Revitalizing the Slow Magic of US Agri-Food Research

Key Points

• US public investment in agri-food research and development (R&D) has lost considerable ground over the past two decades, exacerbating the shrinking US share of global agri-food R&D spending to such an extent that America now lags well behind China.
• The knowledge capital arising from public agri-food spending spurs innovation that promotes productivity and enhances the global competitiveness of US agriculture; improves the resilience of agriculture to changing climate, market, and pest pressures; and is key to reducing farming’s environmental footprint.
• Prioritizing the long-term, multifaceted benefits from public spending on agricultural R&D over doling out federal dollars to favored farms will benefit the agri-food sector, the economy in general, and the environment.

Read the PDF.

Introduction

Agri-food research and development (R&D) is slow magic.¹ Typically, it takes many years before R&D’s economic and environmental effects are first realized. Then these effects play out over long periods. Thus, just like efforts to mitigate the effects of climate change, investing in R&D is not a quick fix.

However, patience pays. There is compelling historical evidence that public investments in agri-food R&D have generated high social payoffs, and there are no signs that the returns to more recent research have diminished in any way.² If anything, increased competitive pressures; challenges farmers now face from changes in climates, markets, and agricultural pests; and growing imperatives to reduce agriculture’s environmental footprint are likely to enhance the social returns to present and future R&D.

Whether these prospective future returns will be realized hinges largely on current decisions about public spending on agricultural R&D. For almost 20 years, the US has scaled back its public commitments to agri-food R&D. If this trend continues, then US agriculture, the country’s food supply, and the climate, water, and other environmental factors that are closely intertwined with agriculture will be further compromised and put at ever-increasing risk.

As I illustrate below, it takes time before agricultural R&D has its impact on the ground. Thus, there is real urgency to redress the large funding shortfall that has accumulated over the past decades and to do that in ways that sustain the commitment to higher levels of funding so it better aligns with the longer-run realities of R&D rather than the shorter-term vagaries of political cycles. The good news is that payoffs to investments will accrue for some time, often decades. Thus, R&D spending has some permanency in the stream of payoffs that flow to society.

In many ways, R&D spending is analogous to investments in capital infrastructure. Agricultural R&D spending creates a stock of knowledge capital—or, in concrete terms, an accumulation of useful new ideas embodied in professional publications, patents, and tacit technical and scientific know-how—that drives agricultural innovation and the subsequent stream of benefits.

Read the full report.

Notes

1. Philip G. Pardey and Nienke M. Beintema, Slow Magic: Agricultural R&D a Century After Mendel, International Food Policy Research Institute, October 26, 2001, https://pdf.usaid.gov/pdf_docs/Pnacn063.pdf; and J. M. Alston et al., “The Slow Magic of Investments in Innovation: Insights from Agricultural vs Industrial R&D Models,” Annual Review of Resource Economics (forthcoming).
2. Xudong Rao, Terrance M. Hurley, and Philip G. Pardey, “Are Agricultural R&D Returns Declining and Development Dependent?,” World Development 122 (October 2019): 27–37, https://experts.umn.edu/en/publications/are-agricultural-rampd-returns-declining-and-development-dependen.