49 



There is a history dating from the 1960's of the USDA and exper- 

 iment stations cooperating to set priorities. George Norton at VPI 

 and some others have put together a book on priority setting. It 

 has a commodity focus and resources are allocated either based 

 upon the value of the commodity or expected pay out. Also, Robert 

 Evenson and Y. Kislev have developed a kind of simple congruency 

 rule where research expenditures are allocated in proportion to ex- 

 pected benefits to be received from the different research areas. 



These particular simple rules have some problems, sometimes, 

 because spillover benefits are not properly taken into account 

 across regions, or across institutions. Also, some of the 

 interdependencies and advances in science, which we believe occur, 

 are sometimes ignored. 



Priority setting, more generally, is controversial as seen here 

 today and I am sure in other discussions. Economists tend to use 

 social marginal rates of return as a criteria for evaluating which 

 is the best. People who have a broader focus in social sciences and 

 others tend to pick other kinds of criteria. We do believe that the 

 social rate of return is a very important criteria if you are thinking 

 of general economic welfare. You could expand it to include some 

 other benefits, but they normally become very difficult to quantify 

 and to aggregate into any simple meaningful total. 



We do believe that national level priorities are seen quite dif- 

 ferently from the State level ones for very good reasons, and a lot 

 of the conflicts that we see surfacing are due to these differences. 

 The national level reports always call for more coordination, but 

 the States see that coordination doesn't lead them to do the things 

 that their local client groups are really asking them to do. At the 

 national level, commodity program costs and advances in tech- 

 nology are frequently in conflict. The State governments are not 

 engaged in commodity programs, so they don't have that problem 

 to worry about. 



A few specific implications for priority setting follow. We believe 

 one key area, is establishing more firmly the boundary between 

 what is relevant public and private research. In our opinion, the 

 private sector should take on those kinds of research activities that 

 yield products that they can sell for profit, and the public sector 

 should largely take on those activities that the private sector is un- 

 willing or unable to undertake. There is kind of a gray area in be- 

 tween. 



We do not believe that the public sector should primarily be de- 

 veloping technology to sell for high prices. That is not the nature 

 of "public good" aspects of knowledge. It is very difficult to market. 

 Now, there is a role for joint ventures between the public and pri- 

 vate sectors to try to get the private sector to help fund more of 

 the basic advances in pretechnology and general sciences, and I 

 think much more could be done there. 



In terms of planning more generally for agricultural research, 

 pretechnology and general sciences are important. At the national 

 level we need to establish a firm science base for what is needed 

 in future applied agricultural research in both the public and pri- 

 vate sectors. These are things associated with biotechnology, envi- 

 ronmental quality, food safety, and health, in particular. It is my 



