Agriculture Depends on Research and Technology Development
Virtually all growth in U.S. agriculture comes from raising
productivity of existing resources rather than from bringing new
resources into production. As a result, growth in agriculture is
highly dependent on R&D spending, which is the primary driver
of productivity improvement over the long term. The agricultural
R&D system in the United States is a Federal, State, and
private- sector partnership, with each sector providing unique and
essential inputs for agricultural innovation. Public-sector funding
in particular provides the advances in basic scientific research
that, in turn, create new technological opportunities for private
R&D to commercialize. Federal support for agricultural research
underpins the whole system, and any decline in Federal agricultural
R&D spending is likely to see similar reductions in State and
private agricultural R&D spending eventually.
Over the past 40 years, agricultural R&D has increased, and
funding now totals about $11 billion per year. Historically, public
institutions played a direct role in developing new technologies
and encouraging their commercialization and adoption by farmers.
Advances in the biological sciences, beginning with hybridization
in the 1930s, and expanded intellectual property rights protection
have stimulated private sector efforts in R&D. These now exceed
R&D investments by the public sector, although private sector
funding has been more variable. Since about 1980, public sector
agricultural research funding has been stagnant for long periods of
time.
Multiple Institutions Operate in a Complex System
Agriculture has benefited from a unique Federal-State
agricultural research and extension system, with a history of
collaboration with the private sector. The private sector provides
most of the funding for agricultural R&D, followed by the
Federal Government and the States. But the mix of research
institutions that actually perform agricultural R&D differs
slightly from the sources of funding. Federal-level research,
funded at about $1.4 billion in 2007, generally addresses issues of
national importance. State-level research received $3.8 billion in
2007 and may be regionally applicable, though research at academic
institutions may be broad in scope. Private sector research is
nearest to the marketplace, and the private sector performs
most of this research--$6 billion in 2007. The system is
characterized by numerous linkages between institutions. For
instance, State-level institutions receive funds from several
Federal agencies other than USDA, and USDA funds State-level
institutions through a variety of instruments. The private sector
and USDA exchange funds or conduct joint research through
cooperative agreements, contracts, and trusts.
Private and Public R&D Emphases Differ, Despite Some
Overlap
Although broad private and public R&D themes overlap
somewhat, in many ways public and private research are
complementary rather than competitive. Little incentive exists for
private firms to pursue public goods research because the results
benefit society as a whole, rather than the specific innovator.
Thus, the private sector focuses mainly on R&D related to
marketable goods. Advances in biology, microbiology, and computing
created new technological opportunities for private companies. For
example, gene transfer technologies enable researchers to tailor
crops for specific uses, such as resistance to disease, pests,
herbicides, or harsh environmental conditions.
The change in focus and increase in intensity of private sector
R&D allows public-sector science to devote more of its
resources to fundamental agricultural research and to research with
public good characteristics, such as environmental protection and
nutrition and food safety. Public research generally operates on a
longer time frame as well, which allows it to address problems with
little probability of short-term payoff.