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Reduced U.S. Funding of Public Agricultural Research and Extension Risks Lowering Future Agricultural Productivity Growth Prospects

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  • Jin, Yu
  • Huffman, Wallace E.

Abstract

The objective of this paper is to provide policymakers with new estimates of the separate returns to public agricultural research and extension and a perspective on future agricultural productivity growth. This requires fitting an econometric model that contains separate regressors for the stock of public agricultural research and public agricultural extension. We use net measures to create our public agricultural research and extension variables. Our model is fitted to data for the U.S. contiguous 48 states, 1970-2004. It yields statistically significant estimates of within-state and spillin stocks of public agricultural research and of within-state agricultural extension. The econometric model of state agricultural TFP yields somewhat optimistic forecasts for agricultural total factor productivity over 2004-2010. The social rate of return to public investments in agricultural research and extension are shown to remain large—both are in excess of 60 percent, which is large by any standard.

Suggested Citation

  • 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.
  • Handle: RePEc:isu:genres:36796
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    File URL: http://www2.econ.iastate.edu/papers/p16796-2013-12-18.pdf
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    References listed on IDEAS

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    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.
    2. Alejandro Plastina & Lilyan Fulginiti, 2012. "Rates of return to public agricultural research in 48 US states," Journal of Productivity Analysis, Springer, vol. 37(2), pages 95-113, April.
    3. Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, May.
    4. Wallace E. Huffman & Richard E. Just, 2000. "Setting Efficient Incentives for Agricultural Research: Lessons from Principal-Agent Theory," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(4), pages 828-841.
    5. Nelson, Gerald C. & Rosegrant, Mark W. & Palazzo, Amanda & Gray, Ian & Ingersoll, Christina & Robertson, Richard & Tokgoz, Simla & Zhu, Tingju & Sulser, Timothy B. & Ringler, Claudia & Msangi, Siwa & , 2010. "Food security, farming, and climate change to 2050: Scenarios, results, policy options," Research reports Gerald C. Nelson, et al., International Food Policy Research Institute (IFPRI).
    6. Wallace E. Huffman & Robert E. Evenson, 2006. "Do Formula or Competitive Grant Funds Have Greater Impacts on State Agricultural Productivity?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 783-798.
    7. Huffman, Wallace E. & Evenson, Robert E., 1993. "Science for Agriculture: A Long Term Perspective," Staff General Research Papers Archive 10997, Iowa State University, Department of Economics.
    8. Wang, Sun Ling & Ball, Eldon, 0. "Agricultural Productivity Growth in the United States: 1948-2011," Amber Waves, United States Department of Agriculture, Economic Research Service, issue 01, February.
    9. Eldon Ball & David Schimmelpfennig & Sun Ling Wang, 2013. "Is U.S. Agricultural Productivity Growth Slowing?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 35(3), pages 435-450.
    10. Sun Ling Wang & Paul W. Heisey & Wallace E. Huffman & Keith O. Fuglie, 2013. "Public R&D, Private R&D, and U.S. Agricultural Productivity Growth: Dynamic and Long-Run Relationships," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(5), pages 1287-1293.
    11. Ahearn, Mary Clare & Yee, Jet & Bottum, John S., 2003. "Regional Trends In Extension System Resources," Agricultural Information Bulletins 33787, United States Department of Agriculture, Economic Research Service.
    12. 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.
    13. 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.
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    Cited by:

    1. Yang, Sansi & Shumway, C. Richard, 2014. "Dynamic Adjustment in U.S. Agriculture under Climate Uncertainty," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170609, Agricultural and Applied Economics Association.
    2. 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.

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    Keywords

    states; agriculture; returns to research; multifactor productivity; U.S.; forecasts;

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