World Food Challenges and New York Wine and Grapes

COMMENTARY

By Marc A. Smith

Smith

Agricultural research and extension costs money, but it creates value for the overall economy. Early in 2010 the late, always prescient Dr. Norman Borlaug predicted, "In the next 50 years we are going to have to produce more food than we have in the last 10,000 years, and that is a daunting task." Financial support to meet this challenge is dwindling, both at the state and national level. In the face of this erosion in public funding, where will the innovations New York growers need to stay competitive come from, and who will support their development? New ways of meshing public and private support for agricultural research and extension will be needed to meet world food demand and keep New York agriculture competitive.

Contradictory Signals about the Value of Agriculture.

In 1972, while my father was pursuing his Ph.D. at Purdue University and I was a high school senior in America's heartland, Purdue professor of agricultural economics and then U.S. Secretary of Agriculture Earl Butz was urging U.S. farmers to plant "fencerow to fencerow" in order to export U.S. grains to a hungry world population. Upon Mr. Butz's death in 2008, an anonymous farmer expressed his sentiments in an email to Farm Journal magazine: "He made us proud to be producing food for the world." Even greater demands on American growers to feed the world will be driven by "The 9-billion people question," as the need to increase agricultural production and productivity dramatically by 2050 was characterized in The Economist magazine. The necessity of fulfilling humanity's most basic need would seem to attach very high value to the U.S. food and agricultural system and promise profitable returns to public and private investments in the next stages of the nation's agricultural development. If, as The Economist points out, "The only reliable way to produce more food is to use better technology," then unprecedented opportunities for useful agricultural research and extension programs should be plentiful.

Budgetary signals from Congress continue the longer term decline in the public sector's "willingness to pay" for food and agricultural research and extension programs, despite the demonstrated, urgent need to make global investment in food and agricultural productivity a high public priority.

Early in June of this year, the agriculture subcommittee of the U.S. House of Representatives Appropriations Committee voted to cut 13.7% from funds supporting agricultural research programs in their Fiscal Year (FY) 2012 U.S. Department of Agriculture (USDA) budget. If this appropriations bill passes, the cumulative reductions to these federal research funds over the past two years will total $600 million, which is equal to 20% of the FY 2010 line item for these purposes. The Obama Administration's budget for food safety funding for the Food and Drug Administration would be cut by 21% (10% below FY 2011 levels), or $205 million. Approximately $14 million, appropriated by Congress since 2003 for the USDA-ARS Grape Genetics Research Center at Geneva, a major Washington lobbying effort for Cornell, was rescinded.

 These budgetary signals from Congress continue the longer term decline in the public sector's "willingness to pay" for food and agricultural research and extension programs, despite the demonstrated, urgent need to make global investment in food and agricultural productivity a high public priority.

New York State Agriculture and its Research and Extension Infrastructure in Context.

In 2010, the U.S. Bureau of Economic Analysis (BEA) estimated the gross domestic product (GDP) of New York State, the nation's third largest economy, to be just under $1.2 trillion. The $4.1 billion contribution of New York's 29th ranked agricultural economy to the state GDP trailed far behind the product value generated by our top two industries, finance and insurance ($199 billion) and real estate, rental and leasing ($166 billion). Despite all the speeches you may have heard to the contrary, agriculture is not New York's largest industry.

Over the past three New York State budget sessions, Cornell's College of Agriculture and Life Sciences has incurred cumulative cuts of 25% in state support through the State University of New York. After living on the edge of financial extinction for two years, key New York State-funded research programs such as the New York Farm Viability Institute, New York Wine and Grape Foundation (NYWGF) and New York State Integrated Pest Management saw their funding eliminated and then restored in the FY2011-2012 budget, albeit to levels significantly lower than previous averages.

Implications for Viticulture and Enology in New York State.

In February 2011, before all the legislative outcomes described above were known, 39 viticulture research and extension proposals, requesting nearly $1.2 million, were presented to the Lake Erie Regional Grape and Extension Program (LERGP) by Cornell, Penn State and USDA-ARS faculty and scientists. The LERGP board represents growers and processors in the Lake Erie region and collects $0.75/ton for grapes handled by National Grape Cooperative/Welch's and other processors to invest in research supporting the regional industry. This year the LERGP was able to provide $78,000 in private funds for this work.

Marc-Smith-Table

Proposals were written under the customary assumption that other funding sources, namely the USDA Viticulture Consortium and the state-funded New York Wine and Grape Foundation would be available to fund the majority of projects addressing high priority industry needs. At the time, budgets for both of these funds, some $1 million for viticulture and enology research in the eastern United States, had been eliminated. Cornell utilized income from targeted endowments to meet some of the need and, as noted above, the state legislature restored NYWGF funds to the 2010 levels. In the meantime, Cornell viticulture and enology faculty members have been successful in leading efforts to secure large, multi-state competitive federal grants (Specialty Crops Research Initiative, for example) to address nationally defined priorities. Nevertheless, the significant difference between local and regional stakeholder needs and land grant response is now tangible evidence of the global agricultural productivity gap.

Essential Change and Resilience.

Agriculture is the business of growing. The healthy growth of plants and animals, as well as farm profitability and economic development, depend on persistently innovative research in particular vineyards, throughout upstate New York, across the nation, and around the world. Despite its small size relative to other state economic sectors, many studies have shown that dollars invested in agricultural industries are transformed into more dollars spent and more jobs generated than in many competing economic enterprises. The New York State wine and grape industry has set a high standard as a major growth sector and economic multiplier across upstate New York for 35 years.

Dollars invested in agricultural industries are transformed into more dollars spent and more jobs generated than in many competing economic enterprises.

In the wake of the Great Recession, and as intense battles in Washington and Albany over public spending and priorities continue, the challenge of finding adequate resources to finance progress in enology and viticulture has become more daunting. Yet, at this writing members of New York's congressional delegation are reviewing the strengths of the recently eliminated Viticulture Consortium with an eye to regaining the nationwide economic return on investment generated by the program since its inception in 1996. Following the example set by apple growers in New York State, who recently voted to double their approximately $200,000 annual investment in research, leaders in the wine and grape industry are actively pursuing a similar, yet unprecedented "research order" to generate private sector support for programs needed to solve problems and generate profitable practices, new products and technologies. These are promising developments on the bumpy road to an entirely new system for future funding of applied agricultural research and extension. We still, however, must reach a number of important milestones along the way, for example:

  • More than ever before, university researchers will need to regularly demonstrate the return their food and agricultural programs deliver on investments by the public and private sector.
  •  New York State must define and maintain a reliable commitment to public investment in food and agricultural research, in the interests of the upstate economy and consumers looking for high quality, locally produced food and beverages.
  • The wine and grape industry must move ahead decisively to emulate the research funding achievements of New York State apple growers through their recent research order referendum. Until and even after they are established, state administered market orders are all about process. Firm consensus about the level of funding growers can realistically invest in a robust state research and extension infrastructure is key to avoiding delays.

More than ever before, university researchers will need to regularly demonstrate the return their food and agricultural programs deliver on investments by the public and private sector.

In our own microcosm of the vital global effort to build the capacity necessary to feed the world, sustained, well-informed, creative engagement among political, business and academic leaders will be essential to marshal the resources necessary to secure continued prosperity in New York's wine and grape country.

Marc Smith is the assistant director of the New York State Agricultural Experiment station and an extension associate in the Dyson School of Applied Economics and Management at Cornell.