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3 Funding and Institutions FUNDING BIOTECHNOLOGY IN THE AGRICULTURAL RESEARCH SYSTEM Any strategy to use the tools of biotechnology to advance agriculture and forestry must address funding and the institutions of the research system. Funding and institutions are the founda- tion for progress in biotechnology. These two factors nurture and shape the development of new knowledge, the training of scien- tists, and the implementation of technical innovations. As tools of biotechnology are adapted to the problems of agriculture, new demands will be placed on the existing arrangement of research institutions. Similarly, biotechnology also will influence patterns of funding for research and training and may alter the established pathways between research discoveries and applications. The pace at which biotechnology is applied to agriculture depends on how rapidly the R&D system can incorporate these changes. This chapter looks at current institutions and funding pat- terns in agricultural research and how they are changing with the advent of biotechnology. It examines ways to enhance the roles of the federal government, states, and private sector in support- ing biotechnology research. It also calls for greater use of peer- reviewed, competitive grants to guide the growth of the agri- cultural biotechnology research system. In addition, it calls for greater integration of basic and applied research. 51

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52 AGRICULTURAL BIOTECHNOLOGY The Federal-State Agricultural Partnership The USDA and the land-grant university system, both created in 1862, have long been the keystones of our national agricultural research system. This decentralized system creates close ties be- tween federal and state programs and farmers. Up to now, the enormous success of U.S. agriculture has been credited to the strength and character of this network, especially its abilities to solve important problems and coordinate agricultural research and extension services at the federal, state, and local levels. The federal institution chiefly responsible for agricultural re- search is USDA, which supports research and extension through the Agricultural Research Service (ARS), the Cooperative State Research Service (CSRS), the Forest Service, and the Cooperative Extension Service (CES). ARS and the Forest Service are primar- ily the in-house research agencies of the department; CSRS and the CES direct and coordinate federal funds and special grant pro- grams to the states. At the state level, the land-grant colleges of 1862 and 1890 and Tuskegee Institute support research, training, and extension programs in agriculture. The State Agricultural Ex- periment Stations (SAESs) and the State Cooperative Extension Services, which are partly supported by federal appropriations, are attached and integrated (with a few exceptions) into the land- grant universities. Many county governments also are involved in agricultural extension, but their level of financial support and role in extension activities varies within as well as between states. Federal appropriations to the states for research and extension programs require approval by CSRS or CES. This arrangement of co-funding by states and the federal government provides an avenue of input from both sides in the partnership. It is the basis of a nationally coordinated yet decentralized research and extension system in agriculture. It is not easy to characterize the workings of the many priority- setting mechanisms and processes determining the direction of the research and extension system. In the federal-state partnership for supporting agricultural research, state and local concerns have tended to predominate. This is not surprising because most people in the system are state and not federal employees. However, the federal budget-making process has a major impact on the financial resources available.

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FUNDING AND INSTITUTIONS 53 A number of organizations act to coordinate planning and set priorities in the research and extension system. Within the Divi- sion of Agriculture of the National Association of State Universi- ties and Land-Grant Colleges (NASULGC), there is the Experiment Station Corr~rnittee on Organization and Policy (ESCOP) and the Extension Committee on Organization and Policy (ECOP). At the federal level, the 1977 farm bill established a Joint Council on Food and Agricultural Sciences and a Users Advisory Board to ad- vise Congress and the Secretary of Agriculture. The membership of these two advisory groups includes representatives from private companies, foundations, and non-land-grant universities, as well as the traditional federal and state agricultural agencies. Finally, the system includes federal and state legislative com- mittees and executive institutions that may influence or have bud- get control over public agricultural research programs and policy. Also involved indirectly are the General Accounting Office (GAO), the Office of Technology Assessment (OTA), and within the Ex- ecutive Office of the President, the Office of Management and Budget (OMB) and the Office of Science and Technology Policy (OSTP). Past Contributions from Agricultural Research Historically, agriculture has relied on public investment in both basic and applied research. This reliance is particularly true for certain research areas such as cultural practices or fundamen- tal breeding programs, in which the private sector cannot easily create a "product" and thus recoup its investment. Studies have demonstrated that public investment in agricultural research pro- duces a very high rate of return. Research expenditures worldwide provide annual rates of return of about 50 percent (Evenson et al. 1979~. During some periods the rates of return in American agricul- ture have been even higher. For example, from 1927 to 1950 the returns of technology-oriented research in agriculture were esti- mated to be 95 percent. The returns of science-oriented research were even higher 110 percent. Technology-oriented research was defined as including such areas as plant breeding, agronomy, an- imal production, engineering, and farm management. Science- oriented research included soil science, botany, zoology, genetics,

