Panel on: Networking with other International Agencies
CHANGES NECESSARY FOR THE U.S. TO COMPETE IN AN
EXPANDING GLOBAL AGRICULTURAL ECONOMY
William R. Furtick
Agency Director for Food and Agriculture
Agency for International Development
Delivered at the Annual Meeting of the
Assoc. of U.S. University Directors of International Agricultural Programs
Newport, Oregon, June 7, 1989
Panel on: Networking with Other International Agencies
Changes Necessary for the U.S. to Compete in an
Expanding Global Agricultural Economy
William R. Furtick, AID
Members of AUSUDIAP, today I would like to share my thoughts with you in my capacity as
Dean Emeritus of the College of Tropical Agriculture and Human Resources of the University of
Hawaii, even though I am currently on loan to the Agency for International Development (AID) as
a senior administrator under an interagency personnel agreement. The following thoughts are
based on a lifetime of international service in universities, government and international agencies,
and do not necessarily reflect the views of A.I.D. I am deeply concerned about the complacency
in American agriculture. We have been leading for so long, we just assume this will persist. As a
result, we are about to go through the same trauma as the automobile, electronics and other U.S.
industries. My hope today is to sound the alarm in time to avoid this pending disaster.
Global Agriculture in the Next Ten Years
With the U.S. Farm Bill up for a five year renewal in 1990 and the U.S. Foreign Assistance
Program undergoing study for major revision, now is the time to examine our agricultural
programs from the global context in which they operate. To ensure that U.S. agriculture will
compete in an expanding global market place ten years from now, we must take the necessary
steps today to both diversify and modify our agriculture policy. In order to progress we need to
examine what is likely to happen globally in agriculture over this time span. Because an accurate
forecast is limited by unknown factors such as new technological breakthroughs, major economic
changes and significant political changes or disruptions, we have to base such forecast on the best
facts and trends available.
Competition Wil Increase
Several trends outside the U.S. indicate that American agriculture will face growing competition
from abroad. Western Europe has risen from a net importing market a few years ago to one of the
major agricultural exporters today. They now compete through a highly subsidized agricultural
production and export program. Both public and private sectors have invested heavily in
agricultural research. During the next ten years, Western Europe will undoubtedly become a
highly efficient agricultural competitor of the U.S. The same will probably be true in Eastern
Europe which is endowed with large areas of fertile farm lands. They too have invested heavily in
research and are rapidly moving toward privatization. A research driven, open-market agricultural
economy in East Europe would give rise to another major exporting competitor. Brazil is opening
up vast new farmlands with the use of the latest technologies and is already highly competitive in
the export market for soybeans. Corn production is also rising rapidly in Brazil. Agricultural
research outside the U.S. has burst forth over the past few years and broken the U.S. monopoly on
high technology agriculture. The primary growth in agricultural research in the U.S. is in the
private sector, but this is being matched by at least equal investments by multinational companies
in Europe and other industrial countries. The growth of the global research system has been
studied in detail by Dr. Peter Oram of the International Food Policy Research Institute (IFPRI) in
Washington, D.C. and is fully documented.
Increased Demand Due to Population Growth
Global population growth will continue for several decades regardless of how rapidly family
planning spreads in the developing world. This trend has been well documented by the United
Nations Fund for Population Assistance. During the next ten years, world agricultural production
will need to feed the equivalent of an additional Japan each year. These new mouths will be
heavily concentrated in the world's poorest countries, mainly in the tropics. Whether they produce
the needed food, purchase it from exporting countries or receive it as food aid is an important
consideration. Some of the factors that will answer this question will be examined further.
The Impact of Rising Incomes
The number of people living in absolute poverty in relation to total world population growth has
been steadily decreasing. This is particularly true for Asia where the majority of poor people live.
Even in Latin America, where heavy debt burdens and mismanaged economies are resulting in
major structural adjustments, incomes overall have improved. As income increases and people
move out of poverty, their food consumption steadily increases; but there is also a marked change
in both the quality and diversity of diets. The shift is away from cereals and other starchy basic
commodities to more meat, vegetables, fruit, edible oils and sweeteners. This rather dramatic shift
in Asia is causing local meat shortages and rapid increase in production and importation of meat
and feed grains. These feed grain imports are supplying rapidly growing poultry and swine
industries or are used to feed fish in a developing aquaculture industry. Barring unforeseen events,
these trends should continue and escalate. Africa is also experiencing these changes, although this
continent has seen the least reduction in poverty. The rate of income growth will be heavily
determined by overall international economic trends, the level of investment in agricultural
development by donors, and the resolution of the debt crisis that affects mainly Latin America and
Africa. These trends and their implications on future agricultural development, trade and foreign
aid have been thoroughly documented and detailed by Dr. John Mellor, Director General of IFPRI
in recent publications.
