Investing in agricultural research and development

For much of this century, public and private investments in R&D have kept U.S. agricultural science and agricultural productivity on the leading edge internationally. Many of the mechanical, biological, and chemical innovations that have enhanced agricultural productivity worldwide have their origins in American agricultural research institutions. These investments have yielded high rates of social returns as high as 45 percent a year. Today, however, American agriculture's competitiveness is eroding, partly because of underinvestment in R&D. Currently, U.S. agricultural R&D expenditures total about $4.6 billion annually the equivalent of about 3 percent of the gross value of our agricultural production. Of this, private R&D constitutes about 57 percent, primarily in plant protection and nutrition and in postharvest processing and marketing research. Public investment, by comparison, concentrates more heavily in crop breeding and management as well as in livestock-related research. The United States has the greatest investment in agricultural R&D of any single country. However, world agriculture and agricultural sciences are changing rapidly. Investment growth rates in agricultural R&D in several other countries, particularly the industrialized countries, have exceeded those in the United States in recent years. Relative to the economic value of their agriculture, investments in those countries now exceeds the U.S. investment by a substantial margin. The preeminent position occupied by U.S. agricultural science in the past 50 years can no longer be taken for granted. Trends in U.S. public sector investments in agricultural R&D also give rise to concerns about the capacity of the system to sustain agricultural productivity and competitiveness into the 21st century. Beginning with the enactment of the Hatch Act, which created and provided the federal financial support for the Agricultural Experiment Stations at the land grant universities, public investment in agricultural R&D has been shared by the federal and state governments. Generally, researchers have looked to public investment, and in particular federal investment, for support of longer-range, or basic, knowledge-creating research, and to private research more for the " D part of the R&D nexus. Recently, however, adjustment for inflation shows that federal support of state agricultural research through the USDA has been stagnant. Federal support through "formula" funds actually declined by nearly 20 percent in real terms in the 1980s. Although a modest USDA competitive grants program (currently about $42 million annually) has helped to sustain more basic research in the states, it too has been stagnant. The growth in funding of special research grants through the USDA, often earmarked with respect to site and purpose, has done little to arrest declining federal support of knowledge-building, basic agriculturally related research. Fortunately, other federal agencies such as the NIH and the NSF have increased their support for research in the Agricultural Experiment Stations, preventing a precipitous decline in overall federal support of basic research.