Farm Bill Debate: Formula Funding Versus Competitive Grants

Why It Matters

Congress is deep in negotiations over a new farm bill, and a fresh Congressional Research Service report on farm bill agricultural research lays bare a set of funding tensions that could reshape how the federal government supports agricultural science for the next five years. At the center of the debate: whether to keep stable, formula-based funding flowing to land-grant universities, or shift dollars toward competitive grants, as the Trump administration's budget proposes.

The answer has real consequences for historically Black colleges, tribal institutions, and the aging laboratories that underpin American agricultural innovation.

The Big Picture

The research, extension, and education title has been a fixture of every farm bill since 1977. It governs how USDA channels money to universities and its own internal research agencies, including the National Institute of Food and Agriculture (NIFA), the Agricultural Research Service (ARS), the Economic Research Service (ERS), and the National Agricultural Statistics Service (NASS).

The 2018 farm bill, which was the last fully enacted version, expired in FY2023. Congress has since passed three one-year extensions, with the most recent running through FY2026. Now the 119th Congress is working toward a new version, and the House passed the Farm, Food, and National Security Act of 2026 (H.R. 7567) on April 30, 2026, which would reauthorize these programs through September 30, 2031.

Agricultural research funding flows through two primary mechanisms that have long been in tension. Capacity, or formula, funding is allocated by statute to land-grant institutions, giving them flexibility to set their own priorities. Competitive grants, like USDA's flagship Agriculture and Food Research Initiative (AFRI), are awarded through peer review. AFRI is authorized at $700 million annually, but appropriated funding has consistently fallen below that level.

The CRS report identifies three pressure points Congress must resolve.

Capacity vs. Competitive Funding

The Trump administration's FY2027 budget proposes reducing capacity funding and expanding competitive grants. Supporters of the formula-based approach argue it provides the stable, long-term funding base that ARS needs to address national research priorities. Supporters of competitive grants argue the model promotes innovation and broader participation across institutions.

H.R. 7567 includes provisions that expand the list of competitive grants for high-priority research areas, including specialty crop mechanization, soil health, PFAS contamination, and invasive species. If enacted alongside the administration's budget proposals, the combined effect would represent a meaningful shift in how agricultural extension services and research programs are structured and resourced.

Funding Equity Among Land-Grant Institutions

The CRS report flags persistent funding disparities among the three tiers of land-grant institutions. The 1862 institutions, the original land-grant universities, have historically received the most support. The 1890 institutions, which are historically Black colleges and universities, face a different set of matching fund requirements that, combined with variation in states' ability to meet them, have contributed to ongoing gaps in overall funding levels. The 2018 farm bill added transparency requirements for reporting state matching fund waivers for 1890 institutions, but the report notes that disparities persist.

The 1994 institutions, which are tribal colleges, face a separate challenge. They do not receive dedicated capacity funding at all, relying instead on endowment income and competitive grants.

H.R. 7567 addresses both issues directly, proposing higher minimum funding levels and updated matching requirements for 1890 institutions, and expanded authorities for 1994 institutions covering land, infrastructure, and equipment. The administration's proposal to reduce formula funding cuts in the opposite direction, creating a tension Congress will need to resolve as the bill moves to the Senate.

Aging Infrastructure

Many NIFA grant programs restrict the use of funds for construction and facility maintenance, which limits how much competitive grants can address infrastructure needs. Stakeholders have raised concerns about aging research facilities, and the CRS report specifically notes that the Beltsville Agricultural Research Center in Maryland is undergoing modernization, consolidation, and, in some cases, potential decommissioning or relocation of research functions to regional hubs.

H.R. 7567 would expand support for research facilities and equipment, but this provision sits in tension with broader administration efforts to reduce the federal footprint and consolidate agency operations.

There is also a notable gap in funding for the Agriculture Advanced Research and Development Authority (AGARDA), which was established in the 2018 farm bill to support high-risk, high-reward research. It is authorized at $50 million annually but has received an average of just $0.8 million per year between FY2019 and FY2026.

Political Stakes

For the administration, the push to shift from capacity to competitive funding reflects a broader preference for merit-based allocation over formula-driven spending. But that framing collides with the political reality that formula funding disproportionately supports HBCUs and tribal colleges, institutions that already operate with fewer resources than their 1862 counterparts. Cutting formula funding in the name of efficiency could draw sharp pushback from members of Congress who represent those institutions and their communities.

For House Republicans, the passage of H.R. 7567 represents a legislative vehicle that expands several programs the administration's budget would trim. The bill increases infrastructure support, boosts 1890 and 1994 institution funding, and creates new programs, including an Agricultural Innovation Corps. That divergence from the White House's budget priorities will require negotiation before any final bill can pass both chambers and be signed into law.

For Democrats, the equity provisions in H.R. 7567 offer potential common ground, even as they remain skeptical of other elements of the broader farm bill package. The funding disparities between 1862 and 1890 institutions have been a long-standing concern, and any rollback of the transparency and matching requirements added in 2018 would likely face resistance.

For the public, the stakes are less visible but no less real. Agricultural research funding supports the science behind food safety, crop resilience, pest and disease management, and rural economic development. The extension system, which connects research to farmers and communities on the ground, depends on the same funding streams under debate.

The Bottom Line

Congress is negotiating a 2026 farm bill against a backdrop of competing pressures: an administration budget that would reduce formula funding to land-grant institutions, a House-passed bill that moves in the opposite direction on equity and infrastructure, and a persistent gap between what programs like AFRI and AGARDA are authorized to receive and what they actually get.

The central question is whether the next farm bill will maintain or restructure the balance between stable, formula-driven support for land-grant universities and competitive, peer-reviewed grants. That choice will determine not just which institutions benefit, but what kind of agricultural research the federal government is positioned to sustain over the next five years.

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