Industrialization Will Place More Demand for Feedstocks and Energy
Derived from Agriculture
The trend of rising incomes is resulting in rapid industrialization and increased imports to satisfy
the growing demands for energy and manufactured goods of all kinds. The industrial feedstocks
and other basic ingredients of this manufacturing boom are increasingly being derived from
agricultural products. This is also true for countries like the United States with both indigenous
sources and the financial capacity to import petroleum as the major source of industrial
feedstocks. An increasing amount of the U.S. corn and soybean crops are being utilized for
industrial purposes rather than for food and feed. Those newly industrializing countries without
domestic sources of petroleum and high demand on their foreign exchange find it very appealing
to utilize locally grown agricultural sources for the needed industrial feedstocks and energy. The
U.S. should greatly increase its investment in industrial utilization research to share in this
expanding new market. Plant sources of hydrocarbons for fuel, feedstocks and other products
have been compiled by Dr. Noel Vietmeir of the National Academy of Science. He has drawn
from a number of sources that have reviewed these potentials.
Air Pollution and Other Environmental Concerns Encourage Use of New Energy
Rapid urbanization is occurring on a global basis. By the end of this century, the world's largest
cities will all be in developing countries. Nearly all the large urban centers are choking on poor air
quality due to combustion of fossil fuels by vehicles, power plants, etc. This pollution not only
creates human discomfort and health hazards in the urban centers, but also results in deterioration
of the upper atmosphere that may lead to global climatic changes. Countries like the United States
that have vast resources of natural gas can shift to this source of energy for power plants and as a
substitute for gasoline and diesel fuel for vehicles through use as liquid fuel. An increasingly
more attractive alternative is use of ethanol and methynol derived through fermentation of plant
materials. Brazil has demonstrated this option, both to reduce use of foreign exchange to import
petroleum and as a means of cleaning up the air in its large cities. Their experience is being
increasingly studied by cities and governments all over the world.
How Will These Growing Needs Be Filled?
Inevitably, the shift to greater use of cereals as feed grains to fill the demand for higher quality
diets and the huge potential demand for industrial uses of agricultural commodities will create
rapidly growing demands for increased production. The question is who will fill these demands
and how? With current technology, the U.S. and other exporting countries could substantially
increase their production if the demand and price structure were favorable. There have been
serious questions raised about the potential of the developing countries. The "green revolution"
has about reached its maximum potential and maintaining existing yield levels of rice and wheat
appear to be a major challenge. Some are very pessimistic about the capability to obtain a
substantial new increase in yield levels. There are those in the U.S. and other industrial countries
that question the sustainability of current production levels based on high input agriculture. U.S.
farmers are already farming with a heavy use of equipment, agrichemicals, fertilizers and other
inputs, much of it made or developed abroad.
The current volume of world agricultural output has been the direct result of heavy global
investment in agricultural research. The best illustration of this has been the "green revolution" in
wheat and rice lead by multi-donor investments in research at the International Wheat and Maize
Research Center in Mexico and the International Rice Research Institute in the Philippines. The
The various international agricultural research centers have so far concentrated only on a few
basic food crops. At their mid-year meeting in Canberra, Austrailia in May 1989 the Consultative
Group on International Agricultural Research (CGIAR), which finances the centers, voted to
expand their mandate to include forestry and renewable natural resources. To keep up with the
increased demand that can readily be forecast will require not only significant new research
investments, but also different types. Where do the potentials for major increases in production
Utilization of New Biotechnologies and Computer Based Sciences
It appears that the past agricultural advancement obtained through traditional plant breeding and
increased use of agrichemicals and fertilizer has nearly come to an end for most of the major
world crops. There is good potential for gains in a variety of neglected crops, but they are of
lesser importance and impact. The significant advances in global agricultural production have
been derived from a few basic food crops such as wheat, rice, corn, sorghum, millet and potatoes
and various pulse legumes such as soybeans, peanuts, beans, chickpeas and pigeon peas. In
several of these crops, there has been no yield increase demonstrated during the past ten or more
years. Production gains have been the result of increased adoption of the improved varieties and
inputs needed to maximize yield potential. Although there is still some potential for gain through
increased adoption of existing technologies, most of the suitable agricultural land is already being
utilized with the help of the improved technologies. The real potential lies in the new wave of
high technology based research, utilizing computers and genetic engineering type biotechnologies
to further increase crop yield. Beyond yield increases, these new technologies will improve the
stability of yield by reducing the impact of climatic variables and losses from pests and diseases.
