1. Gregory M. Perry Colorado State University
State Funding of Agricultural Experiment Station: Why Leadership Needs to be Engaged in Making Political Sausage
Gregory M. Perry
Colorado State University

2. Overview of Presentation
Review of funding history and sources for agricultural experiment stations
Explore the role of line item appropriations in experiment station funding
Regression analysis of state experiment station funding for
Implications for retaining and growing state budget allocations to the experiment station

3. Hatch Act of 1887
Provided federal support for agricultural experiment stations
Initiated by Congressman William Hatch (D) of Missouri
Initial allocation was $15,000 to each state
Tied to Land-Grant Universities
Experiment station idea came largely from Germany, first formulated at the state level in the mid 1800’s as Societies for the Promotion of Agriculture. Several of these were supported by state dollars. By 1887 some 18 states had already established experiment stations. State didn’t begin contributing to the experiment station until around 1905.

4. Objective of the Hatch Act
Purpose was to
“…promote the efficient production, marketing, distribution and utilization of products of the farm as essential to the health and welfare of our peoples and to promote a sound and prosperous agriculture and rural life as indispensable to the maintenance of maximum employment and national prosperty and security.”
Also to
“…conduct original and other research, investigations and experiments bearing directly on and contributing to the establishment and maintenance of a permanent and effective agricultural industry of the United States, including researches basic to the problems of agriculture in its broadest aspects, and such investigations as have for their purpose the development and improvement of the rural home and rural life and the maximum contribution by agriculture to the welfare of the consumer... "
This was revolutionary for the US govt. The fed govt to this point was small and limited to defense, post offices, running the federal judicial system, and the essential functions of Congress and the White House. It was really the fed govt first attempt to subsidize research.

5. “Each of the more successful stations based its research policy at least partially on the needs of the farm associations. State Granges and boards of agriculture, associations of dairymen and fruit growers, florists, poultry raisers, and cranberry growers – even apiarists might be the source of much needed political support.” (p. 6) “By 1900 the more successful and dexterous station directors were able to call a well-organized network of influence to the aid of favored measures in local statehouses or in Washington.” (p. 7) From The Adams Act: Politics and the Cause of Scientific Research. Charles Rosenberg. - Agricultural History, V38, No 1 (Jan 1964)
This was revolutionary for the US govt. The fed govt to this point was small and limited to defense, post offices, running the federal judicial system, and the essential functions of Congress and the White House. It was really the fed govt first attempt to subsidize research.

6. Smith-Lever Act of 1914
Provided federal support for cooperative extension service
Initiated by Hoke Smith and Ashbury Lever
Initial allocation was $10,000 to each state
Feds required a match from each state
Adopted experiment station formula in 1950’s.
Hoke Smith was a prominent senator from Georgia and Ashbury Lever was chair of the House Ag Committee.

8. 2016 Colorado Ag Experiment Station Funding
Amount (thousands)
Total
NIFA Administered
Hatch Funds
$2,132.
Multi-state Funds
$1,120.
McIntire-Stennis Funds
$414.
Grants, contracts, cooperative agreements
$7,265.
$10,931.
Other Federal Funds
USDA
$4,140
$3,767
$7,907.
Non-Federal Funds
State Appropriations
$8,350.
Commodities, industry, other
$9,250
$17,600
Total All Categories
$36,439.

9. Federal and State Formula Funds
Hatch, Smith-Lever and State Funds are Foundational
Amount guaranteed (more or less)
Can be used for faculty, staff, students, supplies, equipment, etc.
In practice most states put a high percentage into tenure-track faculty salaries
The states put these funds into faculty to provide them with stable funding and expecting that the money is used to leverage additional funds from other federal, state, local and private sources.

