Michael E. Salassi Dept. of Agricultural Economics & Agribusiness Louisiana State University Agricultural Center Louisiana Agricultural Experiment Station / Louisiana Cooperative Extension Service www.lsuagcenter.com
(1.) My Background (2.) Importance of Louisiana Agriculture & Ag. Research (3.) Future Direction of Agricultural Research (4.) Charting LAES s Course for the Future
B.S., Agribusiness, Louisiana State University, 1979 M.S., Agricultural Economics, Louisiana State University, 1981 Ph.D., Agricultural Economics, Mississippi State University, 1985 1985-1994 Agricultural Economist Economic Research Service, USDA Washington, D.C. 1994-2002 Associate Professor 2002-2004 Professor 2004-Present Fairbanks Endowed Professor Dept. of Ag. Economics & Agribusiness LSU AgCenter & LSU A&M Campus (1.) Background
Years Taught at LSU : 1995-2011 Courses Taught in AGEC: 3303, 3413, 3700, 4103, 4700, 7123, 7700, 7703 Sections Taught in others: EXST 4085, BE 4342 AGEC 3413 - Agricultural Business Management Decisions Identification of typical decisions of agricultural business firms; development of concepts, procedures, and analyses that facilitate planning, organizing, directing, coordinating, and controlling functions within agricultural business firms. AGEC 7123 - Operations Research Methods in Ag. Econ. Application of operations research methods to economic problems in agricultural production, marketing, and resource use; simplex method; duality; sensitivity analysis; linear and nonlinear programming; integer programming; network analysis; simulation. (1.) Background
Primary research focus has been on the economics of crop production in Louisiana. The general objective of this research program is to conduct economic evaluations of physical, technological, economic, and political factors affecting crop production as a single enterprise, and the management of commercial farms, within a whole-farm context, in Louisiana. Recent research activities have expanded into the area of biofuels, focusing specifically on the economics of biofuel feedstock production, transportation and processing. Research publications (1980-2011): 432 Professional presentations (1982-2011): 161 Presentations to stakeholders (1994-2011): 238 External grant funds (1995-2011): $1,695,008 (1.) Background
1997-2000 Assistant Director Louisiana Ag. Experiment Station 2002 Louisiana Sugarcane Disaster Program ($60 million Federal program) 2005 Louisiana Sugarcane Disaster Program ($40 million Federal program) 2008 Assistant to the Director Louisiana Ag. Experiment Station (1.) Background
(2.) Importance of Ag. & Ag. Research
Farm share Marketing share 15.8 84.2 Food at home Food away - Farm share 24.3 - Farm share 4.7 - Marketing share 75.7 - Marketing share 95.3 (2.) Importance of Ag. & Ag. Research Source: Economic Research Service, USDA
11.6 18.6 4.0 3.5 13.6 33.7 6.8 4.4 3. 8 (2.) Importance of Ag. & Ag. Research Source: Economic Research Service, USDA
La. Exports Industry Rank - 2010: 1) Ag Products $15.1 billion 2) Petroleum $10.8 billion 3) Chemicals $ 6.3 billion 4) Food Products $ 3.9 billion 5) Machinery $ 1.0 billion Total La. Exports in 2010: $41.3 billion Agricultural Products Share: 36.5% La. Industry Exports - 2010: 1) Ag products $15,099.9 million 2) Food products $ 3,948.1 million 3) Paper $ 270.6 million 4) Fisheries $ 73.1 million 5) Wood products $ 58.9 million 6) Textiles $ 30.7 million 7) Apparel $ 8.6 million 8) Forestry products $ 8.0 million 9) Livestock $ 7.2 million 10) Leather $ 3.6 million Total agricultural, food, forestry, fisheries and textile state export share: 47.6% Source: World Trade Center of New Orleans (2.) Importance of Ag. & Ag. Research
U.S. Exports by State - 2010: La. Port Ranking by Tonnage - 2009: 1) Texas $206.6 billion 2) California $143.2 billion 3) New York $ 67.6 billion 4) Florida $ 55.2 billion 5) Washington $ 53.2 billion 6) Illinois $ 49.7 billion 7) Michigan $ 44.5 billion 8) Ohio $ 41.4 billion 9) Louisiana $ 41.3 billion 10) Pennsylvania $ 34.8 billion U.S. agricultural exports support $280.5 billion in economic output and 1.6 million jobs nationwide. Paggi, et. al., 2011 1) South Louisiana 212.5 million 6) New Orleans 68.1 million 12) Lake Charles 52.2 million 14) Baton Rouge 51.9 million 15) Plaquemines 50.8 million Source: American Association of Port Authorities (2.) Importance of Ag. & Ag. Research
