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Lumpkin, T.A., B.B. Dean, and D.A. O'Rourke. 1993. IMPACT and the East Asian Crop Development Program. p. 122-126. In: J. Janick and J.E. Simon (eds.), New crops. Wiley, New York.

IMPACT and the East Asian Crop Development Program

Thomas A. Lumpkin, Bill B. Dean, and Desmond A. O'Rourke


  1. HISTORY OF THE IMPACT CENTER
  2. FUNDING
    1. Uses of State Funds
    2. Uses of Federal Matching Funds
    3. Uses of Other Funds
    4. Challenges
    5. Specific Approaches to Alternative Crops
  3. THE EAST ASIAN CROP DEVELOPMENT PROGRAM
  4. CONCLUSION
  5. REFERENCES
  6. Table 1
  7. Fig. 1

Traditional crops have become less profitable over the last two decades forcing the Washington State agricultural industry to search for alternatives. Appropriate alternatives could allow innovators to improve their economic situation and position themselves favorably for the future. Washington State is on the Pacific Rim, close to the rapidly growing and industrializing Asian countries such as Japan, which are markets for a wide range of products not familiar to Washington State producers. Washington State University (WSU) has established an international marketing center to assist our producers in the development and export of agricultural products to these markets.

HISTORY OF THE IMPACT CENTER

The origin of the International Marketing Program for Agricultural Commodities and Trade (IMPACT) Center can be traced to early 1983, when James Ozbun, the previous Dean of the College of Agriculture and Home Economics at WSU, set up a committee to examine a possible international marketing institute. This idea was inspired by Ozbun's earlier visit to the Food and Feed Grain Institute (FFGI) in Kansas. The envisioned institute was to incorporate many of FFGI's features and apply them to a broader spectrum of ideas. The President of WSU and the University Provost requested an initial budget of $49,500 from the state legislature, which was approved in March, 1984, and matched by WSU. This money was provided on a provisional basis to test the concept of the IMPACT Center. In 1985, the IMPACT Center was finally established within the University based on an October 1, 1985 amendment to the federal National Agricultural Research, Extension, and Teaching Policy Act of 1977, which provided the legislative basis for this action. From the 1988 fiscal year until this year, IMPACT has been receiving federal matching funds.

IMPACT is a separate administrative unit of the College of Agriculture and Home Economics at WSU (Fig. 1) in Pullman, Washington (affiliated scientists are also located at other sites in the state, and over-seas in export markets), and is devoted to studies that ultimately assist in the export marketing of agricultural commodities (Day 1985; Steury 1990; Tacoma 1987; USDA 1990). IMPACT is also responsible for assembling, analyzing, and disseminating relevant market information to producers, producer associations, commodity commissions, processors, packers, shippers, brokers, transporters, financiers, and other agencies engaged in the marketing of Washington State's agricultural products.

IMPACT supports teams of scientists to address problems in the export marketing of agricultural products. This approach utilizes WSU's collective knowledge and capacity for research and extension. IMPACT's guidance and funding allow university scientists to concentrate on problems without being subject to short-term time and profit constraints faced by individual firms. Thus, the IMPACT Center has become a hub for innovative scientific research and information that promotes Washington State's agricultural exports. This comprehensive and systematic approach is not available to the state's agricultural industry from any other source.

Washington's legislature intended for the IMPACT Center to be problem oriented and able to rapidly respond to issues arising in international markets. However, in order to solve such problems, some fundamental or basic research has been required before applying the solution or application. IMPACT has attempted to keep a balance by funding projects that provide rapid results as the state legislature envisioned and those projects requiring longer research periods which may eventually yield greater net benefits to the state.

FUNDING

IMPACT obtains funds from state, federal, and private industry (O'Rourke 1989) (Table 1). State funds support functions such as basic staffing, attendance at trade shows, and development of curricula. Federal funds matched with state funds are used to pay for research projects selected by the IMPACT Review Committee. In addition, researchers may receive financial assistance from commodity groups and private sources.

IMPACT uses federal and state funds to support research on a range of large and small commodities and new products. Federal grants and private contributions are occasionally obtained for specific projects which are not funded by IMPACT.

