Recalibrating the Reported Rates of Return to Food and Agricultural R&D
AbstractPrices of basic food staples and feed crops have soared in recent years, renewing concerns about the ability of global food supplies to meet the projected growth in aggregate demand. Notwithstanding these concerns, and apparently at odds with a vast body of economic evidence reporting exceptionally high rates of return to investments in agricultural R&D, growth in public R&D spending for food and agriculture has slowed worldwide, especially in rich countries. Left unchecked, the consequent slowdown in agricultural productivity will push many more people into hunger and undercut economic growth, especially in the many economies worldwide still heavily reliant on agriculture. The observed R&D spending behavior is consistent with a determination that the rate of return evidence is implausible. We examine this notion, recalibrate a new, comprehensive compilation of the evidence, and find in favor of a much reduced rate of return to research. Nonetheless, the scaling back of public agricultural R&D spending is not supported from this new economic view of the evidence.
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Bibliographic InfoPaper provided by University of Minnesota, Department of Applied Economics in its series Staff Papers with number 135018.
Date of creation: Sep 2012
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Agricultural and Food Policy; Research and Development/Tech Change/Emerging Technologies;
Other versions of this item:
- Rao, Xudong & Hurley, Terrance M. & Pardey, Philip G., 2012. "Recalibrating the Reported Rates of Return to Food and Agricultural R&D," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124581, Agricultural and Applied Economics Association.
- NEP-AGR-2012-10-20 (Agricultural Economics)
- NEP-ALL-2012-10-20 (All new papers)
- NEP-INO-2012-10-20 (Innovation)
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- Alston, Julian M. & Pardey, Philip G. & Ruttan, Vernon W., 2008. "Research Lags Revisited: Concepts and Evidence from U.S. Agriculture," Staff Papers 50091, University of Minnesota, Department of Applied Economics.
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