This alone will increase production. Further, these technologies will enable research scientists to
design plants and animals that produce the industrial feedstocks and fuels needed by an
industrializing and urbanizing global society. This is an area of research that justifies significant
new investments so industries are guaranteed continued supplies of energy and feedstocks as
petroleum reserves decline and as a means to avert further environmental deterioration.
Expansion of Production Area and Better Use of Less Well Endowed Lands
During the past decade, harvests have outpaced population growth, not only because more land
has been brought under the plow, but because different plant varieties, more irrigation, fertilizer
and improved tools and equipment allow farmers to produce more from each hectare of land and
each hour worked. Most of the more productive lands or those that can be irrigated have been
fully utilized with modem production technology. Therefore new production increases will have
to come either from new technologies that increase the yield of these primary production areas or
by finding means of overcoming the constraints that have limited or prevented cultivation of the
much larger areas of less well endowed or marginal lands. How large is this potential? There is
mounting evidence that the opportunity is very large. Perhaps the most significant potential is in
the vast acid savannahs in the tropical areas of Latin America, Africa and to a lesser extent in
Asia. The area of unutilized acid savannah land in Brazil, Venzuela, Columbia, Ecuador and Peru
is nearly equal to the size of the agricultural lands of the U.S. Recent technological developments
now enable these areas to produce as much corn and soybeans per acre as the best lands in the
U.S. The initial capital investment is high, but this is offset by very low land values. In addition,
most of these land areas can produce two crops per year, which is twice the annual capacity
of U.S. farmland. There are major, but less dramatic potentials in Africa and Asia. These acid
savannahs are also potential competitors for U.S. agriculture. Because of the greater insect,disease
and fertility problems of the tropics, their sustained production will be dependent on adequate
research to maintain productivity. Developing these new technologies for the acid savannahs has
been led by the highly developed national agricultural research system of Brazil (EMBRAPA). In
cooperation with private Brazilian companies, EMBRAPA has greatly increased the nation's
competence in agricultural research and exploitation of the huge regional savannahs; prospects for
increased and sustained production seem excellent.
In addition to these currently unutilized savannahs, vast areas of less well endowed agricultural
lands have yet to experience yield gains made possible by science and technology. These are
illustrated by the vast areas of upland rice with yields at very low levels, but which represent about
seventy percent of the total area growing rice. These large acreages produce less than half the
total rice production. There is good reason to believe the gap in yield between irrigated and
upland rice can be greatly reduced in the future through high technology research. At their
Canberra meeting in May, the CGIAR also approved major new investments in the West Africa
Rice Development Association to tackle the problems of non-irrigated rice production. The same
potential exist for other crops in the humid tropical and vast semi arid areas.
The Declining Role of U.S Public Sector Agricultural Research
U.S. agricultural production has been research driven by one of the largest and most effective
research systems in the world. This system has been dominated by the state Agricultural
Experiment Stations in the Land Grant Universities. These have worked in close partnership with
the Federal System provided by the Agricultural Research Service of the U.S. Department of
Agriculture and product oriented private sector research based on the seed, agrichemical,
pharmaceutical and machinery industries. The U.S. system for many years dominated global
agricultural research and trained a high proportion of the worlds' agricultural scientists. However,
during the past two decades a large and creditable global agricultural research system has
developed that dwarfs the U.S. system. It is one from which the U.S. is increasingly isolated and (
excluded by its own policies, funding methods and complacency. From a dominant role thirty
years ago, the U.S. has dropped to a minor contributor to global agricultural research with only
seven or eight percent of the non private sector scientists in the huge global system that has
developed, as indicated in the IFPRI study. The problem is not that the U.S. has less than ten
percent of the scientists supporting an increasingly competitive global economy, but that they have
largely isolated themselves from this cutting edge research network and its discoveries. During
the past few years the U.S. has gone from a major exporter of new agricultural technology to a net
importer. This change in our traditional role was substantiated by Dr. R.E. Evenson of Yale
University in a paper presented at the 1987 annual meeting of the American Association for the
Advancement of Science in Chicago. His study was based on the source of patent filings and
imports. Because of our low relative number of scientists, this trend should rapidly escalate and i
during the next ten years we can expect to import most of our new technology. The problem this
presents in our efforts to remain competitive is being able to capitalize on the first use of new
technology. Since this technology is being increasingly developed abroad, we must link into its'
development through collaborative research or risk the consequence of becoming second users of
the latest technology and thus forfeiting our competitive edge. At present, the other industrial
countries are providing substantial funds to link into the global system to insure their
competitiveness. The comparable U.S. investment is negligible. If this discrepancy is not
corrected, U.S. agriculture can expect to become increasingly less competitive. For relatively
small investments in collaborative research with the global system, the U.S. can gain the full
benefits and remain at the forefront by utilizing new technology as rapidly as it is developed and
thus remain the world's most efficient producer of agricultural products to fill a rapidly growing
and diversifying market.
