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Recalibrating the Reported Rates of Return to Food and Agricultural R&D

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  • Rao, Xudong
  • Hurley, Terrance M.
  • Pardey, Philip G.

Abstract

Prices 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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Suggested Citation

  • 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.
  • Handle: RePEc:ags:aaea12:124581
    DOI: 10.22004/ag.econ.124581
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    References listed on IDEAS

    as
    1. Julian M. Alston & Matthew A. Andersen & Jennifer S. James & Philip G. Pardey, 2011. "The Economic Returns to U.S. Public Agricultural Research," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(5), pages 1257-1277.
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    7. 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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    1. Hurley, Terrance M. & Pardey, Philip G. & Rao, Xudong, 2013. "Returns to Food and Agricultural R&D Investments Worldwide, 1958-2011," Briefs 159649, University of Minnesota, International Science and Technology Practice and Policy.
    2. Anderson, Kym & Strutt, Anna, 2014. "Impacts of Asia’s Rise on African and Latin American Trade: Projections to 2030," 2014 Conference (58th), February 4-7, 2014, Port Macquarie, Australia 165805, Australian Agricultural and Resource Economics Society.
    3. Kym Anderson & Anna Strutt, 2014. "Growth in Densely Populated Asia: Implications for Primary Product Exporters," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 1(1), pages 112-126, January.
    4. Anderson, Kym & Strutt, Anna, 2014. "Food security policy options for China: Lessons from other countries," Food Policy, Elsevier, vol. 49(P1), pages 50-58.
    5. Julian M. Alston & Philip G. Pardey, 2014. "Agriculture in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 28(1), pages 121-146, Winter.
    6. Anderson, Kym & Thennakoon, Jayanthi, 2015. "Food Prices Spikes and Poor, Small Economies: What Role for Trade Policies," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 10(1), pages 1-16, March.
    7. Dlamini, Thula Sizwe & Magingxa, Litha & Liebenberg, Frikkie, 2015. "Estimating the economic value of the national cultivar trials in South Africa: A case for sorghum, sunflower, soybeans and dry beans," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207288, Italian Association of Agricultural and Applied Economics (AIEAA).

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