1. Moderator Simon Tripp, Battelle Comments Chairman Frank Lucas, House Committee on Agriculture Presentation Deborah Cummings, Battelle Impact and Innovation: Agbioscience in the Southern United States Panel Burns Hargis, Oklahoma State University Bob Young, American Farm Bureau Federation Peter Nelson, BioDimensions, Inc. Ian Maw, Association of Public and Land-grant Universities Questions & Answers IMPACT & INNOVATION: Agbioscience in the Southern United States

2. 2 The Agbioscience Industry Is… An Innovation Engine for the United States –Driven by land grant universities that were originally formed to pursue practical advancement of agriculture, science and engineering and transfer those advancements into practical use on the farm and within industry. A Complex Value-Added Supply Chain Driving Increased Output and Productivity

3. 3 Red Biotechnology Medical Biotech Green Biotechnology Agricultural and Environmental Biotech Grey Biotechnology Industrial Biotech Blue Biotechnology Marine Biotech Biopharming Veterinary Biotech Nutraceuticals Functional Foods Biobased Chemicals Instrumentation and Devices Novel Genes and Chemical Compounds Biofuels Drugs Medical Devices Industrial Enzymes Tissue Chemicals Crop Agriculture Fibers and Materials Biomass Production Environmental Technologies Biomarkers Livestock Production Technologies Transgenic Organisms Biosecurity Agbiosciences within the 21 st Century Bioeconomy Biomass Production Residue/Waste Streams Medicinal Ingredients Aquaculture Diagnostics

4. 4 The Agbiosciences are at the Forefront of Addressing Global Grand Challenges Enhancing the sustainability, competitiveness, and profitability of U.S. food and agricultural systems Adapting to and mitigating the impacts of climate change on food, feed, fiber, and fuel systems Supporting the energy security and the development of the bioeconomy from renewable natural resources Playing a global leadership role to ensure a safe, secure, and abundant food supply for the United States and the world Improving human health, nutrition, and wellness Heightening environmental stewardship through the development of sustainable management practices Strengthening individual, family, and community development and resilience.

5. 5 U.S. Agriculture 6.1% of global land area –21.1% global oilseeds –16.6% world’s grains –12.6% cotton –21.8% poultry –21.0% beef 2.2 million farms, 917 million acres $418 billion in output and $116 billion in exports. Within global agbioscience and agriculture it is generally acknowledged that the U.S. is the worldwide leader. As the BioCentury continues to unfold, it is fair to expect that agbiosciences will represent a key national opportunity for economic expansion.

6. 6 Southern Agriculture Production 24% of U.S. land area –40% of total number of farms –81% of broilers –78% cotton –62% timber production –2.4 billion landed catch 878,100 farms, 272 million acres $28 billion in exports –89% chicken meat –80% cotton –65% rice Within the Southern Region, the role of small farms is quite important since more land is dedicated to farming across smaller farms than one would expect when compared to national statistics

7. 7 In 2011, in addition to nearly 880,000 farms in the region, the Southern Region contained more than 82,000 companies participating in the value- added chain through the provision of products and services such as: –The manufacturing and supply of agricultural, inputs such as seed, fertilizer, insecticides, farm equipment, etc. –Agriculture, aquaculture, and forestry processing services such as grain milling, oilseed crushing, and lumber milling. –The value-added manufacturing of food, nutrition and health products. –The production of industrial products from biomass including fuels, chemicals, materials, paper and textiles. Taken together, these farms and downstream, value-added industries in the Southern Region represent: –$1 trillion in economic output –4.57 million jobs –$205 billion in total labor income Southern Agbioscience Industry Analysis

8. 8 A Powerful Support System: The Southern Land Grant Extension Service and Experiment Station System

9. 9 Land Grant Universities and their Experiment Station and Extension System – An Integrated Research, Education and Extension System in Support of the Agbioscience Economic and Social Ecosystem