10. Most States Suffered a Decline in State Funding Since 2007
Change 2007 to 2016
Number of States
Loss of more than 10% 24
Loss of 0 to 10% 9
Gain of 1 to 10% 8
Gain of more than 10%
CPI increased 20% from 2007 to 2017, so only a handful of states preserved or increased experiment station funding in real terms
Source: CRIS Data Base (NIFA), FY2007 to FY 2016

11. Loss of State Funding Translates to Loss of Federal Funds
Change 2007 to 2016
Number of States
Decline in Federal Funds
Increase in Federal Funds
Loss of +10% 25 18 7
Loss of 0 to 9% 8 4
Gain of 1 to 9% 3 5
Gain of +10% 9

12. Trends for Colorado, Oregon, Utah, Nevada State Funding
$4,947,351
$7,127,397
Two things to note: (1) Colorado is much lower than Idaho and Oregon, (2) Idaho and Oregon have recovered from cuts during the great recession, Colorado has not. Why?
$7,317,559
$596,250
Source: CRIS Data Base (NIFA), FY1993 to FY 2016

13. Why Such a Discrepancy Between Colorado and These Other States?
Hypothesis 1: The other three states have line Item appropriations for experiment station and extension budgets, Colorado does not.
CO ag sector much larger than Oregon’s. Overall state budgets are about the same. Oregon is a blue state, Colorado is a purple state. OSU and CSU rank near the bottom in terms of state funding as a percentage of overall university budget. CO gave up line item appropriation in 1995.

14. Is Separate Line Item Desirable?
Benefits
Leadership motivated to directly interact with legislature about programs, incentive is to educate and listen
Helps prevent uninformed university leadership from raising havoc with experiment station budgets
Industry groups can lobby for specific funding additions without concern it will be lost in university
Drawbacks
Can remove incentive for leadership to be politically engaged
Funding for pay raises can be problematic
Jumps in other expenses have to be absorbed by station
Legislature can single out station for larger cuts

15. Round 1: estimating the value of the line-item appropriation and ag sector size on state allocation

16. Data Used in Analysis
State and Federal Funding – Reported to NIFA in CRIS system, annual summaries by state. Analysis covered years
State Budget Expenditures – Includes general funds, federal money coming into state, bond expenditures and others for
Agriculture Gross Receipts – Total by year and state –
Survey of experiment stations regarding line item appropriation (28 states have line item)

17. Initial Model
𝑆𝑡𝑎𝑡𝑒 𝐸𝑥𝑝 𝑆𝑡𝑎𝑡𝑖𝑜𝑛 𝐹𝑢𝑛𝑑𝑖𝑛𝑔 𝑇𝑜𝑡𝑎𝑙 𝑆𝑡𝑎𝑡𝑒 𝐵𝑢𝑑𝑔𝑒𝑡 = α+ β 1 ∗ 1 𝑇𝑜𝑡𝑎𝑙 𝑆𝑡𝑎𝑡𝑒 𝐵𝑢𝑑𝑔𝑒𝑡 2 + β 2 ∗
𝐿𝑖𝑛𝑒 𝐼𝑡𝑒𝑚 𝐷𝑢𝑚𝑚𝑦 +β 3 ∗ 𝐴𝑔 𝑆𝑎𝑙𝑒𝑠 𝑆𝑡𝑎𝑡𝑒 𝐺𝐷𝑃 +β 4 ∗ 𝐴𝑔 𝑆𝑎𝑙𝑒𝑠 𝑆𝑡𝑎𝑡𝑒 𝐺𝐷𝑃 ∗𝐿𝑖𝑛𝑒 𝐼𝑡𝑒𝑚 𝐷𝑢𝑚𝑚𝑦

18. Initial Results Variable Estimated Coefficient Standard Error
t-Statistic
Intercept
39445.***
15755.
1/State Budget2
***
Line Item
***
Ratio Com Receipts/GDP
***
Ratio CR/SGDP*Line Item
R2 =

19. Results Line item made significant difference in state funding
Size of ag economy also important to state funding
For Colorado
Predicted 2016 funding was $14.8 Million, it was actually $10.1.
Estimated the value of not having the line item as $9.6 Million.
For Oregon
Predicted 2016 funding was $26.9 Million, actually was $46 Million.
Estimated value of line item was $10.4 Million

