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Cooperative Extension System: Trends and Economic Impacts on U.S A publication of the Agricultural & Applied The magazine of food, farm, and resource issues Economics Association 1st Quarter 2014 • 29(1) Cooperative Extension System: Trends and Economic Impacts on U.S. Agriculture Sun Ling Wang JEL Classifications: H4, Q1, O3, O4 Keywords: Agricultural Productivity, Extension, U.S. Agriculture, Land Grant University, Smith-Lever Act To vitalize rural America and improve rural life, the Mor- rural economy, training tomorrow’s leaders, disseminat- rill Act of 1862 and 1890 established land-grant universi- ing knowledge, and pursuing sustainable agriculture and ties and colleges (LGU) to educate citizens in agriculture, the environment since WWII. Although the contribution home economics, and other practical professions. In 1908, of extension to the farm economy seems to be straight- President Theodore Roosevelt appointed a Commission on forward, the economic benefit of extension is not easy to Country Life to “make rural civilization as effective and quantify. In addition, there has been an ongoing tension in satisfying as other civilization” (Bailey, 1920). Based on the extension regarding its focus on agriculture versus its role Commission’s recommendation of a nationalized extension for broader rural development (Bishop, 1969). service, and built upon the pre-established LGU system, According to USDA’s agricultural productivity es- in 1914, the Smith-Lever Act created a unique U.S. ag- timates in 2011, total U.S. agricultural production was ricultural Cooperative Extension System (extension). The more than 2.5 times its 1948 level with inputs growing extension system established a partnership among a federal by a mere 4% between 1948 and 2011 (USDA Economic partner (the U.S. Department of Agriculture (USDA)), Research Service (ERS), 2013). Therefore, productiv- state partners (LGU and state governments), and local ity growth accounted for nearly all of agricultural output partners (city or county governments). Today, the USDA’s growth in the period 1948 to 2011. While research and National Institute of Food and Agriculture (NIFA), which development (R & D) investment is the major driver of was created through the Food, Conservation, and Energy productivity growth (Alston et al., 2000; Evenson, 2001; Act of 2008 to replace its predecessor—Cooperative State Huffman and Evenson, 2006; Fuglie and Heisey, 2007; Research, Education, and Extension Service (CSREES), and Wang et al., 2013), the new technology or practice provides annual grants—including formula funds based cannot have its intended impact if farmers do not adopt on population-related formulas and funds for specific pro- those skills or techniques. It is widely agreed that exten- grams—to LGU. States are requested to match this for- sion has played an important role in disseminating new mula portion of federal funding. In addition to this major technology and bridging the gap between innovation in the grant, NIFA also provides competitive funding to award lab and practice on the farm (Huffman, 1976; Feller, 1987; projects that target USDA’s priority mission areas. Birkhaeuser, Evenson, and Feder, 1991; and Ahearn, Yee, Since it was first established 100 years ago, extension and Bottom, 2003). has played critical roles in various time periods, including World War I, the Great Depression, and World War II. The Changing Picture of U.S. Extension It helps to secure national food and fiber needs through The U.S. extension system has changed over time in terms education, marketing, and organization. It also has helped of its budget, funding composition, and extension staffs’ USDA implement its main objectives in developing the program focus. ©1999–2014 CHOICES. All rights reserved. Articles may be reproduced or electronically distributed as long as attribution to Choices and the Agricultural & Applied Economics Association is maintained. Choices subscriptions are free and can be obtained through http://www.choicesmagazine.org. 1 CHOICES 1st Quarter 2014 • 29(1) AAEA-0314-465 Shifting Roles of Federal and State 1964, the formula programs account- accounted for 66% of the total ex- Governments in Extension Funding ed for more than 80% of total Federal tension budget. By 1936, this share Over the years, nominal (in current Extension appropriation; this share declined to 41%. Since 1936, the dollars) federal extension appropria- shrunk to below 70% by 2010. share of total funding from the states tion has continued to grow, while Under the Cooperative Extension continued to grow except for declines real total federal extension funding System, in addition to federal fund- in a few short periods, including an (in inflation-adjusted dollars using ing, state and local governments also energy shock period of 1969-1973. ERS’s research price index as the de- provide funding to LGU to support In recent years, overall state funding flator (ERS, 2013)) as well as the real extension activities. The state’s role has grown to account for about 80% formula funding have declined since in funding extension