What is the Most Cost Effective and Efficient Method ofLinkg Into the Global
To determine how the U.S. research system can use its strengths and incorporate the added
research capacity of the larger global system requires examination of the current U.S. agricultural
research system and its future directions. The U.S. system has been based on the Land Grant
University system which focuses on local needs with major support from state appropriated funds.
The national needs and the cross cutting issues have been addressed by influencing the university
experiment station system by a significant amount of federal funds passed through to the state
experiment stations on a formula basis set by the Hatch Act. These have been supplemented by
the Federal Agricultural Research Service of the USDA. The basic means of steering the U.S.
agricultural research system to address priority problems has been through this allocation of
federal funds and the requirements of the state matching funds. Therefore, it is proposed that the
Hatch Act funds be increased by twenty five percent with the increase used to fund international
collaborative research projects in priority areas with foreign research organizations. It is proposed
that these collaborative research projects be both core funded based on capacity and state matching
funds and on a competitive basis. It is further proposed that an equivalent increase be provided for
the Agricultural Research Service for the same purpose. An alternative to use of the Hatch Act as
administered by the Cooperative State Research Service would be to greatly expand the funding of
the USDA Office of International Cooperation for Development (OICD). Because the future
agricultural innovations will be determined by basic and high technology research on
biotechnologies, and computer based and other technologies, it is proposed that the budget of the
National Science Foundation be increased for use in competitive grants for collaborative
international research between U.S. institutions and those in the international research system.
These funds should be equivalent to the increase in Hatch Act funds allocated for more mission
Linkage with International Agricultural Research Centers (IARCs)
One of the most dynamic components of the global research system is a network of twenty five
global and regional research centers funded on a coordinated basis by the international bilateral
and multilateral donors. This research system currently has an annual budget of about $300
million. The U.S. through the Agency for International Development funds about eighteen percent
of this total. Because this system has become the focal point of germplasm collection and new
technology development for the major world crops i.e. wheat, corn, rice, sorghum, barley, millet,
potatoes, grain legumes, livestock and a variety of other tropical food crops, the European donors
not only contribute significant funds to the IARCs, but also make major linkage contributions
to their own research institutions. The U.S. has provided only insignificant linkage funds to U.S.
These linkage funds not only funnel new technology back to the donor countries, but also provide
an avenue for their scientists to be employed by these centers. Overall, the European donors
contribute about three times as much money to their own institutions for collaborative linkages as
they provide to fund the IARCs. To rectify this disparity, the U.S. through A.I.D. should expand
its current minimal linkage programs to one similar to the European donors. The proposed
mechanism would be a linkage program of $150 million per year to be disbursed by A.I.D. as
competitive grants to U.S. institutions.
Coordination of the New Global Collaborative Program
The U.S. domestic agricultural research system has never had strong central coordination
mechansims. This has had both its strong and weak points. The great agricultural diversity of the
U.S. has been best served by a highly decentralized system. Increasingly, major national goals
have been coordinated by expanded use of highly targeted competitive grants. The difficulty,
however, has been establishing the priorities that the competitive grants should address.
For the expanded international linkage program, it is proposed that the National Research Council
of the National Academy of Sciences be funded to increase the capacity of the Board on Science
and Technology for International Development (BOSTID) to coordinate the setting of a U.S.
international research agenda. These research priorities would be determined in close
collaboration with USDA, NSF, AID, and the U.S. agricultural agencies and research institutions
in both the public and private sector, along with appropriate international organizations and
institutions. Implementation might be through establishment of and interagency Center for
International Collaborative Agricultural Research to plan and coordinate the efforts of the various
agencies, universities, PVOs and the private sector. Each participating agency or institution might
have an appropriate number of staff slots allocated in the new Center.
Maintaining and Enhancing the U.S. Investment in International Agricultural
There is clear evidence that the growth market for both U.S. agricultural commodities and
industrial goods is in the developing countries where rapid population growth is occurring. The
economies of most of these countries are still largely agricultural. In order for these countries to
expand economically, the agricultural sector must be the driving force. There is a direct
relationship between the rate of growth in the agricultural sector of developing countries and their
expansion in import of American agricultural and other commodities. These relationships and the
future potentials of developing countries as U.S. markets have been thoroughly documented by
IFPRI, the Economic Research Service of USDA and a number of American Universities.