20. Problems With Initial Model
Models appear to be incomplete, variables missing
Western Experiment Station Directors challenged fundamental assumption about line item
Nevada has line item but President has taken over all interactions with legislature

21. Round 2: explore the IMPORTANCE OF RELATIONSHIPS and other factors in experiment station funding

22. Follow Up Interviews
Visited with individuals from each experiment station to explore advocacy process
50 states, 50 different relationships
Two key interactions emerged
Station leadership and state legislature
Station leadership and stakeholders
Stakeholders include commodity leaders, county commissioners, producers, industry leaders

23. Three Levels of Interaction with Legislature
High Level (H)
Station operates separately from land-grant
Often employs a lobbyist (educator)
Frequent interactions with legislators
Medium Level (M)
All legislative interactions run thru president’s office
Lobbyist assigned to advocate for experiment station, coordinated messaging
Leadership sometimes asked to interact with legislature
Low Level (L)
President’s office controls messaging, discourages input from station leadership
Leadership chooses not to engage in political process

24. Three Levels of Interaction with Stakeholders
High Level (H)
Branch stations systematically identify funding priorities with stakeholders
Station leadership sets legislative agenda based on these priorities
Stakeholders work as a coalition with leadership to lobby on behalf of entire package
Medium Level (M)
Prioritization process not systematic, efforts targeted toward particular projects
Good stakeholder support for these projects, but not for entire station
Low Level (L)
President’s office exerts control over stakeholder interaction process
Station leadership makes little effort to organize stakeholders as advocates for programs
Stakeholders include commodity leaders, county commissioners, producers, industry leaders

25. Additional Hypotheses
Hypothesis 2: Higher levels of interaction between leadership and legislators result in higher funding levels
Hypothesis 3: More coordinated lobbying efforts by stakeholders result in higher funding levels
Hypothesis 4: Political leanings in a state influence the amount of state funding allocated to the experiment stations
Hypothesis 5: State funding varies based on the mix of agricultural activity in that state.

26. Additional Data Used in Analysis
Dummy variables reflecting high and medium legislative interaction
Dummy variables reflecting high and medium stakeholder activity
Cook Partisan Voting Index (CPVI) – measures how strongly a state leans toward one party or another

27. Expanded Model
𝑆𝑡𝑎𝑡𝑒 𝐸𝑥𝑝 𝑆𝑡𝑎𝑡𝑖𝑜𝑛 𝐹𝑢𝑛𝑑𝑖𝑛𝑔 𝑇𝑜𝑡𝑎𝑙 𝑆𝑡𝑎𝑡𝑒 𝐵𝑢𝑑𝑔𝑒𝑡 = α+ β 1 ∗ 1 𝑇𝑜𝑡𝑎𝑙 𝑆𝑡𝑎𝑡𝑒 𝐵𝑢𝑑𝑔𝑒𝑡 2 +
β 2 ∗𝐿𝑖𝑛𝑒 𝐼𝑡𝑒𝑚 𝐷𝑢𝑚𝑚𝑦 +β 3 ∗𝐻𝑖𝑔ℎ𝐿𝑒𝑔𝑖𝑠𝑙𝑎𝑡𝑢𝑟𝑒 +β 4 ∗𝑀𝑒𝑑𝑖𝑢𝑚𝐿𝑒𝑔𝑖𝑠𝑙𝑎𝑡𝑢𝑟𝑒 +β 5 ∗𝐻𝑖𝑔ℎ𝑆𝑡𝑎𝑘𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 +β 6 ∗𝑀𝑒𝑑𝑖𝑢𝑚𝑆𝑡𝑎𝑘𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 +β 7 ∗ 𝐴𝑔 𝑆𝑎𝑙𝑒𝑠 𝑆𝑡𝑎𝑡𝑒 𝐺𝐷𝑃 +β 8 ∗𝐶𝑃𝑉𝐼 +β 9 ∗ 𝐶𝑃𝑉𝐼 2 +β 10 ∗ 𝐴𝑔 𝑆𝑎𝑙𝑒𝑠 𝑆𝑡𝑎𝑡𝑒 𝐺𝐷𝑃 ∗CPVI + +β 11 ∗ 𝐴𝑔 𝑆𝑎𝑙𝑒𝑠 𝑆𝑡𝑎𝑡𝑒 𝐺𝐷𝑃 ∗Total State Budget
Also added additional variables to adjust for time and NIFA regions