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54 A GRICULTURAL BIO TECHNOL OG Y plant pathology, and plant and animal physiology. The higher re- turn from science-oriented research is noteworthy considering that biotechnology relies on a new array of disciplines oriented toward - ~aslc science. Research has contributed to increased agricultural produc- tivity, low and stable food prices for American consumers, and enhanced competitiveness in world markets. Much of this past success can be attributed to the "articulation" and "decentraliza- tion" of the American agricultural research establishment (Rut- tan, 1982~. The close links among various parts of the system- basic research, applied research, extension, private industry, anal farmers were strengthened by the decentralization of authority to the state and local level. Yet it has also been argued that in this decentralized research system, basic research has been underval- ued and underfunded. Some even suggest that this underfunding of basic research explains, in part, the high rates of return. For example, spillover of basic biomedical research discoveries benefits agricultural research, but the costs of such biomedical research are not factored into rate of return estimates for agricultural research. Overall, however, the continuous state and federal support for re- search in the land-grant college system has benefited American agriculture and society at large for close to a century. Pressures for Change Despite the past successes of the nation's agricultural research and extension system, it is not without its critics and problems. By the early 1970s there were signs that the unique approach of the federal-state-community alliance had in an unforeseen way separated agriculture from the rest of academic science. One anal- ysis concluded that agriculture "the mother of sciences" was an island empire, isolated from American academic life and no longer at the leading edge of scientific progress (Mayer and Mayer, 1974~. Another analysis, known as the Pound Report, argued that public agricultural research had become highly insular and divorced from the frontiers of knowledge in the basic biological sciences (NRC, 1972~. This report and others that followed rec- ommended strengthening support for the basic plant and animal sciences (Brown et al., 1975; NRC, 1975; OTA, 1977, 1981; Win- rock International, 1982~. These reports urged the agricultural

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FUNDING AND INSTITUTIONS 55 research system to establish new funding programs based on open competition with scientific merit determined by a process of peer review-the same process used by other federal agencies to award research grants in the sciences. Even as the enormous successes of the "Green Revolution" were introduced into developing nations around the world, critics of the agricultural research and extension system were pointing to problems the system had failed to address. In her famous book Silent Spring (1962), Rachel Carson called public attention to en- vironmental issues and the problems created by the widespread use of pesticides. Agricultural research that had deciphered the interactions of soil, water supply, climate, and pests in crop pro- duction now needed to address broader environmental and ecolog- ical problems. The agricultural research system also was criticized on the grounds of social equity and social justice. Hard Tomatoes, Hard Times argued that the A-grant college system, initially established to serve the mass of rural and agricultural people, had become a publicly subsidized research arm serving agribusiness and the large farmer (Hightower, 1973~. Although buffeted by criticism and increasing public demand to broaden agriculture's research responsibilities and to encom- pass scientists from allied disciplines, few dramatic changes in either the institutions themselves or in funding patterns have been implemented. The National Agricultural Research, Extension and Teaching Act of 1977, which is Title XIV of the Food and Agri- culture Act of 1977 (P.~. 95-113), did authorize a series of new research and education grants and fellowships. One of these was a program to support high-priority research through a competitive grants program available to SAESs, all colleges and universities, other research institutions and organizations, federal agencies, pri- vate organizations or corporations, and individuals. Authorization was made for appropriations up to $25 million for the program in 1978 with $5 million increases in the subsequent 3 years and a $10 million increase for 1982, for a total of $50 ganglion. However, actual appropriations made by Congress fell far short: only $15, $15, $15.5, $16, and $16 million were appropriated for those 5 years. This lack of commitment to financial support for basic re- search in agriculture has had cumulative and far-reaching impacts: "Congress has held research resources constant for 15 years and

