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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
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.
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,
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
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
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.
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)
. 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 .
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,
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
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.
62 AGRICULTURAL BIOTECHNOLOGY Forest Service. The Forest Service is mandated to be a multi- ple-use agency responsible for managing national forest lands (FY86 total appropriation: $2.5 billion; $120.1 million of this went to research, of which $6.5 million was administered through the CSRS Competitive Research Grants Program). Timber, graz- ing, recreation, energy development, wildlife conservation, mining, and fire and atmospheric research are all within the agency's re- search responsibilities. The agency also conducts some research involving biotechnologies, most of which is funded through the competitive grants program. Areas being investigated include re- search to use biotechnologies to advance genetics in forestry, such as gene identification and transfer to improve species; research to develop products by genetic engineering, in particular, to develop a microbe to create ligninase, an enzyme that helps digest wood waste; research to speed up screening for resistance to environmen- tal stresses and diseases using somaclonal techniques and efforts to transfer genes to convey resistance to selected herbicides; and research on methods to enhance biological control agents that are essential to integrated pest management strategies. Economic Research Service. The ERS is an economic analysis unit within USDA (FY86 appropriations: $46.1 million). ERS conducts economic forecasting, policy analysis, and other social science research, often in conjunction with the CSRS and the SAESs. ERS does not have a division devoted specifically to technical analyses, so it is not possible to calculate how much of its budget is allocated to biotechnology-related research. ERS is following biotechnology developments, however. In particular, it is studying biotechnology innovations and conducting in-depth economic and policy analyses of some of these. ERS plans to do studies that focus on the impacts of biotechnology on agricultural competitiveness, structure, and policy as well as the legal and policy aspects of biotechnology itself. Cooperative Extension Service. The CES is a nationwide sys- tem of federal, state, and local experts that is the primary mech- anism for the delivery of research from the land-grant universities to farmers, ranchers, and others. It can also serve as a feedback mechanism to bring problems occurring at the farm and com- munity level to the attention of university researchers. Major
FUNDING AND INSTITUTIONS 63 program areas in the CES include agriculture, home economics, community development, and 4-H youth programs. State and local funding to CES (FY86 appropriation: $711 million) is more than double the federal contribution (FY86 appropriation: $342.7 mil- lion). States contribute funds through the land-grant universities (FY86 appropriation: $486 million), counties contribute locally or to a land-grant university (FY86 appropriation: $193 million), and additional money comes from private funding to land-grant universities and local user fees (FY86 appropriation: $33 million). The large-scale use of the products of biotechnology in agri- culture is still in the future, and thus far CES has not had to focus efforts on providing information and extension services for biotechnology applications. However, as biotechnology products come to market over the next few years, CES will need to hire and train extension agents able to handle this technology. The role of CES in technology transfer for biotechnology is covered in Chapter 5. Animal and Plant Health Inspection Service. APHIS is man- dated to protect U.S. animal ant] plant resources from diseases and pests using survey, diagnostic, control, and eradication programs and other regulatory activities (FY86 appropriation: $314.4 mil- lion). APHIS's major role is that of a regulatory agency, and as such it will play an important part in the regulation of biotechnol- ogy in the areas of animal viruses, veterinary services, and plant pathology. Although APHIS does carry out some applied research (FY86 appropriation: $8.2 million) related to its mandate, it is not a research agency. The Veterinary Services division does some developmental work in projects dealing with diagnostic tests for animal diseases and testing of vaccines for efficacy, although most of its laborato- ries do actual testing, not research; these projects are beginning to use the tools of biotechnology. The Plant Protection and Quaran- tine division does developmental work on detection and control of pest insects and weeds, and it is also implementing biotechnology approaches. The Animal Damage Control division does develop- mental work on behavioral and chemical methods of dealing with animal damage problems, but thus far it has not made use of biotechnology.
