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4 Setting the Research Strategy To make progress toward the research frontiers identified in Chapter 3, the US Department of Agriculture (USDA) Research, Education, and Economics (REE) mission area will need to be responsive to and direct research toward the changing context and role of US agriculture. Examples of that change are agriculture's broadening scope, shifting opportunities in world markets, new sci- entific discoveries and paradigms, and the private sector's expanding research efforts. This chapter addresses REE's ability to respond to change by exploring its capacity for setting priorities, for making discretionary changes in resource allocation, and for understanding and working with a broad array of stakeholders. Many cross-cutting, complementary, and contradictory forces help shape pri- orities and resource allocations for agricultural research and education. There are problems to solve, stakeholders to serve, agencies to collaborate with, and knowl- edge to generate and disseminate. Authorization and appropriation legislation lays the foundation for focus and funding. Congressional earmarks annually add a set of research projects identified by largely political rather than scientific criteria. Each incoming administration brings its own initiatives to the table. Finally, USDA and the REE agencies develop broad goals and objectives through periodic strategic planning and performance reporting mandated by the Govern- ment Performance and Results Act (GPRA) (US Congress, 19931. Stakeholder input drives REE priority-setting at all levels through congressional lobbying and through mechanisms established in the 1998 Agricultural Research, Extension, and Education Reform Act (AREERA) (US Congress, 19981. The annual budget process wraps together processes and priorities that emerge at all four levels- Congress, the administration, the department, and agencies. 67

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68 FRONTIERS IN AGRICULTURAL RESEARCH FUNDING SOURCES AND TRENDS Appropnations by the US Congress set the bounds for research conducted by REE agencies. Although those appropriations have grown in synchrony with other nondefense research expenditures, their share of overall support for agncul- tural research in the United States has declined as private and state research in- vestments have increased. Congress and the executive branch routinely circum- scnbe the direction and use of federal funds for agricultural research through earmarking and other means. Trends in Federal Funding of Agricultural Research Total REE funding was almost constant in 2000 dollars from 1985 to 2001 (Figure 4-1; Appendix Table F-1~. Funding for the Agncultural Research Service (ARS) grew slightly by 2001; however, real funding for the other agencies, particu- larly the Economic Research Service (ERS), declined slightly. The Cooperative State Research, Education, and Extension Service (CSREES) funding vaned, with a large decline in 1998 resulting from discontinuation of facility funding and a large increase in 2000 resulting from funding increases to the Initiative for Future Agn- culture and Food Systems (IFAFS) and Fund for Rural America (FRA) programs. ~ 2,500 o of 2,000 cot in In 0 1,500 In o . _ . _ ~ 1, 000 . _ o ~ 500- m 0 ~ . ~ ~: 1 1 ARS -a- CSREES -a- ERS ,( NASS =~ Total 1985 1987 1989 1991 1993 Year 1995 1997 1999 2001 FIGURE 4-1 Research, Education, and Economics budget authority by agency for FY 1985-2001 and 2002 estimate, in constant 2000 dollars. Source: USDA Office of Budget and Program Analysis (USDA, 2002a).

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SETTING THE RESEARCH STRATEGY 69 USDA is part of a much larger and complex R&D system. Assessing the significance of the REE funding levels requires consideration of other federal research agencies and total public-sector (including state) and private-sector expenditures for agricultural research. USDA research appropriations have grown at about the same average rate as total nondefense research expenditures since 1976 in the federal government, but growth has slowed since 1996. Appendix Table F-2 shows federal research expenditures by agency over time in constant 2000 dollars (AAAS,2002~. USDA research expenditures increased by 24% from 1976 to 2001. Over the same period, the percentage rate of budget growth was 157% at the National Institutes of Health (NIH) and 46% at the National Science Foundation (NSF). The USDA share of federal nondefense expenditures peaked in 1986 at 5.7% but has since declined, reaching its lowest point in 16 years in 2001 (4.8%~. In comparison, the NIH FY 2001 budget accounted for 43% of the nondefense budget, and the NSF FY 2001 budget accounted for 7.3% of the nondefense budget. Above-average growth in nondefense agencies, such as NIH and NSF, accounts for part of the change, reflecting society's growing concern with health and increased willing- ness to fund basic research. If NIH funding, which skews other comparisons, is excluded from the FY 2001 nondefense R&D budget, USDA accounts for nearly 10% of the total nondefense budget and is the fourth-largest supporter of R&D, after the National Aeronautics and Space Administration (NASA), the Depart- ment of Energy (DOE), and NSF. Despite the decline, USDA remains the sixth- largest supporter of R&D in the federal government and supports 7% of federal research in the life sciences and 11 % in the social sciences (NSF, 2002b). Total expenditures for all public and private agricultural research were roughly $8.5 bil- lion in 1998 (2000 constant dollars), of which $4.9 billion was in the private sector and $3.6 billion in the public sector. REE resources were about $2 billion of the $3.6 billion. Private agricultural R&D expenditures have grown at more than twice the rate of public agricultural research expenditures over the last decade (Figure 4-2; Appendix Table Fob. USDA is an integral part of the agricultural-research system at the state level because it provides research support to the state agricultural experiment stations (SAESs). State recipients of the funds include not only the SAESs but also the 1890 universities, the schools of forestry, the colleges of veterinary medicine, and other cooperating institutions (which are few). In 2000, of the total of $365 million of research funding from REE, 80% went to the SAESs, 9% to the 1890 universities, 2.7% to the schools of forestry,1.9% to the veterinary colleges, and 6% to other institutions (USDA, 2000d). On the average, the SAESs fared better iThe 1890s institutions were created as a result of the Second Morrill Act of 1890 (US Congress, 1890), expanding the 1862 system of land-grant universities to include African American institutions. There are 17 1890s institutions including one private institution, Tuskegee University located pri- marily in the Southeast.