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56 AGRICULTURAL BIOTECHNOLOGY since World War IT has slowly politicized and destroyed the mag- nificent science investment in the old UDSA biological and physical science bureaus and the successor Agricultural Research Service" (Bonnen, 1983~. Demands and pressures on the federal-state partnership and on the research system as a whole remain. Yet support from the federal government has not been sufficient to accommodate these growing needs. At present the opportunities and needs of biotech- nology in agriculture are being added on top of existing demands and pressures. In 1983 a report from the Division of Agriculture of the National Association of State Universities and Land-Grant Colleges (NASULGC, 1983) called for increased funding by the fed- eral government of at least $70 million per year in competitively ~. ~. . . awarded grants to support research and education programs in biotechnology related to agriculture. The report also stated that even a $70 million per year increase would provide funding as- sistance for only a small portion of the biotechnology programs needed to augment current agricultural research. Congress re- sponded to this and other recommendations for increased support with appropriations in FY85 and FY86 of $20 million to increase the competitive grants program in agricultural biotechnology. The federal government has not responded fully to the call for an in- creased financial comrn~tment for basic agricultural research. The Emergence of Biotechnology The emergence of biotechnology has stimulated and strength- ened the contributions of the basic science disciplines of molecular biology and molecular genetics to the agricultural research estab- lishment. It has also placed a stronger emphasis on basic research in cell biology, physiology, and biochemistry. A complete analysis and understanding of the structure, function, and regulation of a gene is usually needed before it can be used for a specific purpose. Such analysis requires a substantial investment of time, talent, and funds before practical applications can be devised. The types of products that can be developed using biotech- nology depend on earlier investments made in basic research. For example, scientists spent years isolating, purifying, and charac- terizing the coat proteins of the foot-and-mouth disease virus.

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FUNDING AND INSTITUTIONS 57 However, once they had the amino acid sequences of these pro- teins in hand, it took them only a few months' work with the tools of biotechnology to prepare subunit vaccines that protect against this costly cattle disease. Similar progress against other diseases will depend on obtaining basic knowledge of the disease agents in- volved. The development of genetically engineered animal growth hormones and plant herbicide-resistance traits were possible be- cause of the years of fundamental research invested in trying to understand the basic biology of these systems. In addition to requiring a large initial investment to acquire basic knowledge, biotechnology research approaches shorten the time between discovery and technology development. This is bringing about a greater confluence of basic and applied research interests. Tools of biotechnology are rooted in discoveries from basic research investigations conducted by the biomedical research com- munity. Although agriculture is predicted to be a major bene- ficiary of the advances brought about by biotechnology (OTA, 1983), the agricultural research system provided very little sup- port for early developments in biotechnology. Most of the support for research that established the theories and methodologies of biotechnology came from the National Institutes of Health (NTH) and the National Science Foundation (NSF), predominantly in the form of peer-reviewed, competitive grants. Furthermore, most of this research was conducted in private and public university de- partments with little or no direct connection to the agricultural sector. Table 3-1 shows levels of support to universities for basic, applied, and developmental research by the major federal research- supporting agencies. Although it is often difficult to make sharp distinctions among these three categories of research, the data show that, except for the Department of Defense, the USDA gives the least emphasis to basic research. A distinguishing feature of biotechnology is that its unique genetic products are often patentable. Prior to 1970, private sec- tor agricultural research in the United States placed relatively little emphasis on developing biological inputs, with the exception of hybrid seeds, and focused instead on machinery and chemical inputs. However, the Plant Variety Protection Act of 1970 and a 1980 U.S. Supreme Court decision (Diamond v. Chakrabarty)

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. 58 AGRICULTURAL BIOTECHNOLOGY TABLE 3-1 Expenditures in FY85 for R&D at Universities by Major Federal Agencies (millions of dollars Percentage Major SupportBasicApplied of Basic AgenciesResearchResearchDevelopmentTotal Researchi' - DOD'108.8178.4352.8940.0 43 DOE211.3124.621.6357.5 59 HHS2,091.4889.2166.93,147.5 66 NASA176.936.541.6255.0 69 NSF943.158.70.01,001.8 94 USDA142.6149.61.0293.2 49 Total funding3,974.11,437.0583.95.995.0 NOTE: DOD = Dept. of Defense; DOE = Dept. of Energy; HHS = Dept. of Health and Human Services; NASA = National Aeronautics and Space Administration; NSF = National Science Foundation; and USDA = U.S. Dept. of Agriculture. a Estimates reflect each agency's classification system and definition of basic and applied research. b Basic research calculated as a percentage of total estimated support. Values are rounded to the nearest whole number. SOURCE: Federal Funds for Research and Development: Fiscal Years 1985? 1986, and 1987, Volume XXXV, Detailed Statistical Tables. National Science Foundation. Washington, D.C. established the legality of obtaining patents for novel life forms. These actions have stimulatecl private investment in agricultural research, and over the past decade, private sector investment in biotechnology has grown sharply. Yet there have been financial casualties. It is difficult for a small company to survive the long gestation period of basic research needed before a product is devel- oped and profits can be realized. The private sector increasingly recognizes that its own progress in biotechnology development de- pends on the progress made in publicly supported basic research. Thus, in biotechnology there appears to be an alliance emerg- ~ng between public sector basic science and private sector technol- ogy development. For the most part, these alliances in biotech- nology include new participants who have not been part of the traditional agricultural research establishment. Their work and interests complement rather than replace the traditional, public and private agricultural research establishment. The major issue facing the application of biotechnology to agri- cultural problems is how to strengthen and link the new and tra- ditional research elements. Advances in basic biological research and applications of the tools of biotechnology are increasing the .