64 AGRICULTURAL BIOTECHNOLOGY ENVIRONMENTAL PROTECTION AGENCY The EPA will regulate the products of agricultural biotech- nology under two acts: pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act and nonpesticidal microorgan- isms under the Toxic Substances Control Act. Part of the EPA's mission is also to fund actual research on risk assessment. Approx- imately one-fourth of the agency's operating budget is devoted to R&D (FY86 R&D appropriation: $324.6 million). Some of this research is relevant to agriculture: EPA allocated $11.8 million in FY86 toward research on the impact of chemical and biological pesticides. NATIONAL SCIENCE FOUNDATION The NSF has the primary responsibility in the federal gov- ernment for fostering a strong national ability to conduct basic research (FY86 appropriation: $1.5 billions. The research it sup- ports is usually performed at colleges and universities and other nonprofit research institutions. Proposals for funding are peer- reviewed by panels of scientists; awards are made on the basis of scientific merit and competitiveness. Funding for research re- latecI to agriculture occurs primarily through NSF's Directorate for Biological, Behavioral, and Social Sciences (FY86 appropria- tion: $248.9 million). Much of the biological research funded by the directorate contributes to the knowledge base required to solve practical problems in the areas of health, energy, the environment, and agriculture. However, the NSF contributes only 15 percent of the total federal support in the biological sciences, whereas NIH provides 75 percent (Intersociety Working Group, 1986~. On the other hand, within its 15 percent share of federal support, NSF funds over 50 percent of the total federal research effort in plant biology that is supported by competitive grants. Since its inception in 1952, NSF has played an important role in funding leading-edge basic research in plant biology. This support is significant for agriculture because fundamental research on plants, unlike similar research on animal systems that can be related to human health and thus funded under the huge NIH umbrella, is largely excluded from NIH funding, and basic plant research has not received appropriate attention from USDA. To illustrate, total federal support in 1985 for research on plants
FUNDING AND INSTITUTIONS 65 awarded through competitive grants was about $110 million, $55 million of which came from the NSF. However, this total was only 5 percent of the $2.2 billion awarded for all federal competitive grants for basic research in biology and biomedicine (NSF, 1986~. USDA should logically support research on plants because this will ultimately benefit agriculture. USDA should also, of course, support fundamental research on animals; however, at present a big "push" is required on plants because basic knowledge needed for applications is sorely lacking. NSF's plant biology and biotechnology-related grants cur- rently average about $70,000 a year for a 2- to 3-year period, a higher level of research support than the average $46,200 a year of USDA's Competitive Grants (see Table 3-2~. In addition, NSF supports research on plant biology and biotechnology through several special programs. These programs include postdoctoral fellowships in plant biology, a summer course in plant molecular biology, and the Presidential Young Investigator Awards support- ing outstanding young faculty scientists, several of whom are in plant biology. Initiatives in biotechnology include individual inves- tigator awards, cross-disciplinary research and training programs, and proposals for several multidisciplinary biotechnology research centers. NSF's total FY86 appropriation over all its directorates for biotechnology was $86.5 million (Intersociety Working Group, 1986~. Within the Directorate for Biological, Behavioral, and So- cial Sciences alone, grants for biotechnology-related research in 1985 amounted to about $72 million, or 29 percent of the direc- torate's total research funding. DEPARTMENT OF HEALTH AND HUMAN SERVICES National Institutes of Health. NTH sponsors basic and clin- ical biomedical and behavioral research to improve the health of Americans (FY86 appropriation: $4.9 billion). Much of this re- search (38 percent) is either directly related to biotechnology or contributes to its broad science base. Several of the institutes sup- port fundamental research on animals, plants, insects, microbes, and diseases that have relevance to agriculture. However, these expenditures represent less than 1 percent of NTH's total budget. Most of this agriculturally relevant research is supported by the National Institute of General Medical Sciences (NIGMS; FY86
