Reducing public spending on agricultural research is a case of saving money

Harwood D. Schaffer and Daryll E. Ray

For more than a century, the United States has been a dominant force in world agricultural markets.

Much of this influence can be attributed to the following:

  1. A large land base lending itself to a wide variety of agricultural systems resulting in a significant level of production beyond domestic needs, and,
  2. A set of commodity markets that provide price transparency for sellers and buyers of livestock and agricultural products, and
  3. Significant public expenditure on agricultural research and development (R&D).

As we reflect on the 2023 Farm Bill, the final piece comes into focus. While much of the public debate about farm bill financing typically focuses on nutrition and agriculture support programs, a June 6, 2022 article in “Amber Waves,” a service publication Economic Research of the United States Department of Agriculture, directed our thoughts towards the financing of agricultural R&D programs.

In this article, “Investment in public agricultural research and development in the United States has fallen by one-third over the past two decades, lagging behind major commercial competitors,” Kelly P. Nelson and Keith Fuglie point out. that “public agricultural R&D spending from 1900 to 2011 generated, on average, $20 in benefit to the U.S. economy for every $1 spent.”

Despite this, government agricultural R&D spending in the United States in 2019 (in constant 2019 dollars adjusted by an R&D price index) was only 68% of what it was at the peak in 2002. “about where they were in 1970”.

We understand the budget constraints that Congress has imposed on itself. It is also clear that commodity and nutrition programs garner more vocal support than agricultural R&D programs.

But by cutting government spending on agricultural R&D, we feel we are running out of cash and cash, leaving the U.S. agricultural sector at a disadvantage compared to other major agricultural economies.

A graph from Nelson-Fuglie’s article shows that while public investment in agricultural R&D in the United States has declined, it has increased in the European Union, China, India, and Brazil.

In an effort to control the federal budget, we turned our backs on funding an activity that would bring $20 back to the economy for every dollar spent. Taxes on these extra expenses would likely pay for themselves, and more.

In addition to increasing public spending on agricultural research, we would say we need to change the way funding is allocated. In the past, a significant portion of agricultural R&D funding not used to cover research conducted by USDA agencies (intramural funding) was allocated “through “capacity grants” to state and territorial institutions. based on a formula and obligated states to Federal Subsidy.

Over the past three decades we have seen a move towards the use of competitive grants. Competitive grants target an issue and call for proposals which are then sorted to determine which are funded. The idea behind it is that these competitive grants allow the USDA to direct funding to the “best proposals” thus using limited dollars more efficiently.

While we agree that competitive grants have a role to play, we believe that increasing the level of capacity grants would allow researchers to spend less time writing grant proposals, most of which are unfunded, and more time identifying and solving the kinds of problems facing farmers and ranchers in their respective states and territories. This would allow researchers to approach the same problem in different ways in different states and compare their results.

An increase in capacity grants would also free administrators of land grant institutions from their reliance on corporate funding when the benefit of research accrues primarily to the donor. With the increased consolidation occurring in the agricultural input industries, increased public funding could help balance the economic advantage of these companies over the average farmer.

Overall, we believe it is in the interest of the US agricultural industry that the agricultural R&D portion of the agricultural bill be excluded from current budget constraints where research must compete with everything else. Funding should be based on what the United States needs to address the challenges (climate change, water availability, zoonotic diseases that can wipe out entire herds, among others) facing U.S. agricultural producers.

Harwood D. Schaffer is Adjunct Research Assistant Professor in the Department of Sociology at the University of Tennessee and Director of the Center for Agricultural Policy Analysis. Daryll E. Ray is professor emeritus at the University of Tennessee Institute of Agriculture and retired director of the Center for Agricultural Policy Analysis.

Lana T. Arthur