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FUNDING AND INSTITUTIONS 59 demand for both public and private sector applied research aimed at technology development and transfer. Meeting this demand is an urgent but formidable task, and will require a significant in- vestment in training and institutional development for research and technology transfer. INSTITUTIONS THAT SUPPORT AGRICULTURAL RESEARCH To examine the type of institutions needed to advance agri- cultural biotechnology, this section looks at who is conducting and funding agricultural research. It then examines the types of institutional and funding changes needed to apply the tools of biotechnology to agriculture more rapidly. USDA is the primary federal agency supporting agricultural research, but it is only one element in the nation's research system. Other federal agencies, such as the Department of Energy (DOE), EPA, NTH, NSF, and even the National Aeronautics and Space Administration (NASA) make direct and indirect contributions of varying degrees of importance. In addition, the states and the private sector provide extensive support for agricultural research. Together, this combination of federal, state, and private support has brought about significant progress in agriculture. Applying this same level of investment to biotechnology could revolutionize agriculture. The following discussion highlights the major institutions that support research related to agriculture and gives some indication of their involvement in biotechnology. For federal agencies, the total FY86 appropriation is given in parentheses. However, many of these agencies have only a minor interest in agriculture, and an even smaller interest in biotechnology, so only a small fraction of their research funds are used for these purposes. Federal Agencies U.S. DEPARTMENT OF AGRICULTURE Agricullural Research Service. The ARS is the primary in- tramural research agency of the USDA. It conducts research on a range of topics including soil and water resources, environmental quality, the biology and production of crop plants and animals,

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60 AGRICULTURAL BIOTECHNOLOGY pests, nutrition, marketing, and international trade. With an annual budget that just reached half a billion dollars (FY86 ap- propriation: $509.7 million), the ARS supports a network of 133 research centers located across the United States and abroad. Re- search programs are generally national in perspective and include high-risk, long-range research as well as applied goals. In addi- tion, the ARS maintains genetic stocks of farm animals and plant collections in clonal and seed repositories. Biotechnology research represents only a small part of the total agricultural research funded by USDA through ARS. According to data collected by the U.S. General Accounting Office (GAO, 1985), as of October 1984, ARS reported that it was conducting 183 biotechnology research projects with an estimated cost in FY85 of $26.4 million. Data collected the following year put the estimated FY85 expenditure for biotechnology research at $24.5 million (GAO, 1986~. Cooperative State Research Service. The CSRS administers federal funds provided for agricultural research at the SAESs and other eligible institutions (FY86 appropriation: $288.7 million). CSRS also participates in the national system of agricultural re- search planning and coordination, facilitating cooperation among state institutions as well as between state institutions and their federal research partners. In most states, federal funds account for less than one-third of the SAESs' total operating costs. More than half of the federal CSRS appropriation is dis- tributed under the Hatch Act (FY86 appropriation: $155.5 mil- lion). Hatch funds go to the states based on a formula estab- lished by Congress that considers the size of each state's rural and farm populations. The SAESs allocate the money for desig- nated projects according to their own priorities. Federal McIntire- Stennis funds support forestry research at SAESs (FY86 appro- priation: $13.0 million). A third category of support to SAESs are Special Grants (FY86 appropriation: $28.6 million), usually awarded by Congress and directed to specific agricultural problems at eligible cooperative institutions. The CSRS Competitive Research Grants (FY86 appropria- tion: $42.3 million plus $6.5 million for forestry grants) are peer- reviewed and awarded on a merit basis to competing research