28. Round Two Estimation Results
Variable
Estimated Coefficient
Standard Error
t-Statistic
Intercept
***
1/State Budget2
***
Line Item
High Legislature Interaction **
Med Legislature Interaction
***
High Stakeholder Interaction
***
Med Stakeholder Interaction
Ratio Commodity Rev/GDP
Ratio * State Budget
CookPVI
***
CookPVI2
***
Ratio*Cook
***
R2 =

29. Interpretation of Results (in Millions)
State
Status
2016 NIFA State Amt
Value of Line Item
Value of HL
Value of ML
Value of HS
Predicted State Funding
Colorado
NL,LL,LS
$10.124
$3,346
$6,965
$7,433
$8,155
$12,202

30. AR ID KS OK SC WY AZ FL CO WI MA OR IL CA HI VT

31. Round 3: exploring the role that different agricultural commodities have on state funding

32. Total Value of Agricultural Gross Receipts
Commodity Categories
Meat Animals
Meat Animals & Dairy
Dairy Products
Poultry & Eggs
Poultry and Other
Sheep, Aquaculture
Food Grains
Food Grains
Feed Crops
Feed & Oil Crops
Total Value of Agricultural Gross Receipts
Oil Crops
Cotton
Cotton
Tobacco
Tobacco
Vegetables & Melons
Vegetables, Fruits & Other
Fruits & Nuts
Other Crops

33. Round Three Estimation Results
Variable
Estimated Coefficient
Standard Error
t-Statistic
Intercept
***
1/State Budget2
Line Item
High Legislature Interaction
***
Med Legislature Interaction
***
High Stakeholder Interaction
Med Stakeholder Interaction
Meat + Dairy
***
Poultry + Sheep + Aquaculture + Other
Feeds + Oils
***
Food Grains
***
Vegetables, Fruits, Nuts, Other
***
Cotton
***
Tobacco
***
Year
***
Year2
***
R2 =

34. Results for Colorado Category Gross Receipts (Thousands)
Contributions to Budget (Thousands)
Base
$4,168.
Beef, Pork & Dairy
$3,921,977
-$1,234.
Other Animals
$238,015
$154.
Feeds & Oils
$938,032
$871.
Food Grains
$294,492
Fruits, Nuts, Vegetables, Other
$776,038
$3,528.
Total
$6,168,554
$8,358.

35. Estimated Impacts of Commodity ($ per Million of Commodity Sales)
Missouri
Colorado
Virginia
Beef, Pork, Dairy
$ (0.24)
$ (0.31)
$ (0.28)
Other Livestock $ $ $
Wheat, Rice*** $ $ $
Feed Grains & Oil Seeds *** $ $ $
Cotton *** $ $ $
Tobacco *** $
Fruits & Vegetables *** $ $ $

36. Relationship Implications
Stakeholder coalitions are the key
Engagement with legislature also important, whether directly or through university lobbyists
Some commodity groups more influential in the legislative process
Fruits & Vegetables, Food Grains, Cotton, Tobacco most influential, feed grains & oils to some extent
Livestock seems to have no impact
Effective communication and follow through essential to build trust with stakeholders

37. Political Implications
Large scale agriculture leans Republican, experiment station seems associated with large scale agriculture
Experiment Station needs to be more visible with research that impacts urban-leaning interests
Local, organic
Food safety and nutrition
Food startups and innovation
Resource conservation and protection

38. Next Steps for Research
Reconcile published data with information sent in
Examine the role of state funding on federal funding received
Understand the interplay between federal, state and industry funding
Explore extension funding models