Status of Public Funding of Agricultural Research
A leading reason that growth in global food production has met the growing world food demand is the growth in agricultural productivity; i.e., investments in agricultural research and development (R&D) have resulted in the production of the new knowledge, products, and technologies that have promoted increased agricultural productivity.
Historically, the public sector (Land Grant Universities [LGU] and State Agricultural Experiment Stations [SAES]) has been dominant in the conduct of research and development that produced products/results used by agriculture. However, according to an article titled “U.S. Agricultural R&D in an Era of Falling Public Funding” by Clancy, Fuglie, and Heisey of USDA’s Economic Research Service [ERS], that is changing. The below points were compiled using information contained in that article.
• Between 1970 and 2008, the public sector conducted about 50% of the food and agricultural R&D in the US. By 2013, that share had fallen to under 30% due to declining public spending and increasing private sector spending on agricultural R&D.
• In countries with substantial public sector spending on agricultural R&D between 1990 and 2006, the US led with 20-23% of the global total; by 2013, the US share had fallen to 13%. This resulted from a combination of declining US public spending and increased public spending in developing countries.
• Agricultural output in the US grew by 169% between 1948 and 2013, and this was due to innovations in animal and plant breeding, nutrient use, pest management, and improved farming practices that resulted from agricultural R&D.
• Of the $16.3 billion spent on agricultural R&D in the US in 2013, the Federal Government portion ($2.8 billion) accounted for 17.2%, the States’ (LGU’s and SAES’s) portion ($1.0 billion) accounted for 6.1%, and the private sector portion ($12.4 billion) accounted for 76.3%.
• Private sector R&D has tended to focus on commercially useful applications that provide a return on investment. When private agricultural research entities cannot recoup their R&D investments by charging for an innovation, there is little or no incentive to conduct this R&D. Thus, the public sector is left with the task of conducting fundamental agricultural R&D research that cannot be turned into profit in the short-term. This means that the public sector (which does not have to recoup R&D costs) can complement private sector R&D by providing innovations that may not otherwise have been developed because of prohibitive upfront costs; i.e., public agricultural R&D can stimulate/support private R&D.
• The extension of intellectual property (IP) rights/protection to crop varieties (e.g. soybean) gave private seed companies the incentive to breed and release improved crop varieties in addition to their already heavy involvement in the hybrid seed (e.g. corn) business. This started the curtailing/closing of public breeding programs for these crops (e.g., again soybean).
• In addition to IP protection, the private sector has capitalized on developing and using genetically modified (GM) crop traits in new varieties, developing new agricultural pesticides, and developing and using new techniques for conventional breeding. In crop research, the public and private sectors spend roughly equal amounts on R&D, with private R&D being allocated mainly to crop breeding and biotechnology, and chemical pesticides.
Below are points that can be inferred from the above points.
• Transforming advances in fundamental sciences from public institutions into commercial opportunities for the private sector will require close collaboration between the two.
• Public R&D resources are allocated to socially important issues such as environmental quality, natural resources, economics, and statistics for which there is little financial incentive for private sector R&D. These issues are fundamentally important for the continued advancements in agricultural productivity and the sustainability of US crop production.
• The majority of private-sector plant breeders concentrate on cultivar development, whereas public-sector breeders/geneticists concentrate on germplasm enhancement and basic plant breeding research. Commodities such as soybean with higher levels of public basic research are associated with greater private R&D research that results in improved cultivar development.
• Private companies’ increased spending and increased proportion of spending (vs. the public sector) on agricultural R&D means that private sector R&D is now a significant competitor with the public sector for scientific talent.
There is no doubt that private companies’ soybean variety development programs have been of great benefit to soybean producers. Their releasing varieties with enhanced and desirable agronomic and GM traits has allowed producers to reduce pesticide applications and obtain increasing yield over the last two decades.
Regrettably, private companies devote relatively fewer resources to agronomic research and development except as it pertains to the evaluation of their new variety releases and crop protection products. This then means that agronomic R&D activities are left to public sector scientists and specialists. This also means that public sector scientists must do this work with public dollars; as these public dollars have declined, commodity group dollars have become significant funding sources for scientists in the public sector to continue to conduct this vital agronomic research.
Declining public dollars spent on agricultural R&D activities will affect the dissemination of results from public-funded research. Since each LGU’s Extension Service is tasked with providing client producers with information gleaned from both public and private research, cuts in public funding of this branch of the LGU’s will necessarily reduce the flow of new information gained from both public and private research projects. Thus, reduced public funding will deliver a blow to not only research capability at the LGU’s, but also to their capability of delivering research-based technology to the end-user. And this can be considered even more important since results from public-funded research are of no value if those results are not disseminated to the client base.
Along this same line is this point; private companies often link their information dissemination to how it may be connected to one or more of their products. Thus, the producer client may not be getting an unbiased presentation of an important agronomic concept if there is the appearance that concept is somehow tied to only that company’s product. That is why publicly funded agricultural research and information dissemination is so important to producers; i.e., these activities provide [or should provide] producer clients with more than one option [if available] for how to get the most benefit from recently developed technology.
It is doubtful that an increasingly urban US population will pay any attention to the points in this article, especially since so much public attention is being directed towards organic and non-GM food products. However, the products/innovations derived from scientifically-based agricultural R&D conducted by both the public and private sectors will be required to provide the increasing amount of agricultural products needed to support an increasing global population.
Other resources pertaining to the above subject are “The Growing Role of the Private Sector in Agricultural Research and Development World-wide” by Fuglie, and “The Evolving Institutional Structure of Public and Private Agricultural Research” by Fuglie and Toole.
Composed by Larry G. Heatherly, Nov. 2017, larryheatherly@bellsouth.net