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FUNDING AND INSTITUTIONS TABLE 3-2 Competitive Grant Funding per Principal Investigator in Agriculture, Biology, and Biomedicine \ 61 Sponsoring Agency USDA NSF DOE: Biological Energy Research Division NIH Average Grant Award per Yeara (FY86 Awards) $ 46,200b 70,000C 72,000 164,000 a Values given include both direct and indirect costs. b Competitive Research Grants Office, Forestry, and Small Business Innovation Research Grants. C Plant biology and biotechnology-related grants; the average grant size over the entire Directorate for Biological, Behavioral, and Social Sciences was $65,000. SOURCE: Personal communications from agency program directors, 1987. scientists throughout the U.S. scientific community. Competi- tive grants are given for research projects in animal and plant biotechnology, pest science, animal science, plant science, human nutrition, and forestry. (The forestry grants are a separate ap- propriation from the U.S. Forest Service, as will be described.) Funding for the competitive grants program increased from $16.4 million in 1984 to $51.7 million in 1985, but declined to $48.8 million in 1986. Of the 1985 funding, $19.2 million was for a component of the grants program to specifically support biotech- nology research. This represented 32 percent of the grants and 37 percent of the program funds awarded. In 1986, $18.0 mil- lion was allocated for biotechnology research, which is 36 percent of the program funds awarded. Thus, biotechnology-related re- search now constitutes a major part of the research supported by this grants program. Competition is keen for competitive research grants; only 19 percent of the proposals submitted in all areas were funded in 1985 and 1986. The average grants awarded in 1985 and 1986 were $102,000 and $92,400, respectively, for 2 years or about $51,000 and $46,200 per year (Table 3-2~; these amounts are far short of the level of funding required by a modern laboratory to do top-quaTity research in any of the fields represented.

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FUNDING AND INSTITUTIONS TABLE 3-8 A Companson of Data on Funding Levels Available for FY84 and FY85 on Biotechnology and Agnculturally Related Biotechnology Research by Selected Sources 79 Sponsor AGRICULTURALLY RELATED BIOTECHNOLOGY USDAa Agncultural Research Service Cooperative State Research Service: Competitive Research Grants Office Hatch Act and Special Grants SAKS (nonfederal support) b State funding Industry Private industry ALL BIOTECHNOLOGY a EPA FDA NIH NSF Amount (millions of dollars) 24.5 30.0 18.4 17.3 5.6 1~0.0 1.5 2.6 1,849.5 81.6 NOTE: EPA = Environmental Protection Agency; FDA = Food and Drug Administration; and SAKS = State Agncultural Expenment Stations. a FY85. Competitive Research Grants Office funding includes both specific biotechnology grants and additional biotechnology-related research covered by its other grants. Funding by non-USDA federal agencies may include some agriculturally related biotechnology research. SOURCE: Government Accounting Office, 1986. b FY84 data. C Estimate based on data from the Agncultural Research Institute, 1985. A Survey of U.S. Agncultural Research by Private Industry III. Bethesda, Md. SOURCE: National Association of State Universities and Land-Grant Colleges, 1985. information does give some indication of what different govern- ment agencies estimate they spend on biotechnology (see Tables 3-2 and 3-8~. Ultimately, the important consideration is the availability of adequate funding to support significant advances in biotechnol- ogy. What does it cost to make progress in agriculturally related biotechnology? The following is one estimate of the price tag on a discovery in biotechnology of value to agriculture.

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80 AGRICULTURAL BIOTECHNOLOGY DEVELOPING A DISCOVERY INTO A RESEARCH TOOL: THE COST OF THE AGROBACTERIUM TI PLASMID How much does it cost to take a discovery in molecular biology and develop it into a useful biotechnology? To arrive at an answer, other questions must be considered. For instance, how many sci- entists are working, in how many laboratories, and over how many years? How do you account for the related basic knowledge that laid the foundation for the discovery? How do you define what other variables are involved in calculating the true costs? The Agrobacterium Ti plasmid is one of the earliest biotech- nology success stories in plant research and is a classic example of how happenstance combines with years of effort to provide a useful research tool. The route to the discovery began at the turn of the century, with research on a plant disease called crown gall. USDA scientists discovered that Agrobacter'?~m [umefaciens was the disease agent. By the 1940s, about 20 scientists concentrated in three laboratories (one in the United States and two in France) were actively studying fundamental aspects of the disease. By the late 1960s the worldwide effort had grown to include about 40 researchers in 10 different laboratories. At first, the work was of interest to only a small group of people studying plant diseases. Then in 1979, following the discovery that the bacterium was actually transferring genetic material to higher plants, the research effort exploded. Scientists quickly saw the practical potential of this mechanism for gene transfer. About 40 scientists worked in 10 laboratories for 4 years reconstructing the Ti plasmas as a plant gene transfer system. Throughout the early 1980s, laboratory studies related to plant gene transfer and to the Ti system occupied the talents of up to 250 additional scientists. By 1986, at least 300 people working in about 25 laboratories worldwide were conducting research on both applied and fundamental aspects of the Ti plasmid system. The annual estimated cost of this research worldwide was about $45 million. (This amount assumes an average expense of $150,000 per scientist per year.) Adding up the costs of the research directly related to the development of the Ti plasmid gene transfer system gives only a general estimate of the expense of developing one technical break- through in biotechnology. Much of the research using the Ti

