Tax-Exempt Ag Research Charity Organizations?


By Chris Clayton, DTN Ag Policy Editor and Jerry Hagstrom, DTN Political Correspondent

WASHINGTON (DTN) — Several senators have co-sponsored legislation they believe could boost funding for agricultural research through charitable contributions.

Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and Sen. John Thune, R-S.D., are spearheading the bill, which has at least seven other co-sponsors from both parties. The Charitable Agricultural Research Act would change the tax code to allow for new, tax-exempt organizations to be created specifically to fund agricultural research. These ag-research groups would be comparable to medical research organizations that have existed since the 1950s.

While agricultural productivity has soared, ag research funding has become stagnant and has fallen far behind other federal agencies since the 1970s, senators said. Agricultural research organizations would work with agricultural and land-grant colleges and universities to fund and conduct research.

For decades Congress has used earmarks to steer money toward specific projects or individual congressional districts, but the practice has become associated with corruption and questionable spending. This past year Congress eliminated earmarks and the money that they directed toward individual members’ districts and the institutions within them.

Stabenow lamented at a Senate Agriculture Committee hearing last month in Kansas that her committee would have problems funding agricultural research in the next farm bill because of the earmark ban. “We have got some issues to deal with because of appropriators,” Stabenow said. “We have changed the way we do ag research now, which is going to cause a problem if we don’t find another system.”

Stabenow said helping boost agricultural research through charitable groups could become a win-win situation and help further engage the private sector in such research. Thune said the bill provides a new option in a challenging budget time.

“Production agriculture’s current economic strength is a direct result of research that — among other things — has increased crop yields, made livestock healthier, and made food safer,” Thune said. “Our bill will facilitate the transfer of much-needed private funding to agricultural research, helping to prevent innovation from stalling due to funding shortfalls.”

Officials have been searching for new options to address research-funding challenges. Agriculture Undersecretary for Research, Education and Economics Catherine Woteki said in a wide-ranging interview with DTN earlier this week that USDA also may need to ask Congress for the kind of authority the National Science Foundation has to authorize new research facilities on its own.

The National Science Foundation has the statutory authority to use a competitive grants process to identify the highest priority research facilities and also to buy specific types of research equipment, Woteki said. If Congress is no longer going to use earmarks, she added, USDA officials are considering whether to seek that type of authority.

Woteki, who was undersecretary for food safety in the Clinton administration, dean of agriculture at Iowa State University and global director at Mars Inc. before assuming her current position, said her philosophy on agricultural research “starts with the premise that this is the most exciting time to be in agricultural research and the natural resources sciences” because there are so many new technologies. But Woteki also has to ask whether those technologies will enable the world to produce enough food to feed 9 billion people by 2050 in the face of variable weather conditions and whether that food supply will be safe and keep people in good health. The United States and other countries will need agricultural research budgets to answer those questions.

USDA’s agricultural research programs have already taken a 10{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} cut, which has caused “severe” difficulties with agricultural research, she said. USDA has already had to cut back on agricultural statistics gathering and stop construction on facilities such as a poultry research center in Georgia.

Woteki said USDA has a continuing need for both the “formula funds” now known as “capacity funds” that go to land-grant colleges automatically and for competitive grants that go to the land-grant schools and other institutions for various forms of basic research. Although some people have questioned having a land-grant college in every state and so many USDA research stations, Woteki said she does not believe there is much duplication in these research programs.

Much agricultural research goes unappreciated, Woteki said. While the Energy Department might seem the likely place to do research on biofuels, only USDA has the germplasm collections that are needed for research on what crops can be grown as the basic material for biofuels, she said.

“When you think about specific crops, citrus is grown predominantly in two states, many of the specialty crops are grown predominantly in just a few states in one region,” she said. “I see that there needs to be a continued infrastructure in support of those.”

Woteki added that panels appointed by the National Academy of Sciences are making recommendations for the safety of the site and that the “final step” is a requirement that a future secretary of agriculture will have to issue a permit for the research if he or she is comfortable with it.

Woteki maintains that the success of U.S. agriculture in producing safe and reasonably-priced food is the reason that it has been so hard to convince Congress to provide money for agricultural research in recent years. In contrast, she said, China has dramatically increased its research budget and is focusing on genetics, genomics, and biotechnology. Woteki said there are many cooperative projects among countries on individual crops such as wheat, but that there needs to be a forum for international discussion of the agricultural research agenda.

“I think we’re at a daunting recognition in this country of the fact that food and the related water issues are likely to be as big a national security issue in our future as our concerns over the last 50 years on nuclear proliferation and terrorism,” she concluded.


© Copyright 2011 DTN/The Progressive Farmer, A Telvent Brand. All rights reserved.

Posted with DTN Permission by Haylie Shipp


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