It is widely agreed that increased productivity is the main contributor to economic growth in U.S. agriculture. Total factor productivity measures changes in the efficiency with which inputs are transformed into outputs. Federal-State public research, as well as private-sector research, has been a key driver of ag. productivity growth. Studies have quantified the rate of return from ag. research in the 40-50% range. Ag. research provides benefits not only to the farm sector, but also to agribusinesses, rural communities and consumers. (2.) Importance of Ag. & Ag. Research Source: Economic Research Service, USDA
1) Morrill Act of 1862 Established the land-grant college system 2) Hatch Act of 1887 Established the agricultural experiment station system 3) Smith-Lever Act of 1914 Established the cooperative extension service system 4) Research and Marketing Act of 1946 Established the initial funding for regional/multistate research 5) McIntire-Stennis Act of 1962 Established funding for forestry research at land-grant colleges 6) National Ag. Research, Extension, & Teaching Policy Act of 1977 Designated USDA as the lead agency for food and ag. sciences (3.) Future Direction of Ag. Research
Agricultural research objectives: 1) Ensure food safety and health through agricultural and food systems 2) Provide the information and knowledge needed to further improve environmental stewardship 3) Improve the economic return to agricultural producers 4) Strengthen our communities and families 5) Develop new and more competitive crop production practices and products and new uses for diverse crops and novel plant species 6) Develop new and more competitive animal production practices and products and new uses for animals. 7) Lessen the risks of local and global climatic change on food, fiber, and fuel production (3.) Future Direction of Ag. Research 2006-2011
Food and agriculture research challenge areas: 1) Enhance the sustainability, competitiveness, and profitability of food and agriculture systems 2) Adapt to and mitigate the impacts of climate change on food, feed, fiber, and fuel systems 3) Support energy security and the development of the bioeconomy from renewable natural resources 4) Play a leadership role to ensure a safe, secure and abundant food supply for the U.S. and the world (3.) Future Direction of Ag. Research
Food and agriculture research challenge areas: 5) Improve human health, nutrition, and wellness of the population 6) Heighten environmental stewardship through the development of sustainable management practices 7) Strengthen individual, family and community development and resilience (3.) Future Direction of Ag. Research
Agricultural Emphasis Areas: 1) Education and Science Literacy of the Agricultural Workforce 2) Rural Prosperity and Community Development 3) Biofuels Environmentally Sustainable and Regionally Based 4) Responding to Climate Change 5) Water Conservation, Use and Quality 6) Landscape-scale Conservation and Management 7) Food Security Local to Global 8) Linking Agricultural Production and Trade 9) Food Safety 10) Nutrition and Childhood Obesity 11) The Fundamentals Crop and Livestock Production Feb. 2011 (3.) Future Direction of Ag. Research
Formula funds represent the largest allocation of USDA extramural funds, but the relative and absolute amount of resources distributed by formula funds has been steadily declining over the past three decades. Source: Agricultural Research, Education, and Extension: Issues and Background, Congressional Research Service, January 2011. (3.) Future Direction of Ag. Research
Total 2009 USDA Funding Southern Region SAES ($ million) Alabama $ 5.59 Arkansas $ 9.26 Florida $ 12.26 Georgia $ 8.90 Kentucky $ 8.72 Louisiana $ 5.31 Mississippi $ 9.53 North Carolina $ 14.45 Oklahoma $ 8.16 Puerto Rico $ 4.18 South Carolina $ 5.15 Tennessee $ 8.06 Texas $ 14.17 Virgin Islands $ 1.00 Virginia $ 9.21 Total $124.01 National Total $558.09 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Other SBIR NRI Spec Grants An Health Evans Allen Mc-Stn Hatch (3.) Future Direction of Ag. Research
Important issues in the formula vs. competitive fed. funding debate: 1) Who sets the research agenda? 2) How would changes affect the willingness of scientists to undertake longer-term research objectives? 3) Would changes affect the capacity of states to meet local and regional needs or to respond quickly to crises? 4) What is the relative cost of distributing the two types of funding? 5) Which states would be likely to gain or lose? 6) Would society gain or lose (research discovery risk)? 7) How would changes affect the sustainability of research funding? (3.) Future Direction of Ag. Research Wallace, et al., 2006