66 AGRICULTURAL BIOTECHNOLOGY appropriation: $428.6 million). NIGMS's mandate covers biomed- ical research and research training in the cellular and molecu- lar bases of disease, genetics, pharmacological sciences, physiol- ogy, biophysics, and physiological sciences. These studies have spillover eRects on animal science that also contribute to agri- cultural biotechnology. NIGMS funds some research on plant sys- tems that contributes important general information about life processes, such as energy production through photosynthesis and nitrogen fixation. In addition, NIGMS funds research on insects that adds to the general understanding of neurophysiology and development. Thus, NIGMS contributes some support to studies of both plants and insects with spillover benefits for agriculture, but these research areas constitute less than 10 percent and 1 percent, respectively, of its budget. Of the federal agencies that administer peer-reviewed, compet- itive grants, NTH funds by far the largest number, and in addition, funds them at a significantly higher level of support. In 1986, some 18,786 new, continuing, and renewed grants were being funded by NTH. The typical NTH grant to an individual university scientist in 1986 amounted to about $164,000 per year for combined direct and indirect costs and was funded for 3-3 1/2 years. This level of funding is adequate to maintain a research program focused on biotechnology or related areas. In contrast, a competitive grant from USDA or NSF is considerably lower and rarely enough to be an investigator's sole source of support for research in these areas (see Table 3-2~. Food and Drug Administration. The FDA is responsible for the regulation of food, drugs, cosmetics, medical devices, and biologics regardless of how the products are made. FDA regu- lates biotechnology products under the same rules and procedures used for other products, although they may be subject to dif- ferent testing requirements. The agency conducts some research, but only to support its regulatory mission. Biotechnologies may be used in such efforts. The Center for Foods (FY86 appropria- tion: $82.0 million) and the Center for Veterinary Medicine (FY86 appropriation: $23.8 million) occasionally support research that could be applicable to agriculture and biotechnologies.
FUNDING AND INSTITUTIONS 67 DEPARTMENT OF ENERGY Within DOE, the Biological Energy Research Division spon- sors research to discover and describe biological mechanisms that could be used as the basis of future energy-related biotechnologies. This research relates explicitly to biotechnology for agriculture across the range of studies on plants and microorganisms that the division funds (FY86 appropriation: $11.8 million). Exam- ples of relevant areas funded include photosynthesis, control of plant growth and development, plant stress physiology, plant cell- wall structure and function, plant-microbe interactions, aspects of microorganisms related to bioprocessing and fermentation, and microbial ecology. In FY86, grants made to individual researchers at universities averaged $72,000 per year. DEPARTMENT OF DEFENSE The U.S. Army allocated about $50 million in FY86 to R&D involving biotechnology, encompassing mainly vaccine develop- ment and disease diagnosis and treatment. This research has wide application to animal health programs. Moreover, some Army researchers and public and private laboratories receiving Army contracts are working directly on important diseases of livestock. Within DOD, the Office of Naval Research obtains or develops worldwide scientific information and necessary services for con- ducting specialized and imaginative naval research (FY86 appro- priation: $340 million). Of this total, $210 million is distributed through peer-reviewed, competitive contracts. In this context, the Office of Naval Research funds basic research on animals, plants, and bacteria through competitive grants in its biology program (FY86 appropriation: $30 million). Basic research in biotechnol- ogy is emphasized in this program, making up about $6 million of the funds awarded. Important research areas include biomolecu- lar engineering, biofouling and biocorrosion, degradation of toxic substances, and synthetic rubbers and fibers. NATIONAL AERONAUTICS AND SPACE ADMINISTRATION NASA's mandate is essentially unrelated to agriculture or biotechnologies; however, the agency does support two small pro- grams that indirectly give some support to research on plants and
