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Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide


  • Fuglie, Keith O.
  • Heisey, Paul W.
  • King, John L.
  • Day-Rubenstein, Kelly A.
  • Schimmelpfennig, David E.
  • Wang, Sun Ling


Meeting growing global demand for food, fiber, and biofuel requires robust investment in agricultural research and development (R&D) from both public and private sectors. This study examines global R&D spending by private industry in seven agricultural input sectors, food manufacturing, and biofuel and describes the changing structure of these industries. In 2007 (the latest year for which comprehensive estimates are available), the private sector spent $19.7 billion on food and agricultural research (56 percent in food manufacturing and 44 percent in agricultural input sectors) and accounted for about half of total public and private spending on food and agricultural R&D in high-income countries. In R&D related to biofuel, annual private-sector investments are estimated to have reached $1.47 billion worldwide by 2009. Incentives to invest in R&D are influenced by market structure and other factors. Agricultural input industries have undergone significant structural change over the past two decades, with industry concentration on the rise. A relatively small number of large, multinational firms with global R&D and marketing networks account for most R&D in each input industry. Rising market concentration has not generally been associated with increased R&D investment as a percentage of industry sales.

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  • Fuglie, Keith O. & Heisey, Paul W. & King, John L. & Day-Rubenstein, Kelly A. & Schimmelpfennig, David E. & Wang, Sun Ling, 2011. "Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide," Economic Research Report 120324, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uersrr:120324

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    References listed on IDEAS

    1. Deepak Rajagopal & Steve Sexton & Gal Hochman & David Zilberman, 2009. "Recent Developments in Renewable Technologies: R&D Investment in Advanced Biofuels," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 621-644, September.
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    Cited by:

    1. Spielman, David J. & Kennedy, Adam, 2015. "Innovation, competition, and productivity growth: Evidence on the impact of growth in Asia's maize seed sector," 2015 Conference, August 9-14, 2015, Milan, Italy 211561, International Association of Agricultural Economists.
    2. Bloom, Nicholas & Jones, Charles I & Reenen, John Van & Webb, Michael, 2017. "Are ideas getting harder to find?," LSE Research Online Documents on Economics 86588, London School of Economics and Political Science, LSE Library.
    3. Wang, Sun Ling & Heisey, Paul & Schimmelpfennig, David & Ball, Eldon, 2015. "Agricultural Productivity Growth in the United States: Measurement, Trends, and Drivers," Economic Research Report 207954, United States Department of Agriculture, Economic Research Service.
    4. Oehmke James F. & Naseem Anwar, 2016. "Mergers and Acquisitions (M&As), Market Structure and Inventive Activity in the Agricultural Biotechnology Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 19-32, May.
    5. Greene, Catherine & Wechsler, Seth J. & Adalja, Aaron & Hanson, James, 2016. "Economic Issues in the Coexistence of Organic, Genetically Engineered (GE), and Non-GE Crops," Economic Information Bulletin 232929, United States Department of Agriculture, Economic Research Service.
    6. Roehlano M. Briones, 2013. "The Structure of Agricultural Trade Industry in Developing Countries," Trade Working Papers 23420, East Asian Bureau of Economic Research.
    7. Salvatore Ceccarelli, 2014. "GM Crops, Organic Agriculture and Breeding for Sustainability," Sustainability, MDPI, Open Access Journal, vol. 6(7), pages 1-14, July.
    8. 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.
    9. repec:pal:eurjdr:v:29:y:2017:i:3:d:10.1057_s41287-017-0090-7 is not listed on IDEAS
    10. repec:zbw:esthes:157992 is not listed on IDEAS
    11. Baines, Joseph, 2014. "The Ethanol Boom and the Restructuring of the Food Regime," Working Papers on Capital as Power 2014/03, Capital As Power - Toward a New Cosmology of Capitalism.
    12. repec:zbw:espost:157793 is not listed on IDEAS
    13. Melkonyan, Ani, 2015. "Climate change impact on water resources and crop production in Armenia," Agricultural Water Management, Elsevier, vol. 161(C), pages 86-101.
    14. 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.
    15. Spielman, David J. & Kennedy, Adam, 2016. "Towards better metrics and policymaking for seed system development: Insights from Asia's seed industry," Agricultural Systems, Elsevier, vol. 147(C), pages 111-122.
    16. 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.
    17. Nelson, Gerald C. & van der Mensbrugghe, Dominique, 2014. "Public sector agricultural research priorities for sustainable food security: Perspectives from plausible scenarios:," IFPRI discussion papers 1339, International Food Policy Research Institute (IFPRI).
    18. Sansi Yang & C. Richard Shumway, 2014. "Dynamic Adjustment in U.S. Agriculture under Climate Uncertainty," 2014 Papers pya413, Job Market Papers.
    19. Spielman, David J. & Smale, Melinda, 2017. "Policy options to accelerate variety change among smallholder farmers in South Asia and Africa South of the Sahara," IFPRI discussion papers 1666, International Food Policy Research Institute (IFPRI).
    20. Hendrickson, Mary K. & Howard, Philip H. & Constance, Douglas H., 2017. "Power, Food and Agriculture: Implications for Farmers, Consumers and Communities," EconStor Preprints 171171, ZBW - German National Library of Economics.
    21. Balasubramanian, R., 2014. "Presidential Address: Agricultural Research and Extension in India: Reflections on the Reality and a Roadmap for Renaissance," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 69(1).
    22. Heisey, Paul & Day-Rubenstein, Kelly, 2015. "Using Crop Genetic Resources To Help Agriculture Adapt to Climate Change: Economics and Policy," Economic Information Bulletin 202351, United States Department of Agriculture, Economic Research Service.
    23. Tokgoz, Simla & Fuglie, Keith, 2013. "Public Policy, Induced Innovation, and Private Research: The Case of Agriculture," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149613, Agricultural and Applied Economics Association.


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