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70 9'ooo ~ 8,000 7,000 on 6 000 Cal ' ~ 5,000 In o 4 000 c' ' - ~ 3,000 o ~ 2,OOO ~ FRONTIERS IN AGRICULTURAL RESEARCH 1 1 Total Agricultural R&D _~ 1 ,000 - O- 1 970 ;:~ Private R&D Funding . ~ ~ Public R&D Funding 1975 1980 1985 Year 1990 1995 2000 FIGURE 4-2 Total public and private expenditures, 1970-1998, in constant 2000 dollars. Source: USDA-CRTS Inventory of Agricultural Research (various years); Available at http://www.ers.usda.gov/data/agresearchfunding/; updated from Klotz etal.(l995~. Over the last 2 decades than the USDA research institutions, growing from $1.89 billion (in constant 2000 dollars) in research funding in 1980 to $2.23 billion in 2000 (Appendix Table Fob. Funding of intramural research institutions declined from $948 million in 1980 to $870 million in 2000 (Appendix Table Fog. The growth in funding of the SAESs resulted in part from increases in non-USDA federal contracts and grants, which now make up 12.8% of total SAKS research funding and approach the level of support received through all USDA funding mechanisms. Increased support of the SAESs from industry, commodity groups, and foundations also contributed to the growth in funding. USDA support is thus playing a declining role in SAKS funding, having declined to 16.5% of the total from 28.4% in 1980 and 26.1% in 1990. In the future, vision and leadership would be required for USDA to influence the research directions of the SAESs, given that it contributes only a small share of total SAKS research funding. It may be useful to put US agricultural-research investment into international perspective as well. One indicator of the commitment to public agricultural research is the ratio of agricultural R&D to national agricultural output, as measured by agricultural GDP; this indicates the intensity of investment in agri- cultural research. The intensity of US investment in public agricultural research can be compared with that in other developed countries. In 1993, the United States spent $2.45 on public agricultural R&D for every $100 of agricultural output, ranking last when compared with the United Kingdom (2.9), New Zealand (3.09), Australia (3.66), The Netherlands (3.92), and the average of all developed countries (2.75) in agricultural-research intensity (Pardey et al., 1999~.

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SETTING THE RESEARCH STRATEGY 71 FINDING: Federal nondefense expenditures have grown faster for health research and for basic research than for agricultural research, and private-sector expenditures for agricultural research now exceed public-sector expenditures. Funds from USDA are declining in impor- tance in SAKS funding. The US investment in agricultural research rela- tive to agricultural GDP is below average among all developed countries. The department faces increased challenges in providing leadership for agricultural R&D, in being strategic in use of its limited funds, and in realizing the complementary benefits of agricultural research with other publicly funded research. Earmarking, Special Grants, and National Initiatives Congressional earmarks for research funding play a special role in determin- ing how research resources are allocated (Huffman and Evenson, 1993~. Ear- marks include projects, facilities, instruments, or other academic or research- related items that are directly funded by Congress. Members of Congress generally identify earmarks in response to lobbying by academic institutions, individual researchers, or other special interests. Budgets appropriated to REE in FY 2002 included $225 million (10% of the total budget) in earmarks. In FY 2002, earmarks appropriated to ARS (about 174) amounted to $89 million, and earmarks appropriated to CSREES (about 246) $136 million (US Congress, 2001a, 2001b,2001c, 2002a; USDA, 2001b). Congressional earmarks since 1993 for ARS research and CSREES research, education, and extension appear to have increased, as summarized in Appendix Tables F-lOa and F-lOb. The ERS and National Agricultural Statistics Service (NASS) budgets included no earmarks.2 In contrast to federally funded agricultural research, federally funded basic research and health research are not heavily earmarked. NSF carries very few earmarks. In FY 2002, for example, NSF reported two earmarks totaling $50 million, or 1% of the total budget of $4.8 billion. NIH also reported very few earmarks. In FY 2002, for example, only the National Center for Research Resources, the Office of AIDS Research, a project in buildings and facilities appropriation, and the National Library of Medicine were earmarked, totaling $1.4 billion, or 6.8% of the total NIH budget (US Congress, 2002b). Within the entire Department of Health and Human Services (DHHS), $142 million, or 0.6% of the total research budget, is allocated to research performed at congressional direction (OMB, 2002a). 2The FY 2002 $9.2 million in food program and evaluation funds at ERS and the $25.5 million at NASS for the Agricultural Census represent the transfer of a program from one agency (the Food and Nutrition Service and the Commerce Department, respectively) to another.