68 AGRICULTURAL BIOTECHNOLOGY animals. The Space Biology Program (FY86 appropriation: $2.5 million) conducts research to identify and describe biological sys- tems that are affected by the gravity-free environment of space as well as research to use space as a too! to probe biological questions that cannot be answered on earth. Basic research funded by this program is about evenly divided between plant and animal sys- tems, with an emphasis on the biological effects of m~crogravity and the interrelationships among plant growth, light, and other environmental stimuli. The Controlled Ecological Life-Support System Program (FY86 appropriation: $0.8 million) is a small basic research pro- gram that focuses on space containment research, including topics from waste management to food production. The program empha- sizes using plants as components of life-support systems in space. Biotechnologies may be used to conduct research, but they do not receive special attention. AGENCY FOR INTERNATIONAL DEVELOPMENT The total FY86 appropriation for agricultural research within AID was $30 million. Biotechnology research abroad funded! by this program fell into three areas: biological nitrogen fixation ($0.2 million), animal vaccines ($0.87 million), and tissue culture ($0.5 million). Thus, 5 percent of AID's agricultural research budget is now devoted to biotechnology. These data are presented for comparison with other agencies listed previously, which support agricultural biotechnology research within the United States. State Support of Agricultural Research State governments contribute significant support to agricul- tural research. States match, and in recent years have consis- tently exceeded, the contribution supplied by federal formula funds through CSRS (ESCOP, 1984~. Table ~6, Line 1 documents that this situation is continuing: In 1985, the ratio of state appropri- ations to CSRS formula funds in SAESs was 3.5:1. In addition, states support land-grant universities and their research facilities, many of which also receive competitive grants from USDA, NSF, and NIH for research related to agriculture. CSRS is USDA's administrative mechanism to funnel finan- cial support to the SAESs, cooperating forestry schools, land-grant
FUNDING AND INSTITUTIONS 69 colleges of 1890, and the Tuskegee Institute. There are SAESs in every state, usually associated with a university. They bear the cost of sustaining their own scientific expertise, support personnel, and research facilities and equipment within the academic depart- ments of their universities. In a typical college of agriculture, SAKS funding accounts for 60 percent or more of total research and academic faculty salaries and 80 percent or more of the total costs of research and academic activities of the faculty. Universities operate the backbone of the nation's research programs, and states have traditionally been major supporters of universities. The recent report of the White House Science Council Panel on the Health of U.S. Colleges and Universities (1986) states Since most basic research can rarely be perceived in terms of specific products and services, and given the long-range nature of such research, private industry does not often support a high level of basic research. If one thing has become clear in recent decades, it is that the fruits of basic research provide benefits for all society, frequently in ways not visible initially to any of the participants. It is for these reasons that the federal government has become, and remains, the primary supporter of basic research in this country. The important point here is that a strong federal support program is the necessary incentive for research that carries large spillover benefits. For example, the benefits of agricultural re- search carried on in one state often accrue to the farmers and consumers in other states. Much agricultural research is carried out in the state university system. Without compensating federal funding, states cannot be expected to support lines of basic re- search whose benefits are more national in scope. Thus, for an optimal national investment in agricultural research, there must be a strong federal commitment to match that of the states. This committee believes that states should strengthen their already significant role in agricultural research and training. State support for programs in agricultural biotechnology at universities and research stations is important because of the benefits biotech- nology can bring to both the state and national economies.
