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Public Agricultural Research Spending and Future U.S. Agricultural Productivity Growth: Scenarios for 2010-2050

Author

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  • Heisey, Paul W.
  • Wang, Sun Ling
  • Fuglie, Keith O.

Abstract

• By 2050, global agricultural demand is projected to grow by 70-100 percent due to population growth, energy demands, and higher incomes in developing countries. Meeting this demand from existing agricultural resources will require raising global agricultural total factor productivity (TFP)1 by a similar level. Maintaining the U.S. contribution to global food supply would also require a similar rise in U.S. agricultural TFP. • TFP growth in U.S. agriculture is predicated on long-term investments in public agricultural research and development (R&D). Productivity growth also springs from agricultural extension, farmer education, rural infrastructure, private agricultural R&D, and technology transfers, but the force of these factors is compounded by public agricultural research. • The rate of TFP growth (and therefore output growth) of U.S. agriculture has averaged about 1.5 percent annually over the past 50 years. Stagnant (inflation-adjusted) funding for public agricultural research since the 1980s may be causing agricultural TFP growth to slow down, although statistical analyses of productivity growth trends are inconclusive. • ERS simulations indicate that if U.S. public agricultural R&D spending remains constant (in nominal terms) until 2050, the annual rate of agricultural TFP growth will fall to under 0.75 percent and U.S. agricultural output will increase by only 40 percent by 2050. Under this scenario, raising output beyond this level would require bringing more land, labor, capital, materials, and other resources into production. • Additional public agricultural R&D spending would raise U.S. agricultural productivity and output growth. Raising R&D spending by 3.73 percent annually (offsetting the historical rate of inflation in research costs) would increase U.S. agricultural output by 73 percent by 2050. Raising R&D spending by 4.73 percent per year (1-percent annual growth in inflation-adjusted spending) would increase output by 83 percent by 2050.

Suggested Citation

  • Heisey, Paul W. & Wang, Sun Ling & Fuglie, Keith O., 2011. "Public Agricultural Research Spending and Future U.S. Agricultural Productivity Growth: Scenarios for 2010-2050," Economic Brief 138919, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uerseb:138919
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    File URL: http://purl.umn.edu/138919
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    References listed on IDEAS

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    1. V. Eldon Ball & Jean‐Pierre Butault & Carlos San Juan & Ricardo Mora, 2010. "Productivity and international competitiveness of agriculture in the European Union and the United States," Agricultural Economics, International Association of Agricultural Economists, vol. 41(6), pages 611-627, November.
    2. Fuglie, Keith O. & Walker, Thomas S., 2001. "Economic Incentives And Resource Allocation In U.S. Public And Private Plant Breeding," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 33(03), December.
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    Cited by:

    1. Jin, Yu & Huffman, Wallace E., 2013. "Reduced U.S. Funding of Public Agricultural Research and Extension Risks Lowering Future Agricultural Productivity Growth Prospects," Staff General Research Papers Archive 36796, Iowa State University, Department of Economics.
    2. King, John L. & Toole, Andrew A. & Fuglie, Keith O., 2012. "The Complementary Roles of the Public and Private Sectors in U.S. Agricultural Research and Development," Economic Brief 138925, United States Department of Agriculture, Economic Research Service.
    3. Yu Jin & Wallace E. Huffman, 2016. "Measuring public agricultural research and extension and estimating their impacts on agricultural productivity: new insights from U.S. evidence," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 15-31, January.
    4. Yang, Sansi & Shumway, C. Richard, 2015. "Asset Fixity under State-Contingent Production Uncertainty," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205256, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    5. Baldos, Uris Lantz C. & Viens, Frederi G. & Hertel, Thomas W. & Fuglie, Keith O., 2015. "On the linkages in U.S. public R&D spending, knowledge capital and agricultural productivity growth: A Bayesian approach," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205745, Agricultural and Applied Economics Association;Western Agricultural Economics Association.

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    Keywords

    Productivity Analysis; Public Economics;

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