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72 FRONTIERS IN AGRICULTURAL RESEARCH Although CSREES administers a category of earmarks called "special grants programs" the agency has no power over the choice or amount of funding; the funds are awarded on the basis of political priorities rather than through an exter- nal peer-review process or a legislated formula. Although recent legislation (US Congress, 1998) reduced the length of special grant awards from 5 years to 3 years, repeated appropriations can still occur. Although the outcome of the funding process for such grants is beyond the control of REE agencies, they do have complete control over the process for awarding such grants. Many federal agencies, such as the Environmental Protec- tion Agency (EPA), require a proposal from the recipient and subjecting it to external peer review. If scientific deficiencies are identified, agencies may insist that these be addressed before the grant is awarded. CSREES reported to the committee in its telephone interviews that it has also used peer-review mecha- nisms to improve the quality of science in special grant proposals. Shifts in national priorities can and should cause dramatic changes in the focus of food and agricultural research. Examples of special initiatives include some with a wide-ranging focus, such as the National Food Safety Initiative cre- ated by executive order in 2000, and some that are more narrowly focused, such as those addressing biobased products and bioenergy. The FY 2003 budget request for ARS, for example, included proposed increases in funding of several initiatives: emerging, re-emerging, and exotic diseases of animals ($8 million), biosecurity ($5 million), emerging and exotic diseases of plants ($5.4 million), and new uses for agricultural products ($9 million) (USDA, 2001b). Special initiatives may originate in the administration or in Congress; they may respond to either broad or narrow (for example, commodity-focus) concerns or constituencies. Special initiatives may not necessarily be accompanied by additional resources. In most cases, they require reallocation of human and financial resources in the REE agencies or research institutions and potential dis- ruptions in other important research programs. Some of the more narrowly focused national initiatives are similar to the special grants awarded by CSREES that also bypass normal formula-based and competitive funding mechanisms. Unlike special grants, however, a national initiative may be intended for one particular research institution. FINDING: Earmarks and national initiatives reflect the needs of par- ticular stakeholders as articulated through the political process. Quality- assurance mechanisms, such as peer review, offer a way for REE agen- cies to improve the scientific quality of a special grant once it is awarded. REE AND AGENCY DECISION-MAKING A combination of REE and agency strategic planning, congressionally man- dated funding mechanisms, and discretionary decisions by the REE agencies and

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SETTING THE RESEARCH STRATEGY 73 state recipients of formula funds determines the allocation of appropriated funds to various research needs. A relatively small proportion of USDA resources is available for flexible use to address new and emerging research needs. Strategic Planning The last 2 decades of the 20th century brought strategic planning and priority- setting to industrial and marketing firms. The GPRA extended strategic plan- ning, priority-setting, and accountability to all federal agencies (US Congress, 1993~. The GPRA requires strategic planning and annual program-performance reporting by every agency of the federal government, including the REE agencies. The legislation was stimulated by the perceived needs in Congress for greater accountability to taxpayers for the performance of federal programs and for better planning of federal programs. More strategic planning has been accomplished, but the committee concluded that the alignment among the agencies' individual strategic plans and the plans' connection to agency missions and actions are uneven at best, as is the agencies' implementation of effective performance measures. Looking across the REE agencies yields a mixed picture of how well the agencies are positioned to adopt this report's vision for agricultural research (Chapter 1) into their strategic planning, according to the committee's analysis of the agencies' 5-year strategic and performance plans, lists of "future challenges" submitted to the committee, and identification of recent program accomplish- ments (USDA, 1997, 1999a, 2000a, 2000c, 2000e, 2000f, 2001a, 2001c). RECOMMENDATION 2: The REE agencies need to identify clearly their unique positions relative to the other components of the agricul- tural-research system, identify high-impact activities through which targeted funding and resources could generate substantial and measur- able progress toward meeting national needs, and coordinate planning and research support across the agencies to minimize unnecessary duplica- tion and maximize effectiveness. Those efforts should be informed by a clear articulation of the major national priorities for research and educa- tion and a system for anticipating, reporting on, and identifying strate- gies to address emerging research needs. Neither coordination with other research institutions nor strategic position- ing currently appears to play an important role in the REE agencies' short- or long-term planning. For example, there is little evidence that the agencies explicitly set priorities according to where their research investments might play a unique or critical role or yield the greatest impacts in advancing national goals. Similarly, there appear to be no mechanisms for reviewing the research portfolios of the various REE agencies in specific topics to evaluate their combined ability to make progress toward meeting national needs. Instead, with few exceptions,

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74 FRONTIERS IN AGRICULTURAL RESEARCH current coordination appears to be largely piecemeal and ad hoc. Among the stated goals of the REE agencies, the committee was unable to identify with any clarity the top few concise research goals that they are collectively seeking to meet. In response to GPRA and other directives under the 1998 AREERA (US Congress, 1998), each REE agency appears to have developed its strategic plan independently, in spite of the frequent meetings of the REE undersecretary and senior members of the four agencies to ensure that the strategic plans would con- form to the GPRA and AREERA processes and meet USDA criteria. Some REE agency plans seem to lack alignment with the larger USDA goals and plans; a clear example is the mismatch between projected work of NASS with the over- arching environmental goals and objectives in USDA's strategic plan (USDA, 2000f, 2000h, 2001d). FINDING: The committee finds that REE priorities would be strength- ened if planning activities were more integrated, aligned, and collabora- tive among the agencies. It is difficult to evaluate the agencies' collective progress toward accomplishment of major national goals. Allocation of Resources to Strategic Goals Two important consequences of misalignment among agency plans and lack of focus are the inherent difficulty of accurately tracking research funding vis-a- vis today's goals and the potential difficulty of tracking funding in the future, especially as goals expand and diversify. For example, the REE agencies adopted five strategic goals that were developed in 1996 and are loosely connected to four strategic USDA goals (USDA, 2000h; 2002b); in contrast, ARS tracks expendi- tures for 22 national program areas, and the Current Research Information Sys- tem (CRIS) tracks activities on the basis of research problem areas. Comparison of research across agencies is virtually impossible given the lack of standard definitions of research categories and nonuniform tracking methods. Figure 4-3 (Appendix Table F-6) shows the distribution of REE funds for the five REE strategic research goals. In the committee's view, the strategic plan does not seem to guide resource allocation. About half the current REE resources is devoted to traditional agricultural productivity (goals 1 and 2), and the other half supports programs in human health, environment, and rural communities. Similarly, the CRIS data shown in Appendix Table F-7 demonstrate that about half the REE funds supports traditional agricultural productivity and enhance- ment, 15% human health, 15% the environment, and smaller amounts to food processing and socioeconomic research. FINDING: REE invests substantially in the broad array of research goals related to agriculture, food, health, environment, and communi-

