Agricultural R&D: A Neglected, Crucial Public Good
The Council on Food, Agriculture and Resource Economics webinar, “Agricultural R&D: A Neglected, Crucial Public Good,” examined the essential role of public agricultural research and development (R&D) in driving productivity growth, strengthening food security, and supporting environmental sustainability. Presenters highlighted compelling evidence that agricultural R&D generates exceptionally high returns while warning that public investment—particularly in the United States—has declined in real terms over the past two decades. At a time of rising global food demand, mounting climate pressures, and intensifying international competition, the discussion emphasized the long-time horizons required for research to bear fruit and the urgent need for renewed public investment to sustain productivity, competitiveness, and long-term food security.
Julian M. Alston – The Returns to Agricultural R&D: Time to Double Down!
Julian M. Alston of the University of California, Davis described agricultural innovation as the “slow magic” of economic growth, noting that research investments often require 10 to 15 years to generate new technologies, followed by another decade or more before widespread adoption produces measurable benefits (Alston et al. 2023, Wang et al. 2025). Despite these long lags, historical evidence shows exceptionally high returns. Across hundreds of studies and thousands of estimates, the average benefit–cost ratio is 27.9 to one, with a median of roughly eight to one (Alston and Pardey 2022). These gains reflect higher yields, cost savings for farmers, and lower prices for consumers, along with added benefits such as improved resilience and reduced pressure on natural resources.
Alston emphasized that while returns remain strong, public agricultural R&D funding has slowed or declined, particularly in the United States, where spending has fallen by roughly one-third in real terms since the early 2000s (Pardey and Smith 2017, Pardey et al. 2025). At the same time, productivity growth has slowed since its mid-20th-century peak. Because research impacts unfold over decades, the consequences of recent funding reductions have yet to be fully realized. Looking ahead, rising demand and climate change will require sustained investment, with estimates suggesting that substantial increases in R&D spending are needed simply to offset climate-related productivity losses (Ortiz-Bobea et al. 2025).
References
Alston, J.M. and P.G. Pardey. “The Economics of Agricultural Innovation.” Chapter 75 in the Elsevier Handbook of Agricultural Economics, Volume 5 eds. Christopher B. Barrett and David R. Just, pp. 3895–3980, December 2022. Amsterdam: Elsevier.
Alston, J.M., P.G. Pardey, D. Serfas, and S. Wang. “Slow Magic: Agricultural vs Industrial R&D Models.” Annual Review of Resource Economics 15(2023): 471–91. doi.org/10.1146/annurev-resource-111820-034312
Ortiz-Bobea, A., R.G. Chambers, Y. He, and D.B. Lobell. “Large Increases in Public R&D Investment are Needed to Avoid Declines of US Agricultural Productivity.” Proc. Natl. Acad. Sci. U.S.A. 122 (11) e2411010122, https://doi.org/10.1073/pnas.2411010122 (2025).
Pardey, P.G., C. Chan-Kang, G.-J. Stads, J.M. Alston, J.C. Greyling, and H. Muñoz. “Food Will Be More Affordable — If We Double Funds for Agriculture Research Now.” Nature 648 (2025): 271–274. doi.org/10.1038/d41586-025-03970-0
Pardey, P. G. & Smith, V. H. Waste Not, Want Not: Transactional Politics, Research and Development Funding, and the US Farm Bill (American Enterprise Institute, 2017).
Wang, S., J.M. Alston, and P.G. Pardey. “R&D Lags in Economic Models.” Economics of Innovation and New Technology (2024): 1–21. doi.org/10.1080/10438599.2024.2378893
Uris Baldos – Co-Benefits of R&D-Driven Agricultural Productivity Growth
Uris Baldos of Purdue University focused on the environmental and food security co-benefits of R&D-driven productivity growth. Using economic models to simulate scenarios with and without productivity gains, he demonstrated that higher productivity allows agriculture to produce more with fewer inputs. Drawing on historical evidence from the Green Revolution and the adoption of modern crop varieties developed by national and international research centers, Baldos showed that productivity growth reduced land-use expansion, lowered greenhouse gas emissions from land-use change, and helped avoid the extinction of threatened plant and animal species.
Looking forward, modeling results indicate that doubling U.S. agricultural R&D spending between 2025 and 2035 could increase agricultural output by roughly 20 percent with little impact on cropland use and agricultural emissions—especially when paired with policies that limit farm input use. Globally, increased R&D investment leads to higher output, lower emissions from land-use change and farm production, and measurable reductions in caloric undernutrition. Baldos concluded that sustained investments in agricultural R&D can simultaneously enhance output, reduce environmental impacts, and improve food security, while serving as a tool to offset climate-related losses.
References
Baldos, Cisneros-Pineda, Fuglie and Hertel (2025). Adoption of improved crop varieties limited biodiversity losses, terrestrial carbon emissions, and cropland expansion in the tropics, Proc. Natl. Acad. Sci. U.S.A. 122 (6) e2404839122, https://doi.org/10.1073/pnas.2404839122.
Baldos 2023. “Impacts of US Public R&D Investments on Agricultural Productivity and GHG Emissions” Journal of Agricultural and Applied Economics , Volume 55 , Issue 3, 536 - 550
Baldos, Fuglie and Hertel (2020) The research cost of adapting agriculture to climate change: A global analysis to 2050 Agricultural Economics. 2020;51:207–220.
Fuglie, K. 2018. “R&D Capital, R&D Spillovers, and Productivity Growth in World Agriculture.” Applied Economic Perspectives and Policy 40(3):421–444.
Fuglie, K. O., & Echeverria, R. G. (2024). The economic impact of CGIAR-related crop technologies on agricultural productivity in developing countries, 1961–2020. World Development, 176, 106523.
Fuglie, K., S. Ray, U.L.C. Baldos, and T.W. Hertel. 2022. “The R&D cost of climate mitigation in agriculture.” Applied Economic Perspectives and Policy 44(4):1955–1974.
Ortiz-Bobea, Chambers, He, & Lobell, (2025) Large increases in public R&D investment are needed to avoid declines of US agricultural productivity, Proc. Natl. Acad. Sci. U.S.A. 122 (11) e2411010122, https://doi.org/10.1073/pnas.2411010122
Dan Blaustein-Rejto – Cultivating Value: A New Focus for Public Agricultural R&D
Dan Blaustein-Rejto, Director of Food and Agriculture at The Breakthrough Institute, examined why public agricultural R&D funding has declined despite its well-documented benefits. He pointed to limited prioritization by farm groups, noting that while many support research in principle, it often ranks below more immediate policy concerns. He described the “productivity paradox,” in which early adopters of new technologies benefit temporarily, but widespread adoption increases supply and lowers commodity prices, eroding long-term gains for farmers even as consumers and other stakeholders benefit.
Blaustein-Rejto also highlighted additional barriers, including the long delay between research investment and realized benefits and shifts in research focus away from direct farm productivity. He cited CRISPR as an example of foundational research funded decades ago that is only now approaching broader commercialization. In addition, he noted that R&D benefits are often diffuse across regions, creating political challenges for sustained funding. To strengthen support, he called for broader coalitions among consumers, environmental groups, and the food industry; expanded public-private partnerships; and research agendas that remain responsive to farmer priorities—while maintaining strong foundational investment to enable future breakthroughs.
This program is supported in part by the Agricultural and Applied Economics Association.