The Productivity of Agricultural Research and Extension Expenditures in the Southeast

With current high food prices and increasing talk about a world food crisis, there is renewed interest in production agriculture and in the allocation of resources to agriculture. It would seem, therefore, that estimates of agricultural production functions and their associated marginal products would be useful to those responsible for resource allocation to the agricultural sector. This paper intended to give policymakers information on which to base decisions relative to the impact of investments in agricultural research and extension activities. The level of appropriations to such activities can be considered a proxy measure of technology. Most researchers familiar with this area feel that the total effect of new technology on production does not occur at one momemt in time, but may be spread over a number or years. Considering this, a distributed lag on research and extension expenditures was incorporated into the production function estimated in this paper.