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SETTING THE RESEARCH STRATEGY Goal 5: Enhance economic opportunities and the quality of life among families and communities Goal 4: Achieve greater harmony between agriculture and the environment \ Goal 3: Achieve a healthier, more well- nourished population 75 Goal 1: Achieve agricultural production that is highly competitive in the global economy Goal 2: Provide a safe and secure food and fiber system FIGURE 4-3 FY 2000 funding allocation by REE goal (also see Appendix Table F-6~. Source: Agency FY 2001 Performance Plans (USDA 2000a, 2000c, 2001a, 2001c). ties. However, research in agricultural productivity still has the domi- nant share of research resources, particularly in intramural research. Furthermore, within each of the broad goals it is difficult to determine, given the limitations of existing investment tracking mechanisms, whether REE is addressing the most important opportunities. RECOMMENDATION 3: The REE agencies should direct new and existing resources that currently support agricultural productivity research toward new research opportunities in health, environment, and communities. (Research opportunities are identified in Chapter 3.) Directing Research Toward USDA Action Agencies' Needs The USDA action agencies3 constitute a special group of clients for REE research because of their shared obligation to advance USDA's overall mission and goals. With USDA's reorganization in 1994, research functions for regula- 3USDA action agencies administer government programs mandated through the department. USDA action agencies are the Agricultural Marketing Service; the Animal and Plant Health Inspection Service; the Center for Nutrition Policy and Promotion; the Farm Service Agency; the Food and Nutrition Service; the Food Safety Inspection Service; the Foreign Agricultural Service; the Forest Service; the Grain Inspection, Packers, and Stockyards Administration; the Natural Resources Con- servation Service; the Office of Community Development; the Risk Management Agency; the Rural Business Cooperative Service; the Rural Housing Service; and the Rural Utilities Service.

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76 FRONTIERS IN AGRICULTURAL RESEARCH tory and action agencies were placed in REE to ensure scientific objectivity. The committee interviewed senior administrators of the action agencies about their interactions with REE agencies; the quality, timeliness, and usefulness of the research products delivered; their views of the capacity of REE agencies to meet future needs; and suggested improvements (see Appendix E). Action agencies described a number of formal and informal processes for communicating their research needs to the REE agencies, including informal scientist-scientist interactions, ad hoc arrangements, formal memoranda of under- standing, annual meetings, such bottom-up processes as the Partnership Manage- ment Agreement,4 coloration of facilities with ARS laboratories or land-grant university campuses, involvement of action-agency researchers in research projects, and hiring of a permanent agricultural-research coordinator to interact with the REE agencies. Informal mechanisms were considered effective, but many agencies were in the process of formalizing the mechanisms for interaction, and some felt that more formal processes would be better. Colocation of staff on ARS facilities and hiring of a full-time staff member as liaison were cited as mechanisms with substantial benefits. Suggested improvements included greater discretion in the REE agencies to target money toward high-priority issues, better coordination and communication (in both directions), and greater engagement of action agencies in REE requests for proposals (RFPs) and stakeholder sessions. Responsiveness and timeliness were cited as subject to improvement, although action agencies did provide examples of REE responsiveness to data and research needs. Many agency administrators described a divergence between REE research and action-agency needs. The quality of research was generally considered excellent but sometimes not usable or not aligned with research needs of the action agencies. Delivered research products were sometimes too complicated to be used easily or were not tailored to the action agency's needs. Some agencies also noted that REE agency staff did not always have the right mix of skills to help them. Several agency administrators cited examples in which REE had addressed short-term needs effectively, but all the agency representatives inter- viewed expressed concern that REE was weak in addressing their longer-term and emerging needs, funding follow-up research, and conducting applied research, systems-level integrated research, and research on programmatic, policy, or accountability questions, such as program redesign. Lack of up-to-date data was cited as a concern by one agency. The absence of incentives in REE for doing such research, which tends not to result in peer-reviewed publications, was cited 4The Partnership Management Agreement is a 3-year-old memorandum of understanding between CSREES, ARS, and NRCS. It is a process to extract and set priorities for research needs from the Natural Resource Conservation Service's (NRCS) 3,000 field offices, which are transmitted to the research community. The Partnership Management team comprises representatives of ARS, CSREES, and NRCS, with disciplinary expertise in engineering, biology, resource economics, and so on.

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SETTING THE RESEARCH STRATEGY 77 as a possible reason for these deficiencies, and restructuring the REE rewards system to provide incentives for doing applied or integrated research for the action agencies was proposed as a possible improvement. Action agencies noted that they lacked formal mechanisms for assessing the quality of REE support. Devel- oping formal monitoring capability and increasing action-agency expertise to evaluate research products were cited as possible improvements. Several action- agency representatives spoke of the need for greater flexibility to seek expertise from federal, academic, or private institutions and noted that they have sought or would like to seek expertise from a variety of other institutions: consultants, private universities, and other federal agencies. Some considered these institu- tions capable of addressing applied-research needs more quickly or better than the REE agencies. For example, traditional agricultural colleges and ARS are not equipped with technology and expertise in such fields as x-ray technology and . . . . non~nvas~ve mon~tonng. The committee believes that allocating discretionary resources to action agen- cies for research could contribute to meeting action-agency research needs more effectively. REE would be well placed to receive these resources, but a more competitive mechanism would create greater accountability and transparency in terms of carrying out research designed to meet the needs of action agencies. One caution in considering this option is that provision of research services by REE helps to keep action agencies honest by providing answers to research ques- tions that may or may not be the desired answer. Scientific expertise in the action agencies or external reviewers should be called on for help in evaluating the scientific merit of research conducted by multiple players, thereby ensuring that action agencies do not simply contract out for the answer that meets their needs. An additional caution is that the provision of discretionary funding of action agen- cies should in no way interfere with REE's mandate to conduct nonremunerated research that serves action agencies. FINDING: REE has a mixed track record in meeting needs of action agencies. More-effective mechanisms are needed for directing research toward the action agencies' long-term and emerging needs. Research Funding Mechanisms Mechanisms established by each REE agency's authorizing and appropria- tions legislation determine the processes by which funds, capacity, and resources are allocated to various research needs. Primarily four mechanisms are involved: formula funds, peer-reviewed grants, special research grants, and intramural funds (Figure 4-4; Appendix Tables F-8a and F-8b). Each makes a unique contribution to the fabric of agricultural research, and the diverse portfolio of approaches reduces risk. Because of differences in funding mechanism, levels of flexibility and discretionary decision-making vary substantially among the REE agencies.