has continued of the total extension budget. While 1980 (Figure 1). The share of formula to grow since 1936 after a decline the state’s role in funding extension programs as a proportion of federal between 1928 and 1935 (Figure 2). has become increasingly important, funding has also been reduced. In In 1928, total funding by the states the total extension spending as well as total number of extension full-time- equivalent (FTEs) staff people are quite diverse across regions. Figure 1: Historical Trend of NIFA Extension Activities Appropriation (in 2000 dollars) Regional Trends of Extension FTEs According to USDA’s “Salary Analysis of Cooperative Extension Service Po- sitions” report, the number of exten- sion FTEs declined between 1980 and 2010 (Figure 3). However, the changes are unevenly distributed between spe- cialists and county extension agents. They are also different among the 10 USDA production regions. Feller (1987) addressed concerns over the uneven decline in the numbers of spe- cialist and county agents as the former shrank much faster than the latter be- tween 1975 and 1984. He cited Con- gress’ Office of Technology Assessment (OTA) that the decline of specialists Figure 2: State Share in Total Extension Funding Continues to Grow was particularly alarming “since the specialist staff has the largest level of training and is the best equipped to educate both county agents and farm- ers on evolving agricultural technolo- gies,” and indicated that “Extension has opted to protect county agents rather than extension specialists.” Yet this trend seemed to be reversed be- tween 1980 and 2010. In 1980, the number of FTEs for specialists and county agents were 3,714 and 11,441, respectively, accounting for 22% and 67% of total FTEs. In 2010, the num- ber of specialist FTEs increased to 3,972 while that of the county agents declined to 7,974, accounting for 30% and 60% of total FTEs, respectively 2 CHOICES 1st Quarter 2014 • 29(1) (Table 1). Most of the increase in the the declining trend in specialists. therefore, dropped from fourth place number of specialist FTEs occurred While the Appalachian, Corn in 1980 to seventh place in 2010, sur- during the 1980-1990 period. This Belt, and Northeast regions have passed by the Southern Plains, Lake trend may have been a response to an more extension FTEs than all other States, and Delta regions. The Pacific adjustment made to address concerns regions and remained in the top region, including Oregon (OR), Cali- from Congress as well as the public. three in both 1980 and 2010 (Fig- fornia (CA), and Washington (WA), However, the total specialist FTEs still ure 3), their total FTEs still declined had the least FTEs among the 10 re- declined along with county agents in considerably along with that of all gions in both 1980 and 2010. the two decades thereafter, adjusting to other regions. The Southeast region, Extension program portfolio overall budgetary constraints. The split including South Carolina (SC), appointments among extension, re- Alabama (AL), Georgia (GA), and USDA-NIFA identifies national pri- search, and teaching, and nine-month Florida (FL), experienced a much orities for the extension programs, appointments made has also been con- more significant 45% decline in its while funding allocations are still up sidered as one of the factors causing total FTEs. Its FTEs’ ranking has, to each individual university. In addi- tion to formula programs, NIFA also provides competitive grants to LGU Figure 3: Extension FTEs Declined Across Regions to attract proposals that best address NIFA’s priority topics. Formula fund- ing, on the other hand, is more flex- ible and to be used in addressing re- gional or state’s priority subjects and emerging issues. With various budget conditions and priority preferences, extension program portfolios differ from one region to another. Since extension program areas have changed over time, there is no single classification method that can be used over long periods. For the period be- tween 1977 and 1992, Ahearn, Yee, and Bottom (2003) showed that the program area “Agriculture and Natu- ral Resources” ranked first among four major program areas and accounted for about 45% of total FTEs. On the Table1: FTEs Composition Shifts between Specialist and County Extension other hand, many FTEs have shifted Agent from 4-H and youth, and community programs to home economics program over time. In 1992, 26% of total FTEs were dedicated to home economics programs, which had a 22% share in 1977. After the Agricultural Research, Extension, and Education Reform Act of 1998 (AREERA) required that states submit plans of work (POW) in order to receive federal funding, the program areas have shifted along with changes to NIFA’s reporting system. Therefore, data for the previously re- ported major program areas no longer exist. Nevertheless, NIFA’s POW re- porting system could help to provide information on extension program 3 CHOICES 1st Quarter 2014 • 29(1) portfolios across regions in more re- under contract increased roughly 10 nutrition and health; strengthen chil- cent years.
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