Uses of State Funds

State funds are allocated for permanent faculty in the departments of Agricultural Economics, Food Science and Human Nutrition, Horticulture, and core staff; an annual grant to the College of Business and Home Economics for the development of curricula related to international agricultural marketing; an annual grant to the Wood Materials and Engineering Laboratory of the College of Engineering for attending and sponsoring seminars, and participating in trade shows; and limited funding to competitively bid projects.

Uses of Federal Matching Funds

Federal requirements state that funds be used for agricultural research and that an equal (matching) amount be obtained from non-federal sources. Non-federal sources include contributions made by the state, private companies, and agricultural groups. Federal grants for individual research projects do not count toward matching funds. IMPACT has used virtually all federal matching funds for competitively bid projects. However, because of a change in federal policy, beginning FY 1992, all matching funds are to be terminated, and replaced by special allocations.

Uses of Other Funds

Other funds are obtained from private industry (domestic and foreign), agricultural groups, and federal grants other than federal matching funds. All funds generated in the other category are earmarked for specific projects as specified by the contributors. In many instances, these funds are contributed because the donors support specific IMPACT projects. Occasionally other funds support projects which are not selected by the IMPACT review board. For example, IMPACT is currently conducting research on potato black spot bruising which is being financed by the potato industry.

Commodity Commissions and the USDA/ARS support research on large scale crops. IMPACT balances these activities and projects by funding research on smaller crops. Alternative crops research is also financed by state and federal funds. Maintaining a balance between the international competitiveness of Washington State's large exporters and developing new products for market niches is a goal of IMPACT. Less-established and alternative crop groups must rely heavily on state and federal funding, and cooperation and financial support from foreign market representatives.

Challenges

In it's sixth year, IMPACT has increasingly focused on major challenges which compliment WSU's scientific talents, as well as those which benefit the agricultural and forest products of Washington. These challenges include: (1) determining worldwide market opportunities for Washington's agricultural products; (2) improving the competitiveness of Washington's agricultural products in yield, quality, price, and service; (3) solving specific technical problems faced by Washington's agricultural exporters; (4) developing nondestructive tests for quality; (5) developing new products or processes; and (6) putting scientific findings to work in real world marketing situations.

Since IMPACT's establishment in 1985, studies funded through IMPACT have revealed information that has increased our understanding of world markets (Cook and Kullberg 1986; McClary et al. 1989), changing consumer tastes in Japan (Jussaume 1989), Asian quality preferences, and improved marketing strategies. Information collected and generated by the IMPACT center enhances agricultural market opportunities for Washington, as well as reducing risks for certain agricultural products in a rapidly diversifying and integrated international market. IMPACT's challenges can be illustrated by it's effort to develop new products to meet opportunities arising from access to the world's consumers. Many opportunities exist for research and development of new specialized agricultural products, and major priority is given to new products and processes that are likely to generate additional exports. Japanese markets exist for products such as wagyu beef, chicory for artificial sugar production (Dean 1990), edamame vegetable soybeans, and azuki beans. These commodities are currently being tested at WSU for marketing in Asia and in the United States. Development of these commodities requires specialized expertise in agricultural, social and cultural aspects of international trade in addition to agroeconomic knowledge.

Specific Approaches to Alternative Crops

Traditional crops grown in Washington State, face declining prices and over-capacity. Major commodities like apples, wheat, and potatoes have seen production grow and prices decline over the last twenty years. High value new crops have the potential to displace some of these traditional crops. When high value new crops are shipped to export markets they are more likely to contribute to the profitability of the agricultural economy rather than just substituting one low value crop for another.

Previous efforts to commercialize many alternative crops have failed for a number of reasons. In 1987, the IMPACT Center organized a conference, to examine previous attempts at developing alternative crops in Washington State over the previous fifty years. Conclusions from the conference indicated that most efforts failed because of a lack of an integrated effort. In some cases crops failed because of inadequate processing facilities. In other cases crops failed because a market did not exist, or from the unwillingness of growers to commit the needed hectarage. Many potential crops, such as sunflower, failed because they could not yield profitably under local conditions. A major exception in the last fifty years has been the Washington wine industry, which after thirty years of ineffective growth, put together an integrated effort combining research, extension, government regulation and industry support to achieve the development of a successful industry.

