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MSU Ag Summit (Nov 10 2016)

published by Anton Bekkerman

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AG R&D INVESTMENT
A CONSISTENTLY VALUE-ADDING VENTURE
More people + More money Greater need for food
The Great Food Challenge
HOW HAS
The U.S. Agricultural Industry
RESPONDED?
In Brief: Food in the U.S. is More Affordable than Ever
The U.S. Agribusiness Sector
Largest agribusiness sector in the world
Largest part of U.S. economy
Biggest user of biotech
Safest and lowest cost food in the world
Largest selection of food
11,000+ new foods annually
Why the Biggest and Best?
Came from U.S. Private Sector (1994-2010)
Who Funds Ag R&D?
Globally, 1 in 3 dollars for Ag R&D
Source: USDA ERS
Source: USDA ERS
Less land, Less labor...
Source: USDA ERS
...More output
U.S. Ag Output Increased by Nearly 300%
By the Numbers
Analysis of 289 studies on ag R&D returns—
Average return on investment:  44.3%
(Long-term average IRR in U.S. stock market: 7%)
Represents annual internal rate of returns of 9.0–10.5%
Spatial knowledge spillovers from  ag research centers:
Shown to increase R&D benefits by 45%
Made for the Short and Long Run
R&D impacts visible as soon as 2 years
Returns shown to last as long as 30 years
Private R&D: higher short-run ROI
Public R&D: higher long-run ROI
Robust, repeated evidence that returns to R&D have not fallen over time
BUT:
Perpetual challenge is to continue these successes
Persistent underinvestment in agricultural R&D, despite proven high rates of return
Challenges to Continued Growth
Overall, public investment in agricultural R&D has been reduced over time
Public investments in agricultural R&D have increasingly become re-directed away from farm productivity research
Anton Bekkerman
[email protected] 406-994-3032 http://www.antonbekkerman.com
Literature Cited
Alston, J., et al. 2000. "Research returns redux: a meta-analysis of the returns to agricultural R&D." Aust. J. Ag. Res. Econ.
Evenson, R. 2001. "Economic impacts of agricultural research and extension." Handbook of Ag. Econ.
Fuglie, K., P. Heisey. 2007. "Economic Returns to Public Agricultural Research." Econ Brief 10. USDA ERS.
Alston, J., J. Bedow, P. Pardey. 2009. "Agricultural research, productivity, and food prices in the long run." Science.
Pardey, P., B. Craig. "Causal relationships between public sector agricultural research expenditures and output." Am. J. Ag. Econ.
Pardey, P. J. Alston, R. Piggott, Eds., 2006."Agricultural R&D in the Developing World: Too Little, Too Late?" International Food Policy Research Institute, Washington, DC.