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FUNDING AND INSTITUTIONS ~1 plasm~d in plant gene transfer is being supported either by private industry or by competitive grants to universities. THE FEDERAL ROLE As stated earlier, the commitment to basic research is key to applying the promise of biotechnology to agriculture. Future di- rections and applications, as well as new technologies, will emerge from fundamental studies of metabolic pathways and the regula- tion of growth and development funded by federal research agen- cies. Private industry and state governments cannot be expected to invest significantly in such long-term, high-risk research. Up- front investment in the future of agricultural biotechnology is a federal responsibility. Gl~z~rl~r I Jan A h ~ an ohli cation to ster, un its support of biotechnology research. USDA could increase its emphasis on biotechnology in two ways: by adding more money or by redirect- ing existing money. Any increase in funding at USDA should not come at the expense of appropriations to other federal agencies that support research relevant to agriculture. Redirection of some existing research program funds must also occur within the USDA budget to heighten the priority given to biotechnology. This redi- rection can be done most effectively by a substantial increase in research awards through the Competitive Research Grants Once Program. ~O Greater emphasis is needed on agricultural biotechnology with- in both the USDA and the NSF to maintain the nation's com- petitive position in agriculture, technology, and world markets. Given the current average cost of $173,000 per year to support a research scientist at an SAKS and a projected demand for 3,000 active scientists working in biotechnology research related to agri- culture (see Chapter 4), federal funding should be increased in this area to about $500 million per year by 1990. This support should be administered by the primary federal agencies support- ing agricultural biotechnology (USDA and NSF) in the form of peer-reviewed, competitive grants. Integration of Agricultural Research Disciplines Agricultural research depends on basic science, applied sci- ence, technology development, and technology transfer (including

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82 AGRICULTURAL BIOTECHNOLOGY extension). In realigning the research system to promote advances in biotechnology, communication must be maintained among ba- sic researchers, applied researchers, and the farmers and private companies who use the technology. If the system is to be effective, we must strengthen both the links among disciplines of science supporting agriculture and the links between basic and applied research and technology development and transfer. Integration of different disciplines is important because it fa- cilitates the blending of skills and knowledge. For example, the fields of biology and chemistry have been integrated in biochem- istry. Cytology and genetics have come together to provide new insights into gene identification. In addition, the already hybrid fields of biochemistry and chemical engineering have joined forces in developing bioprocess and fermentation technology. Integra- tion of basic and applied research and technology development and transfer is particularly important in biotechnology because this field has developed from the confluence of basic science and technology development. Integration of research from basic science, to applied science, to technology development, and then to technology transfer has traditionally been carried out by land-grant universities, and these institutions will continue to play an important role in the future. Yet new institutional forms are now emerging outside the tradi- tional land-grant system as efforts mount to improve efficiency in the development of profitable technology. These new forms of integration are being encouraged in part by the rapid growth of private sector research in biotechnology. LAND-GRANT UNIVERSITIES Land-grant universities are well suites! to foster the inte- gration of research to develop and apply biotechnology because of their tripartite structure teaching, research, and extension. Land-grant universities with strong basic science departments are able to mount a continuum of activities ranging from fundamental research, to applied research, and then to extension. Coopera- tive extension provides a feedback mechanism to let researchers know whether the technologies they develop are appropriate to the needs of their clientele. Because of federal budget cuts in formula funding for both research and extension, the research programs

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FUNDING AND INSTITUTIONS 83 of these land-grant universities depend increasingly on financing through competitive grants from both public and private sources. Although this increased dependence on grants should improve the quality of scientific research, feedback between the clientele and scientists has been weakened considerably. Thus, both the quality of research and its relevance to the end users must be taken into consideration in the research review process. To foster the integration of research, there must be an envi- ronment within the university that encourages cooperation across departments and colleges, and across basic and applied research entities. A key to this environment is the recruitment of high- quaTity faculty in all areas. The reward system of the university should also be responsive to and supportive of integrated programs if these are to succeed. Integration in agricultural research should be promoted and supported. Universities need to establish graduate programs that cut across departmental lines; recognize and reward faculty contri- butions to cooperative research programs; promote collaborative projects and exchanges between researchers in land-grant univer- sities, non-land-grant schools, industry, and government laborato- ries; and recruit faculty to create interdisciplinary research teams that can attract competitive funding. NEW INSTITUTIO NAL F O RMS New institutional forms can be created to help facilitate the integration of biotechnology research. One example is the creation of centers focused on one or more specific agricultural issues. The publicly supported Michigan Biotechnology Institute (discussed in Chapter 5) is one example of a center that integrates basic and applied research. This center, located near Michigan State Uni- versity, focuses on the applications of biotechnology to renewable resources that benefit the state. It conducts both basic and applied research aimed at developing and patenting new technologies and products. If this organization is successful, similar institutions are certain to develop. Other linkages are being established between applied research institutions or businesses and basic research centers. For example,

