Agricultural Research: Benefits and Beneficiaries of Alternative Funding Mechanisms

This article analyzes alternative funding mechanisms for agricultural research and the benefits and beneficiaries of these approaches. Although other mechanisms exist, the discussion focuses on public formula and competitive grants programs, private-sector contracts and grants, and revenue from sale of intellectual property rights (IPRs) or new products embodying innovations. Over the past two decades, agricultural research has been criticized for the noncompetitive nature of research fund allocations. Considerable evidence exists that the system has performed well for society. We conclude that the private sector should be permitted to carry out research that it finds profitable to undertake with minimal competition from the public sector. The public research institutions should focus on general and pretechnology science programs that complement private research-and-development (R&D) activities and conduct applied research in areas in which innovations are socially beneficial but not privately profitable. The mechanism for channeling public funds to researchers (e.g., formula, competitive grants, or earmarks) can be expected to affect the types of benefits/impacts of agricultural research conducted and the efficiency of the research activity. Issues remain about the emphasis on process versus substance in the R&D funding debate. However, available evidence does not suggest the elimination of traditional funding mechanisms for public agricultural research.