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SETTING THE RESEARCH STRATEGY 85 1. Total competitive grants should be substantially increased to and sustained at 20-30% of the total portfolio. 2. Action agencies should receive or control discretionary funds to be used to meet critical programmatic needs complementary to those currently served by REE agencies. The agencies could thereby fund intramural USDA scientists, other agency scientists, or university researchers competitively on the basis of the researchers' availability and match of expertise to agency needs. 3. The REE agencies should pursue complementary research activities and tap broader expertise by dedicating a higher percentage of new funds to cooperative arrangements, to be awarded on a competitive basis for large awards, with academic or other public-sector researchers. 4. Congress should increase REE budgetary flexibility to move resources toward emerging and emergency needs. Ensuring Relevance and Informing Decision-Making Through Stakeholder Input AREERA (US Congress, 1998) requires USDA to consider recommenda- tions from people who conduct or use agricultural research, extension, or educa- tion in setting department and agency priorities. The legislation has resulted in numerous changes, many just starting to be implemented, that have fundamen- tally altered how REE sets priorities. The most substantial change is that each REE agency now invites input from a wide variety of stakeholders into its research activities. Who Are the Stakeholders? This report uses the word stakeholder in its broadest sense to mean any person or group that uses or is affected by the research, extension, and education activi- ties conducted by REE. The term captures the people and organizations typically identified as the customers, clients, or constituents of agricultural research. Historically, the most visible stakeholders of agricultural research have been producers, processors, and commodity groups. However, the new vision set forth in this report requires a new definition of the stakeholders of agricultural research to reflect the broadening role of agriculture in public health and nutrition, envi- ronmental stewardship, and the social and economic well-being of rural commu- nities. Examples of the new stakeholders are producers of pharmaceutical products; sustainable-, alternative-, and organic-farming interests; a broad array of public and private natural-resource and land managers; conservationists; and rural communities and government agencies. The increased breadth is bringing new ideas and insights into the REE research endeavor. It also poses the challenge

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86 FRONTIERS IN AGRICULTURAL RESEARCH of combining diverse Stakeholder concerns to help shape a cohesive and feasible research program. Mechanisms of Stakeholder Input Mechanisms for integrating Stakeholder input into the research process range from formal, national, advisory boards to cooperative extension county-level meetings and informal working relationships between scientists and users of research findings (summarized in Table 4-1~. Although the REE agencies have developed a wealth of information through various forms of Stakeholder input over the last several years, the overall experience has been mixed. Important issues have arisen about how to ensure balanced input and how to translate the TABLE 4-1 REE Mechanisms for Ensuring Stakeholdera Input Mechanisms Agency Using Mechanisms National Agricultural Research, Extension, Education, and Economics Advisory Board Agency-specific advisory boards Public workshops and listening sessions Stakeholder input at the state level (through field offices and universities) Stakeholder input in competitive-grant RFPs Stakeholder participation in research and extension projects Informal or ad hoc communication of priorities between REE agencies and USDA regulatory and action agencies Formal partnership agreements between REE agencies and USDA regulatory and action agencies Formal annual meetings between KEE agencies and USDA regulatory and action agencies Colocation of action agency staff on REE facilities; involvement of action-agency staff in research Action-agency staff full-time liaisons at REE agencies Communication of priorities through state departments of agriculture and commodity groups input through respondent interviewers ARS, CSREES, ERS, NASS NASS, ERS CSREES, ARS NASS, CSREES CSREES CSREES ARS, CSREES, ERS, NASS ARS, CSREES ARS ARS, CSREES ARS CSREES, ARS NASS aIncludes action-agency or regulatory-agency input. Source: Data provided to the committee by REE and action agencies in 2001 and 2002.

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SETTING THE RESEARCH STRATEGY 87 frequently overwhelming amounts of information and diverse perspectives into focused research priorities. The most important advisory board for the REE agencies is the National Agricultural Research, Extension, Education, and Economics (NAREEE) Advi- sory Board, which was established by the 1996 farm bill (US Congress, 1996) and draws members from 30 constituencies identified by the legislation (Table 4-2; Lechtenberg, 2001a). Its role is to provide overall guidance to the REE mission area on policies and priorities for agricultural research, extension, educa- tion, and economics. The board sponsors stakeholder listening sessions, reviews TABLE 4-2 Membership Categories, Represented in NAREEE Advisory Board Membership Categories National farm organization Farm cooperative Food-animal commodity producer Plant-commodity producer National animal-commodity organization National crop-commodity organization National aquaculture association National food-animal science society National crop, soil, agronomy, horticulture, or weed science society National food-science organization National human-health association National nutritional-science society 1862 land-grant college 1890 land-grant college 1994 institution Hispanic-serving institution American college of veterinary medicine Nonagriculture scientific community Food and agricultural products transporter, for both domestic and foreign markets Food retailing and marketing representative Food and fiber processor Rural economic development advocate National consumer interest group National forestry group National conservation or natural-resource group Private-sector international development organization USDA nonresearch agency Non-USDA federal government research agency National social-science association National agricultural research, education, and extension organization Source: Federal Agricultural Improvement and Reform Act, US Congress (1996).