Therefore, it is in the best interest of U.S. agriculture to continue and increase investment in the
agricultural development programs of A.I.D. and to encourage the international and private
development banks to give priority to agricultural development loans. As the pace of global
disarmament increases, it would make sound investment sense to channel some of the savings
from decreased military assistance into agricultural development, both foreign and domestic.
Establish USAID Mission External Strategic Planning and Program Panels
The A.I.D. personnel and decision making processes make it difficult for A.I.D. missions to do
long range development planning, coordinate with other donors and implement programs with
continuity and maximum impact. Mission priorities often reflect the frequent changes in Mission
management and are also affected by the short assignment period of the technical agricultural
staff. To overcome these flaws inherent in the system and maximize the impact from a well
planned sustained effort, it is proposed that each Missions' long range strategies and agricultural
development planning, program development, implementation, donor coordination and monitoring
be placed under the purview of a Mission External Strategic Planning and Program Panel. The
panel should be a continuing advisory panel with members appointed for a term of years with
allowance for some rotation. Membership would include people who have close familiarity with
the country or region and dedication to the country's agricultural development. The council
members could be drawn from universities, PVOs, commodity or other agricultural groups,
development professionals and agency staff.
Because Agency operations generally provide three to four year personnel rotations, many to other
regions, an advisory panel as such would offer continuity, ensure program direction that is
responsive as a country advances, and help provide, through the Agency members, an institutional
history of program impact within A.I.D. Furthermore, this would allow more complete utilization
of Agency staff who have long-term familiarity with given countries. It would also strengthen and
give creditability to assessments of agricultural development potential and sound judgment
regarding country resource allocation.
Recognizing that an external panel for each Mission would be a very large undertaking, it is
proposed that a panel serve several Missions similar either through geography or stage of
development i.e., Southern cone of Africa, Sahel etc. or a cluster of advanced developing countries
in Latin America, Asia or the Near East. This should make it possible to limit the global total to
12-15 panels with about 30-60 day annual time commitments by each panel member. This
approach would act as a means of transferring lessons learned across missions with similar
The U.S. University System Must be Internationalized
Like U.S. agricultural research, the educational focus of U.S. universities has primarily a domestic
orientation, even though it trains a massive number of foreign students. If the U.S. private sector
and the domestic agricultural research system are to be able to employ American graduates with
an essential international understanding and perspective, the universities will need to
"internationalize" their curriculum. This should include more arrangements for U.S. students to
perform graduate research abroad under faculty that have international experience through
involvement in international collaborative research projects. By providing students greater access
to international collaborative research activities the U.S. can increase its share in the development
and utilization of new agricultural technologies. The employment options for these students
should be expanded by U.S. participation in the United Nations Junior Professional Officer
programs that form a major entry into the international organizations and collaborative graduate
training and post-doctoral programs of the international research centers that form the basis for
selection of future staff. The international agencies, industries and research centers once had large
numbers of American staff and thus American influence. This is rapidly disappearing. The U.S.
needs to regain involvement and experience in order to compete in the international market for
agricultural products and agricultural technology that will grow rapidly in the next ten years. It is
up to the agricultural leaders and the U.S. Congress to insure that the U.S. does not loose its
In summary, the following initiatives are proposed:
Increase Hatch Act funds by 25% that are earmarked for core support and competitive
grants for collaborative research with foreign research institutions, or establish a similar
program in OICD.
Involve the federal research scientists in this effort through a similarly earmarked 25%
increase in the ARS budget.
Match the Hatch Act funds with a similar increase in the funds of NSF for support of basic
and strategic collaborative research.
Link U.S. scientists, through collaborative research, into programs of the IARCs by.
establishing a $150 million competitive linkage grant program in conjunction with the
A.I.D. program that supports the U.S. contribution to the IARCs.
Substantially increase the funding of the current pilot program of U.S. support for the U.N.
Associate Professional Officers program administered by the Office of International
Cooperation in Development in USDA.
Strengthen the funding of the agricultural development programs of A.I.D. and establish
an external agricultural development program committee for each USAID mission to steer
the agricultural development of each country.
Provide additional funding to BOSTID to coordinate the establishment of national
research priorities for new international initiatives.
Establish a new Interagency Center for International Collaborative Agricultural Research
to coordinate multi organizational implementation and participation.