Agricultural Production, Productivity, and Research Investment in North Dakota

Junkan Li, William Nganje and Sandro Steinbach

No 404147, ARPC Report from North Dakota State University

Abstract: This report examines long-term trends in farm income, agricultural production, productivity, and research and development (R&D) investment in North Dakota. Although nominal farm receipts have increased substantially, growth in real net receipts has been more modest because rising production costs have absorbed a substantial share of revenue gains, particularly in livestock production. North Dakota also achieved strong long-run total factor productivity (TFP) growth after 1960, consistent with the delayed effects of earlier public agricultural R&D growth. However, productivity growth has slowed in recent decades, and aggregate TFP has stagnated after 2000, likely reflecting slower R&D growth in earlier decades, especially during the 1990s. Despite this slowdown, estimated returns to North Dakota agricultural R&D remain positive and economically meaningful. The preferred specification produces an internal rate of return (IRR) of 28.42 percent and a modified internal rate of return (MIRR) of 10.37 percent. Counterfactual simulations suggest that if real R&D investment had continued to grow at the 2000–2015 rate during 2015–2025, additional agricultural production through 2075 would have been worth $7.47 billion in 2015 dollars. These findings suggest that sustained public agricultural R&D investment can support North Dakota’s long-run productivity growth and production capacity.

Keywords: Productivity Analysis; Public Economics; Research and Development/Tech Change/Emerging Technologies; Research Research Methods/Statistical Methods (search for similar items in EconPapers)
Date: 2026-06-15
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Persistent link: https://EconPapers.repec.org/RePEc:ags:arpcre:404147

DOI: 10.22004/ag.econ.404147

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