70 Major Areas of Research Biotechnology Human food Plant breeding Pesticides Others Total AGRICULTURAL BIOTECHNOLOGY TABLE 3-3 Percentage Expenditure per Area of Agricultural Research by Private IndustIy Percentage of Total Expenditures 7.2 14.5 18.1 33.1 27.1 100.0 aIncludes farm machinery and equipment, biologics, animal nutrition and feeds, plant nutrients, packaging materials, energy research, agricultural economics, natural fiber processing? and tobacco products and processing. SOURCE: Adapted from the Agricultural Research Institute July 1985. A Survey of U.S. Agricultural Research by Private Industry, III. Bethesda, Md. Table IV. Private Sector Private industry invests approximately $2.1 billion annually in agricultural research. Of this amount, 95 percent is spent on in- house research. Only 5 percent is spent in support of research con- ducted outside of industry, sponsored through companies' grants or contracts to universities, foundations, or other public or private organizations (ART, 1985~. The major areas of agricultural research pursued by private industry, ranked by expenditure from highest to lowest, are pesti- cides, plant breeding, human food, biotechnology, farm machinery and equipment, biologics, animal nutrition and feeds, plant nutri- ents, packaging materials, energy research, agricultural economics, natural fiber processing, and tobacco products and processing (Ta- ble 3-3~. However, in the ARI's survey, a high percentage of com- panies reported doing either no basic research or no research at all. Thus, much of industry depends on the public sector for necessary developments in basic and applied agricultural research. Private sector institutions conducting biotechnology research themselves fall into several general categories. There are new entrepreneurial biotechnology companies, generally small and fo- cused on only one or just a few research projects in a narrowly de- fined area. These are often founded by academic scientists funded
FUNDING AND INSTITUTIONS 71 by venture capital, R&D limited partnerships, and a sale of equity. Some of these companies survive and grow into more established companies, expanding their R&D efforts as their finances and staff increase. On the other hand, many well-established chemical and drug houses have created their own R&D departments focused on biotechnology projects of interest to them. These efforts range from very directed research to fundamental studies in areas im- portant to future biotechnology applications. Not-for-profit private sector research institutes also exist. Some of these have been extremely effective in fostering high- quality basic research, which supports progress in biotechnology. Noteworthy examples include Cold Spring Laboratory and the Boyce Thompson Institute in New York, and the Carnegie Insti- tution of Washington, with laboratories located in California and Maryland. Private sector contributions to biotechnology R&D also occur through the multitudinous links that have grown up around col- laborative funding, research, development, and marketing arrange- ments established among different companies and among compa- nies and other private and public institutions. These contributions are discussed further in Chapter 5. A Summary of Agricultural Research Funding It is clear that a variety of federal, state, and private insti- tutions support agriculturally relevant research. Combined, they spend slightly more than $4 billion annually for agricultural re- search in the United States. Private industry's expenditures rep- resent about half this amount ($2.1 billion; ART, 1985), combined federal and state support of the traditional agricultural research system accounts for $1.9 billion (USDA, 1986), and the balance of about $100 million represents grants from federal agencies such as NSF, NIH, and DOE for agriculturally related research to univer- sities outside the land-grant system. It must be recognized that such an estimate is conditioned by the difficulty of distinguishing expenditures for agriculturally relevant research from other types of research. Further, there is always the possibility of funds be- ing transferred among public and private institutions and then reported by both. However, we feel that such errors are negligible, and a reasonable estimate of the tote] public investment both
