The Demand for Agricultural Research by State Governments

Public agricultural research in the United States is conducted by state agricultural experiment stations (SAES) and by the research agencies of the USDA. Both have research activities in every state. A vast amount of research and experiments has shown that the performance of plants and to a lesser extent animals, in which new technologies are frequently embodied, is altered by local geoclimatic conditions that differ within and between states. Basic research and livestock research to some extent lead to new knowledge or technologies that spill widely across state boundaries. Thus, public agricultural research produces knowledge that is both state specific and general. Disciplines Agribusiness | Agricultural and Resource Economics | Economic Theory | Environmental Studies This report is available at Iowa State University Digital Repository: http://lib.dr.iastate.edu/econ_las_staffpapers/234 THE DEMANI>FOR AGRICULTURAL RESEARCH BY STATE GOVERNMENTS Jyo.ti. Khanna, Wallace E. Huffman, and Todd Sandier* Staff Paper No. 219 Dec. 20, 1990 12/20/90 The Demand for Agricul'bural Research by S'ba'fce Govemmen'ts By jyoti Khanna, Wallace E. Huffman and Todd Sandier* Public agricultural research in 'the United States is conductedby state agricultural experiment stations (SAES) and'by the' research agencies of the USDA.. Both have research.'activities 'in ;every state." A. vast^ amount "of research and experiments has shown that the'-performance of plants and to-a lesser extent animals', ' in which! new technologies are frequently-embodied,' is altered by ,local geoclimatic conditions-that; differ within' and between states. Basic research and livestock .research"^ tosome extent lead to new knowledge or technologies that spill widely across^ state boundaries^; '-Thus, public-^ agricultural-.research produces-knowledge .that/is both^ state specific' and general. ' a > ; " i • . • .'^r State government'^decisions are criticali-in-i'the funding of SAES research .and are a major factor in funding of public agricultural-research in general. The federal,.government provides 'all of • the funding -ifor its own research-activities in the rstates.-.t <• The state, agricultural experiment'-stations', are funded-from^state government tax receiptis •and cash-transfers. Both public sector .and ^private sector transfers are ^involved. '-The portion-of federal transfers' that'are Regular Hatch Act appropriations*requires'matching dollarfor-dollar. with ^nonfederaL funds. 'In 1-984 ...these funds^accounted for only 15% of total nonfederal SAES funding. .i Thus,: the^nonfederal funds-exceeded greatly the'amount-needed to. match" Hatch funds".. >.About---77% ofthe'nonfederal funds are from state government's.'Socially efficient state government'decisions become complex, however, when interstate spillover:'effects-'are ah important . characteristic of .public-agriculturalj.research. . > Earlier, .theoretical'^and: empirical studies of-thedemand for SAES —