transfer. The partners have traditionally been the U.S. Department of Agriculture (USDA), at the federal level, and every state and territory, through their land grant colleges and associated state agricultural experiment stations and extension services, at the state and local levels. Cementing the partnership is a financial arrangement: each state and territory receives federal funding through USDA for its agricultural research and extension programs, contingent on each state and territory matching these federal funds.1 These institutional funds for LGCAs' research and extension programs are administered by USDA and allocated based on formulas. The major components of the formulas are the percentages of the nation's rural and farm populations located in each state and territory.
Recently, about 30 percent of all research expenditures by LGCAs' state agricultural experiment stations derived from federal funds; state appropriations and private funds accounted for 51 percent and 19 percent, respectively. Of the 30 percent of expenditures supported by federal funds, about one-third came from formula funds, 10 percent from competitive research grants administered by USDA and specifically designated for food and agricultural system research, 13 percent from congressionally designated special grants, and 44 percent from non-USDA agencies including the National Institutes of Health, the U.S. Agency for International Development, the National Science Foundation, and others.
Land grant colleges' extension services are supported by federal, state, local government and private funds. Recently, state appropriations contributed 47 percent, federal funds contributed 29 percent, and local government and private support accounted for 24 percent. The federal funds are drawn from USDA-administered formula funds (69 percent), congressionally designated funds (28 percent), and other federal sources (3 percent). Federal funding for teaching programs in food and agricultural sciences has been minimal in relation to support for research and extension (USDA-administered programs total $18 million); a formula such as those used to fund research and extension has never been adopted, nor is it proposed here.
Since the colleges' early years, the nation has experienced dramatic changes in the business of farming. First, in good part because of the colleges' contributions to agricultural knowledge and farm technology, farming is today an industry based on science and technology. The productivity of farm labor has increased almost sevenfold since 1948 as a result of the development of modern farm technology, the use of more capital relative to labor, and improvements in the quality of inputs and managerial practices.
Second, the profile of a farm has changed dramatically since the LGCA system's early years. Family farms still account for the majority of farms in the United States; however, the contemporary family farm is often a complex business entity, and family farms range in size from small-scale specialty farms to very large-scale, commercial organizations. Farming has also become a highly concentrated industry, thus a relatively small share of all farms produce a significantly larger share of all farm output. Associated with the great size disparity among U.S. farms is the fact that there are farmers of significantly different economic means, educational backgrounds, research capacities, and information needs.
Third, some segments of the U.S. food and agricultural sector are increasingly industrialized. In other words, farming, processing, and marketing are increasingly coordinated activities controlled through ownership or contractual arrangements by a single firm or "integrator." In such operations, the seed, animals, or feed used for production may be owned by the integrating firm, which has a technical and professional staff that provides context-specific information to contractors based on proprietary data and research.
As discussed in Chapters 4 and 5, state governments are not required to match federal funds designated for research and extension programs at 1890 institutions. The matching requirement for the funds to 1890s was omitted by legislators because they feared that states would not agree to provide the matching funds and, thus, federal funds to those institutions would be lost.