72 A GRICULTURAL BIO TECHNOLOGY TABLE 3-4 Total Government Expenditures for Agncultural Research Reported by the Current Research Information Systema Amount (thousands Sponsorof dollars) Percent USDA, in-house642?248 33.3 State Agricultural Experiment Stations1,145,957 59.4 Forests schools28,534 1 .5 Colleges of 1890/Tuskegee Institute23,019 1.2 Schools of veterinary medicine56,410 2.9 Other cooperating institutions29,722 1.5 Small Business Innovation Research Grants2,101 0.1 Total1,927,991 100.0 a FY85. Columns may not add due to rounding. See Tables 3-5 and 3-6 for breakdowns of federal and state contributions. SOURCE: U.S. Department of Agriculture, 1986. Inventory of Agricultural Research Fiscal Year 1985. Washington, D.C. federal and state for agricultural research in the United States is about $2 billion annually. Detailed information on how the traditional agricultural re- search system's $1.9 billion was spent in FY85 is given in Tables 3-4, 3-5, and 3-6. These tables show breakdowns for state and federal expenditures reported through the Current Research In- formation System (CRIS) on research conducted by the USDA, SAESs, forestry schools, schools of veterinary medicine, and other agriculturally related institutions. Table 3-5 shows expenditures within USDA-operated research groups. Table 3-6 shows expendi- tures outside federally operated laboratories en cl details the fed- eral, state, and private contributions for each group. It should be noted that the values are gross figures representing total expendi- tures, which include costs for administration, rent, and operation of research farms as well as personnel, materials, and other costs related to research. Of the total $1.9 billion government expenditure reported by CRIS, about one-third is spent on research within the USDA, pri- mariTy by the ARS, the Forest Service, and the ERS (Tables 3-4 and 3-5~. The SAESs account for about 60 percent of the total expenditures, with state appropriations accounting for more than half of that research support. Federal formula funding through the Hatch Act and other special funding through the CSRS is only
FUNDING AND INSTITUTIONS 73 about 16 percent of the total research expenditures at SAESs (Ta- ble 3-6~. Funds from USDA and other federal agencies provided through grants, contracts, and cooperative agreements account for just over lo percent of the support to SAESs, and approximately equal funding is provided to SAESs by industry and other private sources. It is interesting to note that income from the sale of agri- cultural products, such as dairy products and meat, is reinvested to support research. The CRIS inventory also lists scientist-years, a measure of the time scientists devoted to this research. Work by laboratory technicians and graduate assistants and time spent in research administration are not included in tabulating scientist-years. In 1985, the $1.9 billion of state and federal expenditures represented the work of 11,133 scientists, or an average cost of $173,000 per year to support a research scientist. However, this figure is just an average. Some areas of research require less support for equip- ment, facilities, chemicals, and other expenditures, whereas other areas require much more. Equipment and materials to carry on re- search in biotechnology are generally more expensive than those for other areas of agricultural research. Hence, biotechnology research probably requires more than the average $173,000 per scientist per year. In private industry the calculation of the per-scientist cost for agricultural research is $159,756 (ARI, 19853. However, this average includes all scientists, whether they hold a B.S., M.S., or Ph.D., in contrast to the CRIS definition of a scientist, which TABLE 3-5 USDA In-House Expenditures for Agricultural Research Reported by the Current Research Information Systems Amount Sponsor (thousands of dollars) Agricultural Cooperative Service Agricultural Research Service Economic Research Service Forest Service Human Nutrition Information Service Total 2,071 470,442 46,405 1 1 8,240 5,090 642,248 u FY85. Columns may not add due to rounding. SOURCE: U.S. Department of Agriculture, 1986. Inventory of Agricultural Research Fiscal Year 1985. Washington, D.C.
74 Cal - Ct 3 - ._ so ~0 V) .= Cal o so Cal - o - O a., Cal ~ Cal U: ~ ~ O o . _ _' ~ Cal so ~0 ~ C) Hi So a' ~ > ~ ;^ O - 5~ ~ O =0 C O _ Cal = Q so :t A V) . C) ~ O ~ ~ Cal O ~ - ._ ~ U:) V C: - C~ V O V, O C~ ~ ~ _ 0N ~ O U~ oo _ _^ O C~ - -) _ ~ O - V~ - _ ~ C~ V)' ~ <( _ ~ - O O~ _ ~ ~ ~ Z '- OO ~1 - __ ~1 - ~D ~tr - Z Z ~ ~ ~O - ~N ~ ~ ~ ~ r~ _~ a~ ~ U~ Z ~ -~. ~_ X ~ _, ~ r~ W oo _ ~ ~ - , _ O ~ ~ Cr~ <~ O Ir) Z - 00 C~ O If) ~ r~ O ~ ~ ~ ~ Z _ -, ~_ 0~ ~ O ~ oo - C<) C-] _ ~ O ~ t_ _ _ _ _ oo - ~ oo _ ~ oo - U: O C: ._ ~ _ ._ C) (,) ~C) ~ s ~ C.) X ~q ~ _ o C =_C_ Ct - of)_ s~ - ~ ~ o O ~ v: L~ ~ v: C~ V: C) o ~5 ;~ - ._ C~ CQ _~ C~O :r~ _. _ C~ C~ ._ ~. ~X C) = <, ~C) C~ O ~t _ ~ ~t _ Z U~ ~q ~C~ C ~O C~ C~ C: ~5 C) V: C~ .0 ~; O . _ ~Ct C~ ;> ._ O ·- U: C:: C~ C,) =. - g 3 ~ m- _ Ct C) (t ~o _ ~ O ~ Ct C> - C~ -o 11 e~ C~ . _ Ct C) C~ C) - - 3 .1 ~4 ~: o o - C) - ~D 00 - C~ . _ C~ - - C~ C5 ~r ~ - Z. ~ ~C) ._~ ~C) 3 o,_ _ 0C.) ·~ C)._ C.) ~ U) 0 c: - C~ 0 ~-- ~Ct e5 ~C 5 ~ _U) C~ ~C) ~ 0·> . . ~ ~ OC' p: O ~ ~ ~ O Z~ ~0 ~