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88 FRONTIERS IN AGRICULTURAL RESEARCH draft guidance for competitive-grant programs, and conducts annual reviews of the REE portfolio for relevance and adequacy of funding. In addition to this overall advisory board for the REE agencies, both NASS and ERS have specific advisory groups that address programmatic areas unique to each agency. A 25-member Advisory Committee on Agriculture Statistics advises NASS on the scope, content, and timing of the agricultural census and related surveys. ERS has convened "roundtables," which include commodity and trade association representatives, to gain feedback on commodity-related issues and other aspects of ERS's market analysis and outlook program. A group of scholars, researchers, and policy officials also reviews ERS research priorities for the Food and Nutrition Assistance Research Program and provides guidance on its scope and direction. Those boards sometimes provide valuable input to REE agencies, but ques- tions have arisen about their ability to address the breadth of the future REE research portfolio. For example, the NAREEE Advisory Board has provided recommendations to the secretary of agriculture on research to serve small farms (USDA, 2000g) but has rarely commented on environmental stewardship, despite identifying it as a high-priority item (Lechtenberg, 1998, 2001b; Lechtenberg and Dooley, 1999, 2000~. Similarly, the membership of NASS's advisory committee matches the agency's current heavy emphasis on production agriculture but does not reflect other important components of the food system, such as processing, manufacturing, distribution, retailing, consumption, waste management, natural resources, and the environment. Agency administrators reported to the committee in interviews that open workshops or listening sessions conducted by REE agencies across the country have provided an opportunity for many more stakeholders to present information and their perspectives. For example, NASS's listening sessions have taken the form of data user meetings held in cooperation with partnering agencies. A recent environmental-data users meeting held by NASS and ERS made several impor- tant recommendations such as to increase integrated pest management data collection, to collect socioeconomic data, and to survey seed use (USDA, 2000h). The committee observed that the listening-session approach used by all the agencies tends to be weighted toward stakeholders who have the time, money, or desire to participate in the meetings. Those stakeholders are often well-funded industry groups rather than less well-funded stakeholders, such as small farmers and environmental organizations. Overall, the REE agencies appear to have an inconsistent track record of effectively using information generated in public workshops. ARS, for example, has developed programs (for example, related to food safety, small farms, and organic farming) in response to stakeholder input but in the committee's analysis has not always made full use of material from its national program planning work- shop summaries (USDA, 1999b,2000b) in developing its national program action plan.

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SETTING THE RESEARCH STRATEGY 89 CSREES meets the requirements of AREERA (US Congress, 1998) in formula-funding programs by requiring state institutions to report how they gathered stakeholder input and to submit a plan of work. CSREES reported to the committee that states use various methods to gather input, such as dean's advi- sory boards, department advisory committees, agricultural councils, local exten- sion boards, and random telephone surveys of citizens (e.g., University of Florida, 1999). Stakeholders influence competitive-grants programs by providing input to RFPs and by participating in grant review and selection processes (Box 4-2~. CSREES has actively solicited stakeholder comment in the development of RFPs, for example, through Federal Register announcements and specific requests to underrepresented constituencies. Staff members from competitive-grant pro- grams obtain less-formal input through scientific and professional meetings, science forums, user workshops, and communication with other federal agencies, commodity and consumer organizations, trade organizations, peer-review panel- ists, and panel managers.

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9o FRONTIERS IN AGRICULTURAL RESEARCH Farmers, members of nonprofit organizations, and state and local agencies are sometimes directly involved in the development and implementation of REE research projects. Such involvement can range from active leadership by farmer participants to scientists' informal consultation with collaborators or farmers. Many researchers have informal networks for their own stakeholder input. De- mand for research on new topics often comes through such contacts. The Sus- tainable Agriculture Research and Education Program (SARE) constitutes a case study of stakeholders' involvement at several levels (Box 4-3~. Benefits and Costs of Stakeholder Involvement Various studies have demonstrated that stakeholder involvement can help to ensure the relevance of agricultural research, education, and development. Examples include innovative participatory research processes in which farmers collaborate with scientists and technical extension officers (Pretty, 2002; Pretty and Hine, 2001; Thrupp, 1996; Thrupp and Altieri, 2001; Uphoff, 2002; Western SARE, 2000), farmer networks and farmer-to-farmer educational methods (e.g., Flora, 2001; Pretty, 2002; Thrupp, 1996; Western SARE, 2000), and watershed man- agement programs where local land managers and community groups help plan, implement, and evaluate related research (Thompson and Guijt, l999~. Huffman and Just (1994) showed that broad external influences on scientists, including

