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Producer-Funded Innovation: R&D Spillovers across Levy Programs

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  • Xiao, Zhihua

Abstract

Agricultural R&D investment is becoming an increasingly important policy issue as food prices push upwards and food security problems emerge. An important source of agricultural R&D funding is from producer check-offs, which are increasingly being used to fund applied agricultural research. Existing studies of producer-funded agricultural R&D indicate that there are high private and social rates of return to agricultural R&D investment by farmers, and thus that farmers are under investing in R&D. An important reason for underinvestment of producer-funded R&D is the spillovers across levy programs – the research benefits of one particular crop can flow to other crops via spillovers. The spillovers across levy programs are particularly important in jurisdictions, such as Canada, where agricultural R&D activity has been organized on a commodity-by-commodity basis. This study developed a theoretical model to capture farmers R&D investment decisions by explicitly specifying spillovers across levy programs.

Suggested Citation

  • Xiao, Zhihua, 2015. "Producer-Funded Innovation: R&D Spillovers across Levy Programs," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205315, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:205315
    DOI: 10.22004/ag.econ.205315
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    References listed on IDEAS

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    1. Julian M. Alston & John W. Freebairn & Jennifer S. James, 2003. "Distributional issues in check-off funded programs," Agribusiness, John Wiley & Sons, Ltd., vol. 19(3), pages 277-287.
    2. Peter Vitaliano, 1983. "Cooperative Enterprise: An Alternative Conceptual Basis for Analyzing a Complex Institution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(5), pages 1078-1083.
    3. Scott, Terry & Guzel, Alper & Furtan, Hartley & Gray, Richard, 2005. "Returns to research: Western Grains Research Foundation wheat and barley check-offs," CAIRN Publications 273144, Canadian Agricultural Innovation and Regulation Network (CAIRN).
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