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proportion) by state appropriations. In the case of Hatch funds, 25% of the total fund must 

 be spend on regional collaborative research. States are required to provide a one-for-one 

 match of formula funds. 



The main purpose of formula funds awarded to the SAESs is to provide a mechanism for 

 decentralized implementation of national strategies. Historically, the concept recognizes the 

 substantial site specificity of agriculture and thus the research programs which support these 

 industries. It assumes that decision making on project funding at the state level provides 

 optimum focus and assured relevance of the efforts. 



Projects funded with a combination of state and federal formula funds are often the first to 

 respond to emerging problems or opportunities as they are recognized at the state level. 

 For instance, there was a major redirection of effort to address the emergency related to the 

 impact of the sweet potato white fly on cotton and horticultural crops by the affected states 

 well before the USDA organized a formal national campaign. 



Shared long-term state-federal commitments which are enabled by the appropriation of 

 formula funds make the CSRS-SAES relationship unique among federal granting agencies 

 and universities. Long-term fiscal relationships enable and justify long-term planning and 

 program collaboration between the SAESs and USDA. The federal government leverages 

 its research investment in formula funds by at least three-to-one with state appropriations. 

 This type of arrangement forms a natural basis for effective partnering and is totally 

 consistent with the concepts enunciated in "Reinventing Government" relative to 

 empowerment at the lowest level, user involvement and total quality management. 



Over the decade of the eighties and into the nineties, there has been a consistent small 

 increase in formula funding which has not always kept pace with inflation. Thus, over this 

 period the "science power" of this kind of funding has been reduced. Thus, the slope of the 

 constant dollar line for formula funds trends downward slightly over time. This is 

 exacerbated in some SAESs by broader institutional decisions to maintain competitiveness 

 by increasing salaries of faculty, even when new funds were not available. Most institutions 

 have offset this erosion by more aggressively seeking and acquiring grant funds both within 

 USDA and elsewhere, liiere is some concern that "chasing grant money" detracts, at least 

 to some extent, from the ability of faculty and administrators to maintain focus on the most 

 pressing issues and priorities. 



Periodically, the appropriateness of formula funding is questioned because (1) the federal 

 govermnent does not have the same ability to direct these resources to specific application 

 as is possible with competitive or special grants and (2) there is the incorrect perception by 

 some that the quality of research cannot be assured since projects are not subjected to the 

 same rigor of merit review as in other programs. 



