Abstract
AbstractThis article reviews the current debate on whether U.S. agricultural productivity growth is slowing. It also assesses recent research on how productivity is related to long-term investment in research and development (R&D). It describes significant changes taking place in the U.S. agricultural research system, including the growing role of private agribusiness as a main developer of new agricultural technologies and what this implies for agricultural science policy. The conclusion has suggestions for future research on these issues.
Highlights
Agricultural economics research on sources of growth in U.S agriculture agrees on two salient points: (1) most growth in output over the past 70 years has come from productivity rather than factor accumulation, and (2) public investment in agricultural research and development (R&D) is responsible for a dominant share of that productivity improvement
If we extend the horizon to 35 years, even though no benefits occur after year 30, the modified internal rate of return (MIRR) falls to 16%
It has been difficult to extract a clear signal on this question from the noise in indexes of total factor productivity (TFP) that arise from the effects of nature and measurement error
Summary
Wang et al, 2015). There is less consensus, on a number of material issues. We review trends in U.S agricultural total factor productivity (TFP) using quality-adjusted, superlative indices of outputs and inputs constructed by the U.S Department of Agriculture’s Economic Research Service (USDA-ERS) (see Wang et al, 2015) and the University of Minnesota’s International Science and Technology Practice and Policy (InSTePP) (as described in Alston, Beddow, and Pardey, 2009). Spending on agricultural R&D by federal and state governments, which rose rapidly throughout most of the 20th century, slackened after around 1980 and has declined in real terms since 2002 Complicating this picture, is a phenomenal rise in agricultural R&D investment by the business sector, especially in the crop seed and biotechnology industry (Clancy, Fuglie, and Heisey, 2016; Pardey et al, 2016). The final section of the article has some suggestions for future research directions on the economics of the U.S agricultural innovation system
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