THE EAST ASIAN CROP DEVELOPMENT PROGRAM

The IMPACT Center has been using federal matching funds to support the study of alternative crops via the East Asian Crop Development Program in the Department of Crop and Soil Sciences (Fig. 1). Initial successes have been achieved by this program in the development of azuki beans and edamame soybeans (discussed in detail in a companion paper), although several agronomic and processing problems restrain full development until new varieties and processes are approved for release. These products have a ready market as raw commodities in Asia, and have the potential for added value in processing.

The three part approach of the East Asian Crop Development Program is: (1) identification of East Asian alternative crops for the domestic and export market; (2) comprehensive coordination of efforts to commercialize these alternative crops from the planting of its seed to final consumption; and (3) formulation of a generalized model for development and commercialization of alternative crops.

This generalized approach has numerous sequential but overlapping stages. The early stages involve studying the import statistics of targeted countries. A list of imported agronomic commodities is developed and a cursory analysis is made for their potential production in the state based on environmental considerations. Next, sample cultivars of potential crops are located, grown in an East Asian observation garden, and a simple review of Washington State, national, and international research publications is undertaken. If a new crop grows well in the garden, simple yield plots are established and basic production, processing and marketing requirements are established. When yield is found to be reasonable and constraints not prohibitive, a graduate student is assigned to the crop. Next, an exhaustive effort is made to select cultivars, collect research literature, and identify cooperating producers, processors, marketers, and a multi-disciplinary research team. At this stage, the graduate student, cooperators, and the research team undergo an intensive process of education on all aspects of the crop via literature review, observation plot results, test processing, and visits to the Asian market. In addition, the graduate student is placed on the farm of an Asian producer for the growing season and/or at an Asian university or research institute that studies the crop. As a prerequisite, graduate students are selected for interest in Asia and trained in an Asian language and culture. These students tend to be highly motivated older students. As graduates, they are viewed as a form of technology transfer from the program to the state's agricultural industry.

At any stage in this process, efforts on a selected crop can be terminated if commercial production seems impossible or requiring an excessive investment in time or research support. If the crop shows promise, a package of management practices is established, an internal bulletin of production guidelines is prepared and training workshops are provided to producers. Also, foreign importers are provided samples of various cultivars for quality and taste testing. The research team is provided feed-back from producers, test trials and importers, and sub-groups are assigned to overcome identified constraining factors. If the team and cooperators feel comfortable with agronomic progress, preliminary studies on processing are undertaken. Since the ultimate goal of the IMPACT center is to generate revenue in the State and create jobs, adding value through processing is a high priority. Concurrent with processing efforts, breeding, commercial scale-up and test marketing are undertaken.

The East Asian Crop Development program is involved in the coordination of research and marketing activities, in addition to education and promotion. At the point of commercialization, the director must occasionally convene and mediate negotiations between cooperating producers, processors, and importers on prices and responsibilities. An understanding of cultural and political sensitivities is crucial at this stage. Once full commercialization occurs, a commodity commission can be established to takeover many of IMPACTS' responsibilities for further development of the crop.

CONCLUSION

The success of the IMPACT Center, the East Asian Crop Development Program, and other institutes such as the Center for Alternative Plant and Animal Products at the University of Minnesota, suggest that they can serve as models for the creation of similar institutions in other states and at the national level. Success of these efforts has come from their comprehensive approach, their ability to understand and serve the needs of the consumer (Steury 1990), and to bridge the gap between academics and business. Success has also come from the recognition of regional strengths and weakness, especially, for Washington, the opportunities in Asia that lie hidden because of cultural differences. The comprehensive system developed by the East Asian Crop Development Program for identification, evaluation, development, and promotion of new East Asian crops has many useful features for other alternative product programs, especially its use of graduate students. This system is successfully producing and marketing new crops within the United States and to Asia, where other less comprehensive approaches have failed.

REFERENCES


Table 1. IMPACT Center's sources of funding, 1985-86 and 1990-91.

Funding ($)
Year State match Federal Otherz Total Non-state (%)
1985-86 549,500 0 228,800 778,300 29.4
1990-91 596,500 522,705 550,000 1,699,205 64.9
zOther funds include grants from federal and private sources, as well as contributions from producer organizations and domestic and foreign businesses.


Fig. 1. Flow chart of financial or legal authority and advisory relationships for the IMPACT Center and the East Asian Crop Development Program.


Last update September 9, 1997 aw