October 10, 2014

Losing the Plot? Agricultural Research Policy and the 2014 Farm Bill

This post originally appeared on Choices Magazine.

By Philip G. Pardey, Jason M. Beddow, and Steven T. Buccola

A large part of U.S. agricultural output and its competiveness in international commodity markets is attributable to research-induced gains in productivity accumulated over the 20th century. In 2012, the United States accounted for a sizable share (9.5% by value) of the global food, feed, and fiber economy. This is substantially smaller than its 1961 share of 14.8% (United Nation’s Food and Agriculture Organization (FAO), 2014). Over the same period, the Asia-Pacific region (including India and China) grew its global share from 24.2% to 45.1%. Productivity growth in U.S. agriculture has declined along with its global market share. For the post-World War II period through 1990, agricultural productivity—measured by accounting for changes in the use of multiple factors of production—grew on average by 2.1% per year, but dropped to almost half that rate (1.2% per year) during the subsequent two decades (Pardey, Alston, and Chan-Kang, 2013).

As the 21st century unfolds, a question of major importance is whether a continuation of contemporary trends in public investments in research and development (R&D) are sufficient to preserve or enhance past productivity gains and ensure the United States remains competitive in global agricultural markets (Alston et al., 2010, especially chapter 11). While the links between R&D investments and changes in productivity are difficult to disentangle, there is compelling evidence that these investments continue to yield relatively large social dividends (Hurley, Rao, and Pardey, 2014), but with several major, and politically crippling, caveats. The lags between investing in R&D and realizing returns on those investments are long (often spanning decades), and the benefits are diffuse, accruing to a broad range of producers and consumers, and not limited to any particular political jurisdiction or constituency. It is, therefore, harder for politicians to reap short-term electoral benefits by acting in a far-sighted fashion for the country’s long-run economic and environmental gains. Nevertheless, decisions taken now will have potentially profound consequences for U.S. and global agriculture at least through the middle of this century.

So how have political commitments to the public investments in R&D that affect the food and agricultural sectors fared of late? Are the institutional arrangements for funding and performing public agricultural R&D evolving in ways that will lead to a robust future for U.S. agriculture?  Are the investment and institutional changes envisaged in the 2014 Farm Bill sufficient in light of substantive shifts in the roles of public versus private R&D within the United States, and the position of the United States in global innovation markets for food and agriculture? 

Read the full story on Choices Magazine >


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