Doubling R&D funding is essential to prevent food insecurity.
Smith & Pardey 23 (Vincent H. Smith is a nonresident senior fellow and the director of agricultural policy studies at the American Enterprise Institute (AEI). He is also professor emeritus at Montana State University, where he was professor of economics in the Department of Agricultural Economics and Economics. Philip Pardey is Director of the GEMS Informatics Center for the College of Food, Agriculture and Natural Resource Sciences (CFANS), a joint venture led by CFANS and Research Computing (Minnesota Supercomputing Institute and USpatial). His research deals with the finance and conduct of R&D globally, methods for assessing the economic impacts of research, and the economic and policy (especially intellectual property) aspects of genetic resources and the biosciences., 9-7-2023, "American Farmers Urgently Need New Technology to Keep Food on the World’s Table", American Enterprise Institute - AEI, https://www.aei.org/op-eds/american-farmers-urgently-need-new-technology-to-keep-food-on-the-worlds-table/)
There has always been a broad consensus among economists that investments in research and development (R&D) fuel the engine of economic growth. This consensus is based on the findings of on the role of R&D on productivity. This is especially true for the food and agricultural sectors—particularly for public R&D funding targeted to .
Why is public sector funding needed? Because farming is a highly competitive industry in which single-farm businesses cannot usually fund adequately, or capture the full benefits of investing in their own R&D.
For example, hundreds of thousands of U.S. farms plant corn, soybeans, wheat and raise livestock. Thousands more farms produce apples, oranges and other fruits and vegetables. Those farm businesses all benefit from new technologies and processes that flow from public R&D investments. Consumers benefit from less-costly and higher-quality food, and an improved environment. , the R&D done by private-sector agribusinesses that serve farmers relies heavily on the more basic R&D done by public researchers and also complements public research know-how and findings.
Yet public funding for agricultural research in the U.S. is lower now than it was in the mid-1970s, when America’s Gross Domestic Product and average family incomes were . An important reason for the decline is that, for at least the past three decades, when push comes to shove, many farm lobbies have urged legislators to divert more federal dollars in direct annual subsidies to their members instead of R&D.
According to the most recent available data, federal R&D spending was in 2019 than at its peak in the early 2000s. The U.S. now faces an urgent agricultural productivity crisis, with important and potentially catastrophic implications for the country’s agriculture, agricultural and food exports, and food supply chains both in the U.S. and globally.
As public R&D investments diminished after 2003, the annual productivity growth rate for the farming sector slowed sharply. Worse, today there is a real danger that productivity growth will turn negative. The reason: to provide farmers with the knowledge, technologies and other tools they will need to address the impacts of climate change, cope with new pest and disease infestations, and other .
Given these stark realities, the highest funding priority for U.S. legislators, regardless of party affiliation, should be to substantially increase federal investments in agricultural R&D in the 2023 Farm Bill. Recent estimates indicate that to prevent a decline in productivity (for example, lower crop yields and new animal diseases) Congress should at least double federal agricultural R&D funding to about $5 billion a year. That would require , which is less than the to manage a heavily subsidized federal crop-insurance program.
Why should Americans care? Why should legislators act? There are at least three major reasons:
1. Climate change: Overwhelmingly, studies have found that increasing crop or animal yields (and farm productivity more generally) is the most effective way of mitigating the sector’s greenhouse gas emissions. Crucially, higher yields reduce the need to bring new land into production, which is the agriculture sector’s largest source of additional GHG emissions. Furthermore, public R&D investments focused on those objectives also encourage private firms to make related investments to bring new technologies to market.
2. R&D investments generate substantial returns to the U.S. economy: Increased productivity and are just two of the biggest payoffs. In contrast, direct farm-subsidy programs, including federal crop insurance, have . Moreover, most of those payments go to the largest and most financially successful U.S. farms.
3. Federal R&D investments are essential to ensure U.S. agriculture is highly productive and globally competitive: Absent substantial increases in public R&D investments, the path for U.S. agriculture is grim in terms of the sector’s productivity, global competitiveness, net export contributions to the country’s balance of trade, and the resilience of U.S. food supply-chains to new and unpredictable crop and livestock production shocks.