10. 10

11. 11 Core Categories of Functional Impact Areas

12. 12 Economic Impact of Growing Agriculture Production and Ag-Related Business Enterprises The Economic Impact of a 1 Percent Increase in the Southern Region’s Agricultural Output Using the IMPLAN input-output model developed for the Southern Region, Battelle calculated on an annual basis the impact of a 1 percent increase in agricultural production (including crops, dairy, poultry and eggs, cattle, fisheries, and forestry). A 1 percent increase in production would yield:  $2.2 billion in economic output annually across the Southern region  $513.3 million in personal income for Southern region residents  More than 18,500 jobs would be created within the Region. It also should be noted that expanding the agricultural sector could benefit every county in every state within the Region. Agriculture and associated processing industries are highly diffused across the Region; therefore, the direct and indirect effects of expansion in the sector are felt much more widely than with more narrow, geographically focused sectors. Finally, it is important to note that the Southern Land Grant Extension Services and Experiment Station System collectively received $548 million in federal funding and $1.062 billion in state funding in FY2011. At this level of funding, the System has only to positively impact agricultural output by only 0.25 percent to cover its federal appropriation and by 0.48 percent per year to cover its state appropriations. As shown in a variety of the case studies, the impact of these activities is likely many times higher than this—thereby providing the federal government and the regional state governments with a significant return on their investment.

13. 13 Direct Economic Impact of Southern Region’s Land Grant Agricultural Services Organizations The Expenditures of the Experiment Stations and Extension Services generated: –$5.4 billion in total economic impact –62,000 jobs –$2.55 billion in wages and benefits

14. 14 A System Facing Significant Global Challenges

15. 15 There’s good news and bad news… The importance of agbiosciences is expanding due to its great relevance to global needs and challenges—BUT, this is occurring at a time of budget crises within federal, state and local funding agencies and within private industry. There is a fundamental tension between meeting expanding needs and opportunities while attempting to operate within a budget crisis environment. The challenge is compounded by a general lack of understanding in public and political circles regarding the extreme importance of agbiosciences, experiment stations and extension services to future global stability, national economic development and human and environmental health.

16. 16 Challenges to Agbioscience Institutions in the Current Environment Challenges and Issues Federal  Decline of federal formula funding.  Potentially significant cuts to research and extension funding under sequestration specifically, or under general initiatives to lower federal spending.  A need to increase funding for agbioscience related R&D, via NIFA, if land- grants are to fully address the major issues and opportunities. State  Rising tide of state fiscal crises limiting support to state universities, experiment stations and extension.  Fiscal problems for U.S. counties limiting traditional local support for extension. General Public  Lack of communications regarding the growing importance of agriculture and agbioscience to global issues and development opportunities.  Need for those benefiting from programs to voice their impact and appreciation with key decision makers.  Need to communicate the “public value” of programs  Need to better connect the message of agriculture = food = nutrition = health

17. 17 Agbiosciences are critically important to tackling many of the most pressing issues facing the nation and globe—yet, as a collective suite of disciplines, agbiosciences receive the least amount of funding attention in the national R&D funding scheme.

18. 18 Conclusion The Southern Land Grant Extension Services and Experiment Station System has been, is, and will continue to be a primary engine for economic and social sustainability and growth. –Ultimately, the System is focused on improving and sustaining the Southern Region of the United States—improving its economy, preserving its environment, growing a skilled workforce, and contributing to continued social sustainability and responsibility. The impact of the System’s programs and expenditures represent a significant return on investment for federal, state, and local funding sources. –As a result, these institutions should be considered priorities for further strategic investment and development given their importance in realizing the intrinsic growth potential of agbiosciences for the U.S. and regional economies.

19. 19 Contact Simon Tripp Senior Director Battelle Technology Partnership Practice Phone: 412-523-6895 E-mail: tripps@battelle.org Deborah Cummings Senior Program Manager Battelle Technology Partnership Practice Phone: 614-424-5848 E-mail: cummingsd@battelle.org Full Report and Summary is available at: www.lsuagcenter.com/southernagbioscienceimpact