R&D Pays Off In Profit

Agriculture industry leaders from around California and the U.S. gathered recently in the state’s capital for a two-day symposium on research and Extension. There was general agreement on two key points: investing in commodity research and Extension pays off handsomely in increased production, but that investment has generally declined in recent decades, causing a corresponding slowdown in productivity.

In many ways, agriculture has become a victim of its own success, USDA Under Secretary for Research, Education and Economics, Gale Buchanan, told the audience. He hailed the symposium’s organizers for holding such a gathering, noting that the decline in agricultural research was a residual effect of the public’s taking their food supply for granted. Buchanan cited a quote from Jan Leach, a Colorado State University plant pathologist: “Agriculture has been so productive and done so well, people have kind of lost sight of how fragile it really is. It’s as if we have lost track of the fact that food is linked to agriculture, which is linked to human survival.”

Buchanan said it’s easy to forget that agricultural research, specifically evaluating plants for desirable properties, is a relatively new idea in human history, dating back only 150 years or so. It was about that time that our nation’s leaders recognized the importance of a strong agricultural sector, said Buchanan. “It is no coincidence,” he said, “that the motto on the USDA seal reads, ‘Agriculture is the Foundation of Manufacture and Commerce.’”

Societal Disconnect

However, said Buchanan, that recognition of agriculture’s importance has declined as the disconnect between the average citizen and agriculture has grown. Despite that, there are some bright spots on the horizon. By far the most encouraging was the recent passage of the Farm Bill, which for the first time recognizes the importance of specialty crops. Buchanan said the Farm Bill includes annual mandatory money for specialty crops research and education of $50 million per year, as well as $30 million for the remainder of the current fiscal year. Buchanan concluded by saying that all those in the symposium’s audience have a role to play in ensuring that agriculture — and specifically fruit and vegetable production — has a bright future.

Investing In Ag R&D…

(Editor’s Note: At the recent symposium on research and extension in Sacramento, CA, an agricultural economist from Cal Poly State University, Jennifer James, summed up a draft study she has done with colleagues Julian Alston, University of California-Davis; Philip Pardey, University of Minnesota; and Matt Anderson, University of Wyoming. Here is her summation.)

 Investing in Agricultural R&D

… Takes Patience — To realize the benefits takes time. If you invest in R&D today, it may take 10 years to have a substantial effect on productivity.

… And Persistence — You have to keep investing to keep the stream of benefits coming. If you want to keep growing, you have to keep growing the funding.

… But It Pays Off — One dollar invested in 1950 returned about $30 in benefits. This incredibly high payoff is driven by the size of the industry. Small increases in productivity in such a large industry means large increases in value. And it might take 10 years to begin paying off, but those benefits grow over time. That 30-to-1
ratio is an accumulation of benefits.

… For Your Own State — Even if you’re only concerned about your own area, the research pays off. For instance, a $1 investment will return $20 to your own state.

… And For Others — Other states will also realize benefits, about $10 for every dollar invested. That doesn’t even count the benefits realized outside the U.S. A lot of developing countries rely on technological spillover from wealthy countries, so our slowdown in investment in R&D can have adverse impacts on food security throughout the world.

Extension: “Those of us in the research, education, and Extension system must maintain an open vision and refuse to be tied to the present or — heaven forbid — the past. We must look to the future and be willing to change and meet new challenges with new, creative, and innovative ideas and approaches.”

Associations: “There is a unique and very important role for commodity and trade associations. You must work closely with your system and become knowledgeable about its strengths, weaknesses, and most importantly, its needs. You have a key role to play in nurturing the system. I cannot emphasize this point enough.”

Consumers: “Consumers, too, have a role. Unfortunately, most consumers take their food and life essentials for granted. Consumers have a responsibility to understand how their food and other essentials are developed. I think that if they knew more, then they would be more supportive of the system because they would be part of it. We all need to work with citizens from an early age to help them understand agriculture. In a few weeks, I will return to California to meet with Ag in the Classroom teachers. People have got to understand that food is not a God-given right.”









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