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SETTING THE RESEARCH STRATEGY 91 those by stakeholders, increased the impact of basic research on agricultural productivity. Nevertheless, stakeholder involvement does entail transaction and opportu- nity costs resulting from the requirement of time and resources for meetings and discussions involving multiple actors in the research process and from related losses of research productivity (Uphoff, 2002~. Whether those transaction costs ever outweigh the overall benefits is unclear. Experience is showing, however, that initial transaction costs often are worthwhile (Uphoff, 2002; Western SARE, 2000), particularly in cases related to environmental and natural-resources issues or other topics involving stakeholders who are new to agricultural research. FINDING: The REE agencies have implemented numerous mechanisms to integrate stakeholder input into their priority-setting and into the research, extension, and education processes. Stakeholder input gener- ally strengthens the connection between research and its applications but has had mixed results. Not all processes have ensured balanced par- ticipation by the full array of affected stakeholders. Efforts have been largely unlinked across agencies, and this has created duplication of effort and sometimes disparate results. The current multitude of stake- holder processes taxes stakeholder time and resources and the already- stretched capacity and resources of the REE agencies. Moreover, the agencies have sometimes found it difficult to reconcile stakeholders' com- peting views and to synthesize diverse and abundant stakeholder input into a usable form. Finally, stakeholder processes are weakly linked to REE and the agencies' strategic-planning and performance-evaluation processes. RECOMMENDATION 5: To provide a forum for shared learning across agencies, REE should conduct a national summit every 2-3 years that would engage the four REE agencies and a broad representation of stakeholders at the local, national, and regional levels. The summit could assess national research needs and inform stakeholders how their input is used in agency decision-making. Such a national summit could include a preliminary series of open work- shops conducted in collaboration by all the REE agencies at local, state, and regional levels. Those meetings would utilize the national network of cooperative extension and other mechanisms at the state, local, and regional levels to develop information on research needs. It could affect research decision-making at all levels. Results from the summit could be integrated into REE's and its agencies' strategic plans, performance assessments, and decision-making. Web-based communication could also be used to solicit input from stakeholders and to dis- seminate summit results to stakeholders and to the broader research community.

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92 FRONTIERS IN AGRICULTURAL RESEARCH Confusion often exists among stakeholders regarding the mission and responsi- bilities of venous research agencies in REE. This confusion is reinforced by some of the tensions among the agencies that are not necessarily overt but exist nonetheless. The concept of a national summit will have greatest value if it is well coordinated among the agencies and not used to reinforce existing tensions. In a true visionary mode, such a summit should be used to articulate the need for coordination and collaboration among the mission areas of REE. SUMMARY This chapter has described federal resource allocation to agricultural research in the context of total federal R&D funding, in the context of state and private funding for agricultural research, and in comparison with agricultural research funding in other countnes. The proportion of federal research allocation to ear- marks, special grants, and national initiatives was presented. The committee iden- tified a need for USDA to be more strategic in the application of its limited resources. The strategic planning process in REE and the allocation of federal resources toward venous research needs based on strategic goals were analyzed, and a mis- alignment between strategic goals and resource allocation was noted. The effec- tiveness of REE agencies in serving USDA action agencies' needs was consid- ered. Advantages and disadvantages of the four funding mechanisms used by USDA formula funds, intramural funds, competitive funds, and special grants or earmarks were discussed, and recommendations to realign the research budget to achieve greater flexibility and to address new and emerging issues were offered. REE mechanisms for ensuring relevance of research to stakeholder needs were considered. Changes in the mechanisms for stakeholder input that have resulted from the 1998 AREERA were descnbed, and the effectiveness of these mechanisms was discussed. A coordinated effort to elicit stakeholder input is recommended. REFERENCES AAAS (American Association for the Advancement of Science). 2002. Historical Table 2. Total R&D by Agency, FY 1976-2003. March, 2002. Available online at http://www.aaus.org/spp/ dspp/rd/histO3p2. pdf. Alston, J.M., and P.G. Pardey. 1996. Making Science Pay: The Economics of Agricultural R&D Policy. Washington, DC: AEI Press. Chubin, D. 1994. Grants peer review in theory and practice. Evaluation Review 18:20-30. Flora, C., ed. 2001. Shifting agroecosystems and communities. Pp. 5-14 in Interactions Between Agroecosystems and Rural Communities, C. Flora, ed. Boca Raton, FL: CRC Press. Huffman, W., and R. Evenson. 1993. Science for Agriculture: A Long-Term Perspective. Ames, IA: Iowa State University Press.

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SETTING THE RESEARCH STRATEGY 93 Huffman, W.E., and R.E. Just. 1994. Funding, structure, and management of public agricultural re- search in the United States. American Journal of Agricultural Economics 76:744-759. Huffman, W.E., and R.E. Just. 1999. The organization of agricultural research in western developed countries. Agricultural Economics 21:1-18. Huffman, W.E., and R.E. Just. 2000. Setting efficient incentives for agricultural research: Lessons from principal-agent theory. American Journal of Agricultural Economics 82(November):828- 841. Klotz, C., K. Fuglie, and C. Pray. 1995. Private-Sector Agricultural Research Expenditures in the United States, 1960-92. Staff Paper No. 9525. October. Washington, DC: Economic Research Service, US Department of Agriculture. Lechtenberg, V.L. 1998. Letter to Secretary of Agriculture Dan Glickman from the National Agricul- tural Research, Extension, Education, and Economics Advisory Board, May 27. Lechtenberg, V.L. 2001a. Testimony before the Senate Committee on Agriculture, Nutrition, and Forestry on behalf of the National Agricultural Research, Extension, Education, and Economics Advisory Board, March 27. Lechtenberg, V.L. 2001b. Letter to Secretary of Agriculture Ann Veneman from the National Agri- cultural Research, Extension, Education, and Economics Advisory Board, January 25. Lechtenberg, V.L. and D.M. Dooley. 1999. Letter to Secretary of Agriculture Dan Glickman from the National Agricultural Research, Extension, Education, and Economics Advisory Board, June 4. Lechtenberg, V.L. and D.M. Dooley. 2000. Letter to Secretary of Agriculture Dan Glickman from the National Agricultural Research, Extension, Education, and Economics Advisory Board, April 14. NIH (National Institutes of Health). 2002. James A. Shannon Director's Award Program to Continue in 1996. Available online at http://www.csr.nih.gov/prnotes/june96.htm#shannon. NRC (National Research Council). 1996. Colleges of Agriculture at the Land Grant Universities: Public Service and Public Policy. Washington, DC: National Academy Press. NRC (National Research Council). 2000. National Research Initiative: A Vital Competitive Grants Program in Food, Fiber, and Natural-Resources Research. Washington, DC: National Academy Press. NSF (National Science Foundation). 2002a. Science and Engineering Indicators - 2002. Estimated federal obligations for R&D and R&D plant, by selected agency, performer, and character of work: Fiscal year 2001. Appendix Table 4-25. Available online at http://www.nsf gov/sbe/srs/ seindO2/append/c4/atO4-25. pdf. NSF (National Science Foundation). 2002b. Science and Engineering Indicators - 2002. Estimated federal obligations for research, by agency and field of science and engineering: Fiscal year 2001. Appendix Table 4-27. Available online at http://www.nsf gov/sbe/srs/seindO2/append/c4/ atO4-27.pdf. OMB (Office of Management and Budget). 2002a. Budget of the US Government, FY 2003. Analyti- cal Perspectives. Pp. 173-174. Available online at http://www.whitehouse.gov/omb/budget/ fy2003/pdf/spec.pdf. OMB (Office of Management and Budget). 2002b. OMB Circular A-11. Section 84-Character Clas- sification (Schedule C). Available online at http://www.whitehouse.gov/omb/circulars/all/2002/ part2.pdf. Pardey, P.G., J. Roseboom, and B.J. Craig. 1999. Agricultural R&D investments and impacts. Pp.31- 68 in Paying for Agricultural Productivity, J.M. Alston, P.G. Pardey, and V.H. Smith, eds. Baltimore; London: Johns Hopkins University Press. Pretty, J. 2002. Social and human capital for sustainable agriculture. In Agroecological Innovations: Increasing Food Production with Participatory Development, N. Uphoff, ed. London: Earthscan Publications. Pretty, J., and R. Hine. 2001. Reducing Food Poverty with Sustainable Agriculture: A Summary of New Evidence, Final Report for SAFE-World Research Project. Colchester, UK: University of Essex.