FUNDING AND INSTITUTIONS 75 includes only the Ph.D. or equivalent level. Another survey of pri- vate industry by the Committee on Biotechnology of the Division of Agriculture of the National Association of State Universities and Land-Grant Colleges found a range of from $80,000 to $500,000 per principal (Ph.D.) scientist in agricultural biotechnology R&D, with an overall average of $160,967 (NASULGC, 1985~. PEER REVIEW Throughout this report, we stress the importance of a peer- reviewed, competitive process for allocating most research funds. Peer review is one of the most effective mechanisms available to ensure that public dollars are invested in relevant, high-quality research and that judgments made in allocating funds are equitable and discerning (Cole et al., 1978~. Peer review, which in its broadest form is also called merit review, can take a variety of forms and serve a variety of purposes. Review by experts is critical to evaluative decisions such as judging the relevance and quality of proposed research, judging the merit of papers to be published, measuring the quality of people for decisions on promotion within universities and research facilities, and setting the direction and priority of research. Review involv- ing other qualified researchers also provides a forum for scientific communication and advice. All research activities should undergo peer and merit appraisal of their scientific worth. In addition, whenever open competition is appropriate to meet the objectives of a program, this evaluative process should be used to distinguish among competitors. Participants and procedures in the review process should be organized to match the nature of the tasks. A system of review and awards should work to ensure equal opportunity among inves- tigators, a minimum of errors, fairness, and that the best research is selected that can at the same time be managed with reasonable costs in time and money. No system of review can be totally free of error, differences of judgment, or personal preferences (Cole et al., 1978~. However, careful attention to the quality and breadth of expertise represented on review panels is the best way to en- sure the soundness of their recommendations. Panels should not be composed entirely of people who have a substantial interest
76 A GRI CUL TURAL BIO TECHNOL O G Y in the outcome of the research. These panels should include ex- perts from outside the specific discipline as well as people from another level of the research process, in order to evaluate both the merit and scientific quality of proposed programs. For exam- ple, reviewers of a proposed basic research study should include representatives of applied research, and similarly, applied research proposals should be reviewed by some individuals with strong ba- sic research backgrounds. Efforts must be made to broaden the expertise represented on review panels, so the pane! can fully eval- uate the quality and relevance of proposed research and minimize bias. In addition, objective selection and frequent rotation of re- viewers is desirable, to avoid creating an "oIcI boy" network and to bring fresh insights to review panels. Recent budget constraints are not a short-term phenomenon; the scientific community must operate on the assumption that there will be no real growth in basic research budgets until per- haps the end of the century (Press, 1986~. Thus, science has an increasingly important obligation to ensure the optimal use of limited funds. Evaluation and competition through peer and merit review is the most appropriate mechanism to accomplish this goal effectively and fairly. This form of quality control has proven itself through many years of service in the biomedical and basic science research communities, as evidenced by the success of NIH- and NSF-supported research programs. A peer and merit review process must be used to assess and guide the development of the agricultural biotechnology research system. Implementation of these review processes will vary depending on the activity un- der review, for exa~nple, competitive research grants, appropriated formula funds, or agricultural extension. In all cases, the benefits of peer and merit review properly done and heeded are contin- uous monitoring of research advances, more efficient, relevant, and higher quality research, and increased communication and respect among scientists. REALIGNING THE SYSTEM FOR BIOTECHNOLO GY Biotechnology requires a large initial investment in what is traditionally referred to as basic research. An understanding of the physiology, biochemistry, and genetics of a biological process
