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Is Agricultural Research Still A Public Good?

Author

Listed:
  • Oehmke, James F.
  • Weatherspoon, Dave D.
  • Wolf, Christopher A.
  • Naseem, Anwar
  • Maredia, Mywish K.
  • Hightower, Amie L.

Abstract

The nature of public agricultural research changed in 1980 when the Bayh-Dole Act allowed universities to retain title to inventions that were created with Federal funds, and the court case Diamond v. Chakrabarty allowed patenting of living tissue and eventually other bio-engineered products. In 1997, over 2,300 new licenses and options were executed on academic life-sciences property. This raises the questions agricultural research still be a public good? This paper is a critical first step in understanding how increasingly private ownership of intellectual property affects the agribusiness environment and the evolving role of public agricultural research institutions. The innovative step in this paper is the development of a formal economic model which represents the role of applied biotech research in the agricultural life sciences. The model is built around neo-Schumpeterian ideas of endogenous innovation and growth. The most salient implications for the role of the public sector are(1)The private sector underinvests in applied R&D activity. (2) Concentration in the large-firm, life-science R&D industry increases over time. (3) The life-science revolution is reducing the number of markets, in the short run. This reduction in the number of niche markets diminishes the role of the public sector. (4) There is a role for the public sector in conducting R&D in niche markets. (5) In the long run, the life-science revolution may also create new niche markets. (6) There is a role for the public sector in the provision of basic research which increases the productivity of applied R&D.

Suggested Citation

  • Oehmke, James F. & Weatherspoon, Dave D. & Wolf, Christopher A. & Naseem, Anwar & Maredia, Mywish K. & Hightower, Amie L., 1999. "Is Agricultural Research Still A Public Good?," Staff Paper Series 11821, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midasp:11821
    DOI: 10.22004/ag.econ.11821
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    References listed on IDEAS

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    1. Giancarlo Moschini & Harvey Lapan, 1997. "Intellectual Property Rights and the Welfare Effects of Agricultural R&D," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1229-1242.
    2. Mingxia Zhang, 1997. "The Effects of Imperfect Competition on the Size and Distribution of Research Benefits," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1252-1265.
    3. Dinopoulos, Elias & Oehmke, James F. & Segerstrom, Paul S., 1993. "High-technology-industry trade and investment : The role of factor endowments," Journal of International Economics, Elsevier, vol. 34(1-2), pages 49-71, February.
    4. Shu-Yu Huang & Richard J. Sexton, 1996. "Measuring Returns to an Innovation in an Imperfectly Competitive Market: Application to Mechanical Harvesting of Processing Tomatoes in Taiwan," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 558-571.
    5. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    6. Segerstrom, Paul S & Anant, T C A & Dinopoulos, Elias, 1990. "A Schumpeterian Model of the Product Life Cycle," American Economic Review, American Economic Association, vol. 80(5), pages 1077-1091, December.
    7. Julian M. Alston & Richard J. Sexton & Mingxia Zhang, 1999. "Imperfect competition, functional forms, and the size and distribution of research benefits," Agricultural Economics, International Association of Agricultural Economists, vol. 21(2), pages 155-172, October.
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    Cited by:

    1. Bradford Barham & Jeremy Foltz & Kwansoo Kim, 2002. "Trends in University Ag-Biotech Patent Production," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 24(2), pages 294-308.
    2. Xia, Yin & Buccola, Steven T., 2001. "Are Basic Science And Biotechnology Complementary Activities?," 2001 Annual meeting, August 5-8, Chicago, IL 20575, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Michael J. Rizzo, 2005. "The public interest in higher education," Proceedings, Federal Reserve Bank of Cleveland, pages 19-45.
    4. Oehmke, James F. & Wolf, Christopher A. & Weatherspoon, Dave D. & Naseem, Anwar & Maredia, Mywish K. & Raper, Kellie Curry & Hightower, Amie L., 1999. "Cyclical Concentration And Biotech R&D Activity: A Neo-Schumpeterian Model," Staff Paper Series 11792, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    5. Weatherspoon, Dave D. & Oehmke, James F. & Raper, Kellie Curry, 2000. "An Era Of Confusion: The Land Grant Research Agenda And Biotechnology," Staff Paper Series 11559, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Esposti, Roberto, . "Knowledge, Technology and Innovations for a Bio-based Economy: Lessons from the Past, Challenges for the Future," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 1(3), pages 1-34.
    7. Oehmke, James F. & Wolf, Christopher A. & Weatherspoon, Dave D. & Naseem, Anwar & Maredia, Mywish K. & Raper, Kellie Curry & Hightower, Amie L., 1999. "Cyclical Concentration And Consolidation In Biotech R&D: A Neo-Schumpeterian Model," Staff Paper Series 11812, Michigan State University, Department of Agricultural, Food, and Resource Economics.

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    Keywords

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    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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