Fundamental forces shaping the competitive agribusiness landscape: 1) Value chain relationships are changing Input suppliers => Producers => Processors => Retailers => Consumers 2) Forces that shape the agribusiness industry: Rivalry among existing competitors Threat of new entrants Bargaining power of suppliers Bargaining power of buyers Threat of substitute products Changes in technology Internationalization of the value change 3) Increasing importance of the triple bottom line: Economically Viable, Environmentally Friendly, Socially Responsible (3.) Future Direction of Ag. Research Olson and Boehlje, 2010
(A.) Keys for Success (within the LAES/LSU AgCenter): 1) Hire and retain top quality faculty 2) Place faculty in a work environment which will afford them the best opportunity to be productive and successful 3) Encourage research collaboration across disciplines and units 4) Identify specific research objectives annually and revise as needed 5) Allocate research resources in an efficient manner using accurate information, i.e., weigh benefits and costs 6) Maintain frequent communication within the LAES and LSU AgCenter system regarding relevant issues impacting research 7) Make decisions based upon what is in the best interests of the overall mission of the LAES in consultation with appropriate parties (4.) Charting Future Course for LAES
(B.) Keys for Success (outside the LAES/LSU AgCenter): 1) Develop strong relationships with clientele/stakeholders 2) Improve clientele/stakeholder input opportunities into research planning and grant funding proposals 3) Find ways to be competitive in competitive grants 4) Grants and publications are a necessary means to a relevant end 5) Promote the impact and importance of LAES research to the general public beyond our immediate stakeholders 6) Take advantage of opportunities through technology, media and other avenues to explain the importance of agriculture in Louisiana and agricultural research at the LSU AgCenter (4.) Charting Future Course for LAES
Research Goals and Strategies: 1) Sustain healthy ecosystems and conserve our natural resources 2) Enhance competitiveness, prosperity, and sustainability of urban and rural agricultural industries 3) Improve public health and well-being 4) Mitigate negative effects of global climate change 5) Create and utilize fundamental information to optimize plant and animal production and human health (4.) Charting Future Course for LAES
Research Opportunities and Core Programs of the Future: 1) Sustainability 2) Energy 3) Climate change 4) Water 5) Food systems and food safety 6) Ecosystem health and services 7) Resource production (4.) Charting Future Course for LAES
The experiment station has a wide array of research resources or inputs for use in conducting research: Units - departments/branch stations Personnel faculty, research associates, other personnel Facilities labs, equipment, etc. Funds state, federal, grants, IP, etc. Each research resource is unique with distinct and different advantages and abilities To achieve success in meeting our research goals, it is necessary to: 1. Specifically identify our research goals on an ongoing basis 2. Identify the unique attributes and abilities of each resource 3. Allocate those scarce resources in an optimal manner to maximize research success (4.) Charting Future Course for LAES
Red River Hill Farm Calhoun Pecan Macon Ridge Sweet Potato Northeast Campus Departments Dean Lee Rosepine Idlewild Burden Central Stations Aquaculture Southeast Hammond Rice Iberia (4.) Charting Future Course for LAES Sugar Reproductive Biology Coastal Area
My goals for La. Agricultural Experiment Station as Director would be: To ensure that the LAES continues to play a major role in enhancing the quality of life of Louisiana citizens through basic and applied research, outreach and education To meet both the short-term and long-run needs of our state clientele and stakeholders through research and outreach To increase the productiveness and prominence of our research at the state, regional and national level To increase the knowledge and understanding of the importance of agricultural research and how it impacts the daily lives of the general public in Louisiana beyond our immediate stakeholders (4.) Charting Future Course for LAES