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94 FRONTIERS IN AGRICULTURAL RESEARCH Thompson, J., and I. Guijt. 1999. Sustainability indicators for analysing the impacts of participatory watershed management programmer. Pp. 13-26 in Fertile Ground: The Impacts of Participa- tory Watershed Management, F. Hinchcliffe, J. Thompson, J. Pretty, I. Guijt, and P. Shah, eds. London, UK: Intermediate Technology Publications. Thrupp, L.A. 1996. New Partnerships for Sustainable Agriculture. Washington, DC: World Resources Institute. Thrupp, L.A., and M. Altieri.2001. Innovative models of technology generation and transfer: Lessons learned from the south. In Knowledge Generation and Technical Change: Institution Innovation in Agriculture, S. Wolf and D. Zilberman, eds. New York: Kluwer Academic Press. University of Florida. 1999. AREERA Plan of Work. Available online at http://pdec.ifas.ufl.edu/ AREERApow.htm. Uphoff, N., ed. 2002. Agroecological Innovations: Increasing Food Production with Participatory Development. London: Earthscan Publications. US Congress. 1887. P.L. (Public Law) 84-352. Hatch Act of 1887 (amended 1955). US Congress. 1890. 7 USC. 322 et seq. 26 Stat. 417. Second Morrill Act of 1890. US Congress. 1965. P.L. (Public Law) 89-106. Section (2), as amended (7 USC. 450i). US Congress. 1993. P.L. (Public Law) 103-62. Government Performance Review Act. US Congress. 1996. P.L. (Public Law) 104-127. Federal Agriculture Improvement and Reform Act (FAIR) of 1996. US Congress. 1998. P.L. (Public Law) 105-185. Agricultural Research, Extension, and Education Reform Act (AREERA) of 1998. US Congress. 2001a. Committee Report - House Rpt. 107-116 - Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, 2002. Available online at http://Thomas.Loc.Gov/Cgi-Bin/Cpquery/R?Cpl O7:FldO10: @1(Hrl 16). US Congress. 2001b. H.R. 107-275. Committee Report House Rpt. 107-275 Making Appropria- tions for Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Programs for the Fiscal Year Ending September 30, 2002, and for Other Purposes. Available online at http://Thomas.Loc. Gov/Cgi-Bin/Cpquery/R ?Cpl O7:FldO10: @ 1 (Hr2 75). US Congress. 2001c. H.R. 107-41. Committee Report Senate Rpt. 107-41 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill, 2002. Available online at http://Thomas.Loc. Gov/Cgi-Bin/Cpquery/R ?Cpl O7:FldO10: @ 1 (SrO41). US Congress. 2002a. P.L. (Public Law) 107-76. Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2002 (Enrolled as Agreed to or Passed by Both House and Senate). Available online at http://frwebgate.access.gpo.gov/cgi-bin/ getdoc. cgi ?dbname=107_cong_reports&docid =f:hr275. 107.pdf. US Congress. 2002b. P.L. (Public Law) 107-116. Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2002 (Enrolled as Agreed to or Passed by Both House and Senate). Available online at http://thomas.loc.gov/home/approp/appO2.htm. USDA (US Department of Agriculture). 1997. CSREES Draft Strategic Plan. Washington, DC: Cooperative State Research, Education, and Extension Service, US Department of Agriculture. USDA (US Department of Agriculture). 1999a. Agricultural Research Service Strategic Plan: Work- ing Document 1997-2002. Washington, DC: Agricultural Research Service, US Department of Agriculture. Available online at http://www.nps.ars.usda.gov/mgmt/stratpln/1999/ background.cim. USDA (US Department of Agriculture). l999b. Animal Production Systems and Animal Health Research Program, National Program Planning Workshop Summary. Washington, DC: Agricul- tural Research Service, US Department of Agriculture. USDA (US Department of Agriculture). 2000a. Agricultural Research Service FY 2000 and 2001 Annual Performance Plans. Washington, DC: Agricultural Research Service, US Department of Agriculture.

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