Land Grant Universities:  Public
Service and Public Policy.  National Academy Press:  Washington,
D.C., 1996. 

\4 ARS' Research Activities, (GAO/RCED-96-153R, June 14, 1996). 


   EXISTING STRUCTURE LACKS
   ACCOUNTABILITY
---------------------------------------------------------- Chapter 0:3

Along with increased efficiency, there is a need for improved
accountability for federal research expenditures.  As noted in our
1996 report on agricultural research, USDA does not comprehensively
evaluate the impacts of research programs.  Furthermore, neither ARS
nor CSREES systematically assesses the relative importance of its
research priorities within the context of USDA's overall research
portfolio.  Without such assessments, there can be little assurance
that research resources are being allocated to the areas of greatest
need.  The Government Performance and Results Act of 1993 (GPRA) has
provided an impetus for USDA to move toward an outcome-oriented
strategic planning process with performance goals and measures of
performance.  If this effort is successful, it will be an important
step toward greater accountability. 

However, for GPRA to be effectively implemented, USDA will need to
improve its information system capabilities.  USDA's Current Research
Information System (CRIS), used by thousands of researchers to
document and inventory publicly funded agricultural research, has
significant limitations.  For example, this system does not capture
many current research areas, such as biotechnology and sustainable
agriculture.  As a result, USDA cannot accurately identify the extent
of publicly funded research in those areas.  Moreover, the system
lacks information on planned research expenditures and comprehensive
data on food and agricultural projects supported by other federal
agencies.  Finally, its information on research outcomes is often
incomplete because land grant universities and others do not
systematically collect data on the outcomes of their research
projects. 

USDA has several efforts under way to improve its research
information systems.  Since fiscal year 1996, USDA has allocated
about $200,000 to fund a task force established to enhance CRIS'
capabilities.  In addition, USDA is in the early stages of planning
for the design and development of a Research, Education, and
Economics Information System to integrate some of the systems
currently used by USDA's research agencies, including CRIS.\5 This
system is also intended to provide the expanded information
capabilities needed for reporting information required under GPRA. 
It is critical that USDA take the steps necessary to ensure that this
new system adequately meets the needs of USDA's management and the
research community and be completed in time for use in meeting GPRA
requirements. 

Accountability has also been hindered by several of the mechanisms
USDA uses to allocate its research funds.  USDA distributes its
research funds in four basic ways:  (1) to ARS for in-house research;
(2) to land grant colleges and their associated research experiment
stations through a formula based on the percentage of the nation's
rural and farm populations located in each state and territory; (3)
through a competitive grant program--known as the National Research
Initiative--open to scientists both inside and outside of the land
grant system; and (4) through a special research grants program that
includes congressionally designated (i.e., "earmarked") projects and
projects USDA has determined to be of national or regional priority. 

The impact of these funding mechanisms is that a large proportion of
USDA-funded research--in particular, earmarked grants, formula funds,
and to some degree, in-house research--is less subject to
accountability than competitively funded research. 

This is not to say that these funding mechanisms do not also have
advantages.  For example, in-house research allows laboratories to
maintain long-term research efforts; and formula funds facilitate the
pursuit of long-term research goals and multidisciplinary research
and provide leverage for state and private support of agricultural
research.  Further, supporters of earmarked grants maintain that such
grants address local problems that might otherwise not be addressed. 

However, as noted by the National Research Council, noncompetitive
funding, by earmarked grants or formula, is inherently lacking in
accountability.  With earmarked grants and formula funds, USDA has no
effective means of determining how they are used by recipients or
whether they have been devoted to activities that justify federal
support.  Nor is such research automatically subject to peer
review--an important part of quality control in science.  Similarly,
the National Academy of Sciences noted that merit review of in-house
research is more difficult because federal research scientists are in
the civil service and still receive salaries even if they are not
productive or if their area of expertise has become obsolete. 

In fiscal year 1994, CSREES funded about $53 million in earmarked
special grants.  Similarly, as we reported in 1996,\6 as of January
1996, ARS had 42 projects, valued at $32 million, that were
designated by congressional committees to go to organizations outside
the federal government.  Nearly all the respondents to a 1995
agricultural research survey conducted by the House Committee on
Agriculture agreed that all of USDA's special research grants should
be awarded competitively--not through earmarking.  While some
congressionally designated grants may produce quality research, there
is little accountability for such funds, and these grants use
resources that could be directed to areas of greater priority. 

As for the proper balance among the funding mechanisms for
agricultural research, we believe this can best be determined in the
context of clearly stated national research goals--jointly determined
by USDA and the land grant institutions--and strategic plans for
reaching these goals. 


--------------------
\5 In addition to CRIS, other systems being integrated into this
system include USDA's extension and higher education information
systems. 

\6 GAO/RCED-96-153R. 


-------------------------------------------------------- Chapter 0:3.1

This concludes our statement.  We would be glad to respond to your
questions. 


*** End of document. ***