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84 AGRICULTURAL BIOTECHNOLOGY the Rockefeller Foundation Is funding a program on biotechnol- ogy for rice, which will link the work of scientists at the Inter- national Rice Research Institute in the Philippines with that of scientists in basic research laboratories in the United States and Europe. The seed company Pioneer Hi-Bred International, Inc. has given a grant to Cold Spring Harbor Laboratory in New York and will station one of its scientists at this basic research institute. Other collaborative research programs, such as the Cornell Univer- sity Biotechnology Program (discusser] in Chapter 5), link private company researchers and university basic research programs. NEW APPROACHES TO AGRICULTURAL BIOTECHNOLOGY Several steps could be taken to encourage the integration of research. Federal and state governments should support the es- tablishment of collaborative research centers, promote interdisci- plinary conferences and seminars, support sabbaticals for govern- ment scientists and other exchange and retraining programs with universities and industrial laboratories, and provide funding for interdisciplinary project grants. GRANTS FOR INTERDISCIPLINARY RESEARCH In biomedical sciences and human health, it is not uncommon for articles published in scientific journals to have a half dozen or more coauthors. Multiple authorship often reflects productive interdisciplinary collaboration. In the agricultural sciences, the tradition of individual achievement is still strong. There should be a significant increase in grants designed to encourage inter- disciplinary research, such as those sponsored by the McKnight Foundation (see Chapter 4~. COLLABORATIVE GROUPS AND EXCHANGES The land-grant universities potentially have a strong capacity for interdisciplinary and collaborative research efforts in agricul- tural biotechnology. Private universities, in contrast, have few agricultural science-related disciplines. However, private univer- sities do have reservoirs of talent in basic sciences that are es- sential for biotechnology development. It would be highly ad- vantageous for the development of agricultural biotechnology to

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FUNDING AND INSTITUTIONS 85 promote both Tong-term collaborations and temporary exchanges among land-grant and other public and private research univer- sities. For instance, USDA agronomists and other agricultural scientists should be encouraged to take sabbaticals at non-land- grant institutions. Longer term collaborative projects between land-grant and non-land-grant institutions would help pave the pathways of information exchange. Exchange of personnel between public-sector research insti- tutions and private companies engaged in research should also be encouraged. Research in the private sector tends to have a stronger focus on teams, and the reward system is often more conducive to interdisciplinary research. LARGE LABORATORY GROUPS Large, autonomous laboratory groups can also function effec- tively to pursue some biotechnology-oriented research goals. Such groups are especially needed at universities that have limited fac- ulty in areas such an plant science. A large laboratory with 15 or more scientists will have the manpower and resources to attack research problems that cannot be effectively handled by small laboratories or by individual scientists working in isolation. RESEARCH CENTERS The NSF has been instrumental in setting up 11 Engineering Research Centers, each of which is based at a university selected through rigorous competition. These centers receive substantial funding from industry as well as from the federal government. They bring together academic and industrial researchers to attack specific scientific problems in a multidisciplinary setting. Exam- ples of this approach initiated in biotechnology include MIT's Biotechnology Process Engineering Center and Cornell's Biotech- nology Research Program. The center concept can be extended to integrate basic science and technology development activities.

