Public R&D, Private R&D, and U.S. Agricultural Productivity Growth: Dynamic and Long‐Run Relationships

Agricultural Research by the Private Sector

“…Using agricultural R&D data extended to more recent years and disaggregated into components, Tokgoz & Fuglie (2013) found that public agricultural R&D stimulated private land-saving R&D, but not private labor-saving R&D. Their elasticity estimates for private land-saving R&D ranged from 0.61 to 0.97, depending on what other factors were included in their model. Wang et al (2013) separated private agricultural R&D into crop and livestock components. Using a vector autoregression model and data covering 1970-2009, these researchers found that a shock to public crop research (such as an exogenous spending increase) caused private crop research but not livestock research to rise.…”

“…Using a vector autoregression model and data covering 1970-2009, these researchers found that a shock to public crop research (such as an exogenous spending increase) caused private crop research but not livestock research to rise. Wang et al (2013) also found that a shock to private applied crop research decreased public applied crop research and that a negative shock to public applied crop research led to increased public research in other agricultural areas, suggesting reallocation of public agricultural R&D resources in response to the growth of private agricultural R&D. Using agricultural patents rather than expenditures as the measure of private agricultural R&D, Toole & King (2011) found that public agricultural research performed in universities stimulated (and thereby complemented) agricultural patenting by firms in the chemical and allied products industry. These findings of complementarity between public and private agricultural research suggest that the public sector responded to the changing market and institutional environment by reallocating its research portfolio in a way that avoided direct competition with the private sector.…”

Consequences of agricultural total factor productivity growth for the sustainability of global farming: accounting for direct and indirect land use effects

“…All the specifications (shown in SM S-3) include country fixed effects. A strong body of evidence points out to agricultural TFP being mainly the inertial product of investments in agricultural R&D with significant time lags, ranging from 20 to 50 years from initial investments to actual productivity gains (Fuglie 2017a). In this sense, TFP growth can be considered exogenous to contemporaneous cropland expansion.…”

“…Our predictions of the land needed to satisfy projected growth in income suggest that current rates of TFP growth seem insufficient to increase production without using more land; this finding is similar to those reported by Steensland and Zeigler (2017). An important aspect to consider in the evaluation of future scenarios of cropland expansion is that TFP is the product of investments in research and development (RD) that may take from two to four decades to materialize (Fuglie 2017a). Recent estimates for the US suggest a lag of 19-23 years before initial investments translate into TFP (Baldos et al 2019).…”

“…TFP growth also benefits from geographic spillovers; in some cases such spillovers can account for more than half of the TFP growth of some countries (Alston 2002, Gutierrez andGutierrez 2003). TFP spillovers also occur from the RD activities carried out by international public research centers (Evenson 2003) and the private sector (Fuglie 2017a). Developed countries are more prone to benefit from both geographic and private RD spillovers than developing countries (Fuglie 2017a).…”