Agricultural productivity growth is slowing down in the United States because of a decline in spending on food and ag research, says the free-market American Enterprise Institute, presenting a long-term threat to domestic food production and international competitiveness. The authors of an AEI position paper said funding on research and development should double and said it could be offset by cutting “wasteful farm bill spending” in crop insurance and crop subsidies.
Released ahead of congressional drafting of the 2018 farm bill, the AEI paper said R&D funding also could be generated by requiring states to provide larger amounts of matching funds for federal grants; by creating check-off programs for producers and agribusinesses dedicated to research; and by institutions, such as the Foundation for Food and Agriculture Research, that require a dollar-for-dollar match from venture capitalists and non-federal investors.
“All of the economic evidence by hard-nosed economists suggests that at least a doubling would be an economically justifiable level of investment in food and ag R&D in the United States vis a vis what we have now,” said Philip Pardey, a University of Minnesota economist and co-author of the AEI paper. The United States “has lost its pre-eminent position” in ag research and is now out-spent by China, with India rising into third place. In the past, U.S. food and ag productivity grew at 2 percent a year. It dropped to 1.2 percent annually in the past decade, Pardey said at a briefing.
Five dozen scientific, farm and activist groups proposed a $6 billion increase in federal funding of agricultural research over the life of the 2018 farm bill in an October letter to the Senate and House Agriculture committees. The $6 billion increase would allow a doubling of funding for each of the four agencies that are part of USDA’s research, extension and education wing.
The AEI paper estimated federal spending on food and ag R&D at $2.4 billion a year, or 1.6 percent of the USDA budget. When President Lincoln created USDA in 1862, research was one of a handful of goals. Now, it is “almost an after-thought,” said Vince Smith, Montana State economist and Pardey’s co-author. USDA spending is dominated by public nutrition programs such as food stamps and school lunch. Even among agricultural outlays, research is a minor budget item – 10 percent of expenditures, compared to 38 percent for crop subsidies and 31 percent for crop insurance. Conservation gets 21 percent of the agricultural funding.
“From a society-wide perspective, the economically sensible strategy is to cut back on wasteful farm bill spending and instead significantly increase funding for public investment in agricultural R&D,” said AEI. “Shifting farm bill policy from a ‘spending’ and ‘income transfer’ program to an ‘investment’ program is more than mere rhetoric…(I)nvestments in U.S. agricultural R&D yield a 32-fold increase in economic benefits (to producers and consumers) for every taxpayer dollar invested.” But farm groups prefer money in their pockets today rather than multi-year research initiatives, which could produce larger results in the future, said Smith.
Ag research is a revered part of the U.S. agricultural tradition, with paragons such as George Washington Carver and Norman Borlaug, but its long-range potential often is given short shrift in Congress. Research funding, along with stewardship programs, frequently is raided to pay from more immediate needs or for projects with a more powerful constituency.