Philip G. Pardey

Agricultural Research, Productivity, and Food Prices in the Long Run

A reinvestment in agricultural R&D is critical to ensuring sufficient food for the world in the coming decades. In a recent update of earlier estimates (1), the Food and Agriculture Organization (FAO) of the United Nations reported that more than one billion people now suffer malnutrition (2). Despite declines in food prices from their 2008 highs, local prices in many developing countries are still high by recent historical standards. Long-run trends in global food commodity prices are driven by differential rates of growth in the supply and demand for food crops, feed, and livestock products.

Research Returns Redux: A Meta-Analysis Of The Returns To Agricultural R&D

A total of 289 studies of returns to agricultural R&D were compiled and these provide 1821 estimates of rates of return. After removing statistical outliers and incomplete observations, across the remaining 1128 observations the estimated annual rates of return averaged 65 per cent overall — 80 per cent for research only, 80 per cent for extension only, and 47 per cent for research and extension combined. These averages reveal little meaningful information from a large body of literature, which provides rate‐of‐return estimates that are often not directly comparable. This study was aimed at trying to account for the differences. Several features of the methods used by research evaluators matter, in particular assumptions about lag lengths and the nature of the research‐induced supply shift.

Research, productivity, and output growth in Chinese agriculture

Recent attempts to quantify the sources of growth in Chinese agriculture have attributed an exceptionally large share of this growth to the contemporary institutional and market reforms within China. To analyze this important issue we use a newly constructed panel data set that includes an agricultural research or stock-of-knowledge variable. Our results suggest that while still a significant source of growth, the direct growth promoting consequence of institutional change and market reforms have been overstated by these earlier studies. Research-induced technical change accounts for a significant share (20%) of the growth in agricultural output since 1965.

Investments in African agricultural research

Over the past three decades the development of agricultural research staff in sub-Saharan Africa has been impressive. Developments in agricultural research expenditures were less positive. Many of the developments of the past decade in personnel, expenditures, and sources of support for public-sector R&D in Africa are not sustainable. The rapid buildup of research staff is not paralleled by an equal growth in financial resources. Spending per scientist has continuously declined during the past 30 years, but most dramatically during the 1980s. Resources are spread increasingly thin over a growing group of researchers, which has negative effects on the efficiency and effectiveness of agricultural research.

Financing agricultural R&D in rich countries: what's happening and why.

Governments everywhere are trimming their support for agricultural R&D, giving greater scrutiny to the support that they do provide, and reforming the public agencies that fund, oversee, and carry out the research. This represents a break from previous patterns, which had consisted of expansion in the public funds for agricultural R&D. Private‐sector spending on agricultural research has slowed along with the growth of public spending in recent years, but the balance continues to shift towards the private sector. This article presents a quantitative review of these funding trends and the considerable institutional changes that have accompanied them. We discuss new data for 22 OECD countries, providing institutional details for five of these countries, and conclude with an assessment of policy developments.

International Productivity Patterns: Accounting for Input Quality, Infrastructure, and Research

In this paper, we present measures of land and labor productivity for a group of ninety-eight developed and developing countries using an entirely new data set with annual observations spanning the past three decades. The substantial cross-country and intertemporal variation in productivity in our sample is linked to both natural and economic factors. We extend previous work by dealing with multiple sources of systematic measurement error in conventional agricultural inputs. The mix of conventional inputs, indicators of quality of agricultural inputs, and the amount of publicly provided infrastructure are all significant in explaining observed cross-sectional differences in productivity patterns. Copyright 1997, Oxford University Press.

Causal Relationships between Public Sector Agricultural Research Expenditures and Output

Allocative decisions concerning public sector agricultural research appear to be driven by both supply and politically mediated demand forces. In-sample Granger tests, along with post-sample predictive tests, suggest that simultaneity issues should not be ignored when modeling the research expenditure-output relationship. The results also provide strong evidence that the impact of research expenditures on agricultural output may persist for as long as thirty years. These lags are substantially longer than those commonly used for agricultural research to date. The lagged effect of output on research appears to be shorter, though still between ten and twelve years.

Financing agricultural research: International investment patterns and policy perspectives

Abstract For much of the post-WWII period, governments in rich and poor countries alike have increased public spending on, and performance of, agricultural research. The public involvement in, and policies toward, agricultural research and development (R&D) have undergone a sea of change in more recent years. In this article we document these changes, focusing on the public and, rapidly evolving, private roles in financing agricultural R&D, and the international dimensions of these funding and policy issues. We restate the principles for government intervention in research, and highlight the financing aspects of these interventions, before concluding the paper with some reflections on the implications of all these changes for internationally conceived and funded public agricultural R&D.

South‐North Trade, Intellectual Property Jurisdictions, and Freedom to Operate in Agricultural Research on Staple Crops*

A biotechnology revolution is proceeding in tandem with international proliferation of intellectual property regimes and rights. Does the intellectual property impede agricultural research conducted in, or of consequence for, developing countries? This question has important spatial dimensions that link the location of production, the pattern of international trade, and the jurisdiction of intellectual property. Our main conclusion is that the current concerns about the freedom to operate in agricultural research oriented towards food crops for the developing world are exaggerated. Rights to intellectual property are confined to the jurisdictions where they are granted, and, presently, many of the intellectual property (IP) rights for biotechnologies potentially useful to developing-country agricultural producers are valid only in developed countries. IP problems might arise in technologies destined for crops grown in developing countries unencumbered by IP restrictions, if those crops are subsequently exported to countries in which IP is likely to prevail. Thus freedom to trade is also part of the IP story. However, using international production and trade data in the 15 crops critical to food security throughout the developing world, we show that exports from developing to developed countries are generally dwarfed by production and consumption in the developing world, the value of these exports is concentrated in a few crops and a few exporting countries, and the bulk of these exports go to Western Europe. Thus for now, most LDC researchers can focus primarily on domestic IPR in determining their freedom to operate with respect to food staples.

Re-examining the Reported Rates of Return to Food and Agricultural Research and Development

Hurley, Rao and Pardey (2014) analytically and empirically evaluate the internal rate of return (IRR) vis a vis the modified internal rate of return (MIRR) for investments in agricultural research and development (R&D). They find that estimates of the IRR are 2.5 to 5 times larger than the MIRR for a wide range of assumptions, leading them to question the value of the IRR as a metric to represent the rate of return to agricultural R&D. Oehmke (2016) defends the IRR by arguing that it has important properties that the MIRR does not possess. In this article, we critically examine these properties demonstrating that some are not inherent to the MIRR. For other properties, we simply disagree with Oehmke’s assessment of their desirability. Therefore, we are not compelled to change our original recommendation.