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86 AGRICULTURAL BIOTECHNOLOGY RECOMM} :NDATIONS LINKING AND INTEGRATING RESEARCH The tools and approaches of biotechnology are equally relevant to science-oriented research and technology-oriented research. Bio- technology can strengthen as well as benefit from improved link- ages between basic scientific research and research to adapt tech- nology to agricultural problems. Equally important, different dis- ciplines within biology and agriculture can collaborate to integrate knowledge and skills toward new advances in agriculture. New approaches to agricultural research are needed to es- tablish strong and productive linkages between basic science and its applications as well as interdisciplinary systems approaches that focus a number of skills on a common mission. Just as biochemistry, genetics, molecular biology, and fields of medicine have successfully joined forces to solve medical problems, integra- tion of these scientific disciplines for agricultural research must be promoted and supported by appropriate recognition and reward through university, industry, and government channels. First, universities should establish graduate programs that cut across departmental lines; recognize and reward faculty contri- butions to cooperative research programs; promote collaborative projects and exchanges between researchers in land-grant univer- sities, non-land-grant universities, industry, and government lab- oratories; and recruit faculty to create interdisciplinary research programs that can attract competitive funding. Faculty should be selected by departments or groups representing two or more disci- plines (e.g., genetics and entomology or biochemistry and botany). Second, federal and state governments should support the establishment of collaborative research centers, promote interdis- ciplinary conferences and seminars, support sabbaticals for gov- ernment scientists and other exchange and retraining programs with universities and industrial laboratories, and provide funding for interdisciplinary-program project grants.

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FUNDING AND INSTITUTIONS 87 PEER AND MERIT REVIEW A peer and merit review process must be used to assess and guide the development of the agricultural biotechnology research system, including all steps from basic science to extension. The participants and procedures in the review process should be organized to match the nature of the tasks and programs re- viewed and must include individuals outside the organization as well as experts from relevant disciplines and from basic and applied research programs. Efforts must be made to broaden the expertise represented on review panels in order to best examine the quality and relevance of work with minimal bias. The benefits of peer and merit review- properly done and heeded are continuous monitoring of research advances; more efficient, relevant, and higher quality research; and increased communication and respect among scientists. THE FEDERAL GOVERNMENT'S ROLE It is logical that primary funding for agricultural biotechnol- ogy should be achieved through the USDA. Unfortunately, funding for both intramural and extramural basic research within USDA is well below that of other federal agencies. USDA has recognized the need to support basic research and is attempting to do so, albeit not as rapidly as might be optimal. Funding increases are needed. Allocation of new and even redirected funding should be based principally on competitive peer and merit review. Any increase in funding at USDA should not come at the expense of appropriations to other federal agencies that support biological research relevant to agriculture. This is because it is not always clear where innovation applicable to agricultural biotech- nology might arise. However, some existing research program funds should be redirected within USDA to heighten the prior- ity given to biotechnology. USDA should also emphasize related fundamental research on animals and plants, the lack of which is impeding the application of biotechnology to livestock and crop improvement. Funding for competitive grants through USDA must be of a size and duration sufficient to ensure high-quality, efficient research programs. The recommended average grant should be increased

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88 AGRICULTURAL BIOTECHNOLOGY to $150,000 per year for an average of 3 years or more. This level of funding is consistent with the current average support per prin- cipal investigator used by industry and USDA/ARS intramural research programs. The duration of these competitive grants is also in accord with the recent recommendation: Of equal importance with the level of funding is the stabilization of federal support to permit more elective use of financial and human resources.... Federal agencies ishould] work toward an average grant or contract duration of at least three, and preferably five, years. tWhite House Science Council, 1986) The committee recommends that competitive grants by all agencies in the federal government for biotechnology research re- lated to agriculture total upwards of $500 million annually, a level that could support 3,000 active scientists. This level of support should be achieved by 1990, primarily through competitive grants administered by USDA and NSF. THE STATE GOVERNMENTS' ROLE States should continue to strengthen their already major role in agricultural research and training through their support of uni- versities and research stations that conduct regional research. They should continue to focus on identifying regional interests and on supporting the training of personnel needed in agriculture. The states should also evaluate programs in agricultural biotech- nology and the role such programs can and will play in each state's economy. THE PRIVATE SECTOR'S ROLE The private sector's traditional emphasis on product devel- opment is not likely to change, even though there h" been a dramatic increase since 1980 in private sector investment in high- risk basic research in agricultural biotechnology. Because public sector investment provides skilled manpower and the knowledge base for innovation, industry should act as an advocate for publicly supported training and research programs in agricultural biotech- nology. Industry can also support biotechnology research through direct grants and contracts to universities, cooperative agreements with federal laboratories, and education to inform the general pub kc about the impacts of agricultural biotechnology.

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FUNDING AND INSTITUTIONS 89 Foundations should be encouraged to support innovative sci- ence programs in order to maximize their potential for having sub- stantial influence in important areas. The McKnight Foundation's interdisciplinary program for plant research and the Rockefeller Foundation's efforts to accelerate biotechnology developments in rice are noteworthy examples. Other foundations should address equally important experiments in technology transfer and exten- sion for agricultural biotechnology.