Data are not available to determine the percentage of agricultural research expenditures allocated to fundamental, integrative, adaptive, or disseminated research categories. The CRIS system, however, does stipulate that research investigators should report how much of each research project is basic research and how much is applied research. The data show that applied research accounts for more than one-half of the LGCA research conducted with formula funds, congressionally designated special research grants, state appropriations, and industry grants. On the other hand, LGCA research conducted with USDA-administered competitive grants and other federal agency grants is much more heavily weighted toward basic research (Ballenger and Kouadio, 1995).

Structure And Performance Of The Current Land Grant Research System

The fundamental structure for the research system based in the land grant colleges of agriculture was established in 1887 by the Hatch Act. It is stated in that act that general, federal research support would be routinely provided to state agricultural experiment stations and administered through USDA. Such is still the case, and legislated formulas established in 1955 for federal research fund allocation also remain in effect today (National Research Council, 1995a). There have been, however, significant changes: the addition of "special grants" program funds in 1965 (Public Law 89-106) and the initiation of a Competitive Research Grants program in 1977 (Title XIV of the National Agricultural Research, Extension, and Teaching Policy Act)—awards not limited to the experiment stations. The Food, Agriculture, Conservation, and Trade Act of 1990 (the 1990 farm bill) expanded the competitive grants program by creating the NRI.

What is important now is whether this long-lived structure and the institutional arrangements influencing the nature, quality, and direction of LGCA research are still adequate and appropriate. Can this structure meet the research challenges of the future, federal budget problems, and growing demands for accountability?

Federal Research Funds and Allocation Mechanisms

Federal research and development (R&D) funds totaled $69 billion in 1994. Less than $1.5 billion (approximately 2 percent of total federal R&D or $6 per person) was used for R&D conducted or administered by USDA (Table 4-1). Evidence from the economics literature of the high social rate of return flowing from investments in agricultural research, coupled with the sizeable national interest in the performance and sustainability of the U.S. food and agricultural system, suggest the nation's investment in agricultural research is indeed a modest one.

Of total USDA-administered support for agricultural research in 1994, roughly 70 percent supported intramural research and information activities of USDA agencies, 15 percent was allocated by formula to the LGCAs and their experiment stations, and less than 7 percent was awarded competitively to institutions including but not restricted to experiment stations (Table 4-1). Compared with research administered by other federal agencies, USDA-administered R&D funding is distinguished in three ways. First, it is the only federal research funding of which a portion is distributed to a fixed number of institutional recipients by a formula. Second, compared with federal support of research designated for generating knowledge in basic science, medicine, energy, and the environment, the proportion of competitively awarded agricultural funding is exceptionally small. Only the Department of Defense has a smaller proportion of "merit reviewed" and competitively awarded research funding. Finally, of the agencies shown in Table 4-1, USDA has, by far, the largest intramural proportion of federal R&D expenditures.

The fact that 15 percent of competitively awarded federal funds are allocated by formula to the experiment stations is part of the reason for the small proportion of those total funds for agricultural research. The historical and continuing rationale for formula funding is that it assures the pursuit of food and agricultural research, which often has site-specific requirements, across all states whose economies rely on agricultural production and rural vitality and contribute to the nation's food supply. The distribution of this

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