For many decades, the United States led the world in public funding for agriculture research. But federal and state investments peaked in 2002 and have declined, adjusted for inflation, by more than 30% since.

Does this decline in publicly funded research and development (R&D) matter? Should farmers and ranchers care? A recent American Enterprise Institute paper by economists Philip Pardey and Vincent Smith argued they should care a lot. (https://www.aei.org/…)

Public R&D investments drive on-farm productivity -- that's supported by "thousands of economic estimates," the paper maintains -- and as public research spending has declined in recent years, so has on-farm productivity growth.

"Worse," the authors wrote, "agricultural productivity in the United States and other developed countries may decline (that is, growth rates may turn negative) if public support for agricultural research is not substantially increased immediately."

With crop pests and animal diseases constantly developing resistance, it takes a certain level of investment just to preserve today's levels of productivity. "Current annual investments in public agricultural R&D appear barely adequate and may even fall short of the amount required to address these sustainability challenges, never mind providing sufficient resources for improving agricultural productivity."

And while U.S. public investments in ag research have been declining, China's have been booming. China overtook the U.S. as the largest funder of public ag research in 2011 and has in some years been investing twice what the U.S. invests.

Should farmers and ranchers care about this change in status?

That's not as clear. The Chinese are doing some ambitious research and could end up developing some groundbreaking new crops. Though some of that research could benefit American farmers, there are risks to having the latest in disease-proof, climate-resistant seeds controlled by your country's geopolitical adversary.

Then, too, China's research is likely to increase the country's ability to feed itself -- and rely less on agricultural and food imports from the U.S. and other countries.

Remember, though, that China has a billion more mouths to feed than the U.S. and experienced mass hunger only a few decades ago. In some ways, it's unsurprising that China spends more on ag research.

The real problem for American farmers isn't that China is investing more; it's that we're investing less. Bragging rights are nice but hardly life changing. If spending on U.S. public ag research were rising rapidly, Americans wouldn't be nearly as worried about being No. 2 to China.

Those who wonder whether the decline in publicly funded research is really a problem point to American industry's investments in ag R&D. According to a 2023 study by Iowa State University's Center for Agricultural and Rural Development, fast-rising private-sector R&D spending offsets the public-sector funding decline.

"When we consider private sector spending, the U.S. is probably still the world leader in funding for agricultural R&D," CARD ventured.(https://agpolicyreview.card.iastate.edu/…)

But can private research really substitute for public? Doesn't it tend to be about creating products rather than unearthing the scientific insights that underly products?

The AEI authors contend that "Much of the private investment in agri-food innovation stands firmly on the shoulders of the public sector's more basic, riskier, and longer-term R&D." The AEI paper also argued that the share of all U.S. ag research, public and private, devoted to farm productivity has "erratically but inexorably drifted down."

The CARD study takes a different view, describing private and public investments in ag R&D as "complementary." I read that as more like hand-in-hand than one standing on the shoulders of the other.

That difference aside, the CARD paper cites USDA data indicating U.S. farm productivity fell 6% between 2009, when productivity growth peaked, and 2019. This, CARD said, could have been the result of declining public research funding -- or of a switch in ag research away from productivity enhancement.

Either way, farmers should care. If you're tempted to say, "Of course farmers care," the AEI authors' rejoinder is that they don't care enough. Asked to choose between more farm payments or more ag research, the groups representing them invariably pick the former.

It's shortsighted, Pardey and Smith maintain, to trade higher yields and lower production costs tomorrow for bigger government paychecks today. They have an answer for farmers who say research-driven increases in productivity just mean more production and lower crop prices: The bigger risk of lower crop prices is other countries -- think Brazil -- both increasing their productivity and putting more land into production.

At a conference recently, a speaker proclaimed that big future innovations in ag technology will need public funding. Private investors demand shorter timelines and more certain payoffs than research on big innovations can promise.

In the hallway later, the CEO of a startup company and a venture capitalist both agreed. It's yet another reason why more publicly funded ag research is essential.

Urban Lehner can be reached at urbanize@gmail.com

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