FUNDING AND INSTITUTIONS 77 is needed before one can use the tools of biotechnology to con- troT that process. Basic research questions are often a necessary component of resolving agricultural problems using biotechnol- ogy. Thus, as in many other areas of science, there is substantial overlap between basic and applied research. Despite past insti- tutional arrangements and funding patterns that emphasized the separation of basic and applied research, biotechnology is bringing agricultural research closer to Pasteur's dictum: "There is no pure science and applied science, only science and its applications." The agricultural research system in the United States must better integrate basic and applied research as it moves to facilitate the advances biotechnology can make for agriculture. Funding for Agricultural Biotechnology Current expenditures for biotechnology research in the agri- cultural research system cannot be documented or compared with any precision, because few analyses of biotechnology research sup- port were done until very recently. In addition, there is no widely accepted definition of biotechnology, which makes it Biscuit to establish clear-cut criteria for classifying such research. However, some general estimates are available from both the U.S. Gen- eral Accounting Office (GAO, 1985) and the National Association of State Universities and Land-Grant Colleges (NASULGC, 1983). Both of these reports show that biotechnology research represents only a small part of agricultural research funded through USDA. The NASULGC study reported data collected through a ques- tionnaire mailed to SAESs in 1982. Total support for biotechnol- ogy research at SAESs was $41.5 million, and the survey reported that this funding came from state ($16.2 million), federal ($19.8 million), and private ($5.5 million) sources. The GAO study listed data collected for FY84, from another survey of SAESs and Col- leges of Veterinary Medicine, which put total support for biotech- nology research at $47.2 million (see Table ~7 for a breakdown on sources of funding). In addition, the GAO (1986) reported that support for biotechnology research within ARS in FY85 was $24.5 million, or 5.2 percent of its total research budget.
78 A GRICULTURAL BIO TECHNOLOG Y TABLE 3-7 State Agricultural Experiment Station and Veterinary College-Sponsored Biotechnology Research (millions of dollars) for FY84U Source of Funding Competitive Research Grants Office All other USDA funds Other federal agencies State agencies Industry Total Biotechnology Total Agricultural Research Research Percentage of Total Agricultural Research that is Biotechnology Research 2.8 7.9 13.6 17.3 5.6 47 2h 11.6 173.6 109.1 55 1.2 86.3 931.8 23.9 4.6 12.5 3.1 6.5 5.1 a Relates to the 495 research projects discussed in the Government Accounting Office (GAO) Report; data for FY84. b this figure does not include an estimated $500,000 reported to the GAO by the North Dakota Agricultural Experiment Station or $1,693 reported by the Ohio Experiment Station. These two stations, although providing GAO with a total figure for their biotechnology research, did not identify the specific sources of that funding and GAO, therefore, excluded the amounts from the table. SOURCE: General Accounting Office, 1985. Biotechnology: The U.S. Department of Agnculture's Biotechnology Research Efforts. Washington, D.C. (GAO/RCED-86-39-BR). These data make an interesting point: Biotechnology research at the ARS, SAESs, and veterinary colleges accounts for ap- proximately 5 percent of total research funding at these insti- tutions. However, a larger percentage of the grant support pro- vided to SAESs and veterinary colleges by the USDA competitive grants program and federal agencies other than the USDA goes for biotechnology research. In fact, 12.5 percent of support from other federal agencies and 23.9 percent of USDA competitive grant support to SAESs funded biotechnology research (Table 3-7~. As the awareness of biotechnology's role in research increases, government agencies have begun to track their expenditures in biotechnology (Table 3-8~. Categorizing what biotechnology re- search actually is can be somewhat arbitrary, because biotechnol- ogy methods are being used in almost all biological disciplines and in some areas of engineering and chemistry. In addition, federal agencies have not formally agreed upon a definition for biotech- nology; both narrow and broad criteria are used, which limits the significance of comparing levels of funding among agencies. And though direct comparison of the dollar values is not valid, funding
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.
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
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
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
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,
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
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.
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.
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
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.
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.
