Recalibrating the Reported Rates of Return to Food and Agricultural R&D

Xudong Rao (), Terrance Hurley and Philip Pardey

No 135018, Staff Papers from University of Minnesota, Department of Applied Economics

Abstract: Prices of basic food staples and feed crops have soared in recent years, renewing concerns about the ability of global food supplies to meet the projected growth in aggregate demand. Notwithstanding these concerns, and apparently at odds with a vast body of economic evidence reporting exceptionally high rates of return to investments in agricultural R&D, growth in public R&D spending for food and agriculture has slowed worldwide, especially in rich countries. Left unchecked, the consequent slowdown in agricultural productivity will push many more people into hunger and undercut economic growth, especially in the many economies worldwide still heavily reliant on agriculture. The observed R&D spending behavior is consistent with a determination that the rate of return evidence is implausible. We examine this notion, recalibrate a new, comprehensive compilation of the evidence, and find in favor of a much reduced rate of return to research. Nonetheless, the scaling back of public agricultural R&D spending is not supported from this new economic view of the evidence.

Keywords: Agricultural and Food Policy; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 32
Date: 2012-09
New Economics Papers: this item is included in nep-agr and nep-ino
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Citations: View citations in EconPapers (11)

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Working Paper: Recalibrating the Reported Rates of Return to Food and Agricultural R&D (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umaesp:135018

DOI: 10.22004/ag.econ.135018

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