IMPACT ANALYSES AND DECISION STRATEGIES FOR AGRICULTURAL RESEARCH (NC1003)

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: TERMINATED
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 0231474
• Project No.: WYO-482-12
• Multistate No.: NC-_OLD1034
• Project Start Date: Oct 1, 2012
• Project End Date: Sep 30, 2016

Project Director
Andersen, M, .

Recipient Organization
UNIVERSITY OF WYOMING
1000 E UNIVERSITY AVE DEPARTMENT 3434
LARAMIE,WY 82071-2000

Performing Department
Agricultural And Applied Economics

Non Technical Summary
NC1034 has been operating under the following three objectives during the most recent project period. Objective 1. To estimate the expected and actual flow of benefits and costs of research for agriculture, and related areas, including the incidence of their distribution. Objective 2. To analyze decision strategies for funding, planning, managing, and evaluating agricultural research by public institutions and private organizations. Objective 3. To analyze opportunities, risks, and net benefits from existing and potential public-private sector linkages, including new institutions (joint ventures, partnering, consortia, specialty research centers, start-up companies, intellectual property), technology transfer mechanisms (licensing, exchange arrangements, direct purchase, borrowing), and freedom to operate.

Animal Health Component

0%

Research Effort Categories

Basic

(N/A)

Applied

100%

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
601	5310	3010	30%
601	5330	3010	30%
601	6110	3010	40%

Knowledge Area
601 - Economics of Agricultural Production and Farm Management;

Subject Of Investigation
5310 - Machinery and equipment; 5330 - Farm structures and related facilities; 6110 - Economy of the United States and sectors thereof;

Field Of Science
3010 - Economics;

Keywords

agricultural productivity

agricultural r&d

agricultural science

Goals / Objectives
To estimate the expected and actual flow of benefits and costs of research for agriculture, and related areas, including the incidence of their distribution. To analyze decision strategies for funding, planning, managing, and evaluating agricultural research by public institutions and private organizations. To analyze opportunities, risks, and net benefits from existing and potential future public-private sector linkages, including new institutions (joint ventures, partnering, consortia, speciality research centers, start-up companies, intellectual property), technology transfer. To analyze the adoption and diffusion of new agricultural technologies, assess physical, economic, and institutional barriers to adoption, and evaluate policies intended to overcome such barriers.

Project Methods
To achieve the above three objectives, the following methods will be employed, including coordination to avoid needless duplication. Sub-projects involve parallel but complementary projects undertaken by individual AESs. Over time, however, an increasing number of sub-projects have been undertaken collaboratively by scientists at two or more participating institutions. We expect this trend toward increasing collaboration to continue throughout the tenure of the project. Roles and responsibilities by AES are noted below. Under Objective 1, the project will undertake parametric and non-parametric analyses of the impacts of public and private research and the technologies that it generates on: (a) technology adoption by farmers, (b) consumer acceptance of new food products and food safety, (c) agricultural and resource productivity, (d) the performance of the U.S. commodity and storage programs, (e) new energy sources, new pesticides, climate change, environmental quality, and bioterrorism, (f) international technology transfer, and (g) the economic welfare of producer, consumer, and agribusiness groups.

Progress 10/01/12 to 09/30/16

Outputs
Target Audience:Policy makers and academics. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?I gave the Keynote Speech at the conference Impacts of agricultural research - towards an approach of societal values An International Conference organized by the French National Institute for Agricultural Research (INRA) November 3-4 2015, Paris How have the results been disseminated to communities of interest?One publication in 2015 in Food Policy: Andersen, M.A., Public investment in U.S. agricultural R&D and the economic benefits, Food Policy 51, 2015 What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? The first goal of the multi-state research project titled, Impact Analysis and Decision Strategies for Agricultural Research, is "to estimate the expected and actual flow of benefits and costs of research for agriculture, and related areas, including the incidence of their distribution." In 2013, I published a paper in Agricultural Economics with M.S. graduate student Wenxing Song on this topic. This research estimates the economic return to public investments in agricultural R&D. The research indicates that the real rate-of-return to agricultural R&D in the United States is 10.5 percent per annum. This represents a substantial decrease in estimated return from previous studies that report the return to be much higher, such as in the range of 50 percent to 100 percent per annum. We argue that previous studies on this topic had a major conceptual error. The conceptual error pertains to use of the incorrect measure of the rate-of-return to evaluate public investment in R&D, namely an Internal Rate-of-Return (IRR). The correct measure is a Modified IRR, which when applied to the same data yield a significantly lower estimate of the return to R&D. The second goal of the project is stated as, "to analyze decision strategies for funding, planning, managing, and evaluating agricultural research by public institutions and private organizations." In the fall semester of 2013 I was on sabbatical at the University of Leuven in Belgium to work with information scientist Wolfgang Glanzel on a study of global agricultural science. We downloaded 850,000 publications from the Web-of-Science from 1992-2012 that represent global agricultural science. We are currently working on a bibliometric analysis of the publications. Furthermore, I plan to use the publications from the United States to conduct a network analysis of R&D conducted at the Agricultural Experiment Stations (AES) in the United States. We will use the results to map the network of research spillover relationship between the various AES using metrics that capture similarities in research efforts. The network of spillover relationship will then be used in an economic model to estimate the economic return to research, as well as in a new model of the optimal investment strategy among the AES's to maximize research output. The results will be compared with the actual pattern of investment.

Publications

• Type: Journal Articles Status: Published Year Published: 2015 Citation: Andersen, M.A., Public investment in U.S. agricultural R&D and the economic benefits, Food Policy 51, 2015

Progress 10/01/14 to 09/30/15

Outputs
Target Audience:Policy makers and academics. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest?The French National Institute for Agricultural Research (INRA) recently completed a study of the economic rate of return to public investments in agricultural R&D in France, which utilized many techniques developed by myself and co-authors in recent years. INRA subsequently invited me to be a Keynote Speaker at a conference in Paris where they were presenting the results of their study. I argued strongly in favor of a new method for estimating the rate of return to public investments in R&D, and this was well received by the experts attending the conference. What do you plan to do during the next reporting period to accomplish the goals?I have numerous studies in review or near submission. The most important of these is titled, "The Rise and Fall of U.S. Farm Productivity Growth, 1910-2009." In this study we demonstrate the dramatic rise and subsequent fall farm productivity growth during the 20th Century and offer potential explanations for the dramatic changes.

Impacts
What was accomplished under these goals? In November of 2015 I traveled to Paris to be a Keynote Speaker for an international conference organized by the French National Institute for Agricultural Research (INRA) titled "Impacts of agricultural research - towards an approach of societal values." Researchers with INRA recently completed a study of the economic rate of return to public investments in agricultural R&D in France, which utilized many techniques developed by myself and co-authors in recent years. Most importantly, at the presentation I argued strongly in favor of a new method for estimating the rate of return to public investments in R&D, and this was well received by the experts attending the conference.

Publications

• Type: Journal Articles Status: Accepted Year Published: 2015 Citation: Andersen, Matthew A. "Public investment in US agricultural R&D and the economic benefits." Food Policy 51 (2015): 38-43.

Progress 10/01/13 to 09/30/14

Outputs
Target Audience: Policy makers and academics. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Nothing Reported How have the results been disseminated to communities of interest? I presented a study of the stucture of agricultural and natural resource science conducted at the AES in the Western U.S. to members of the Western Association of Agricultural Experiment Station Directors at their annual joint summer meeting in San Diego, CA in the summer of 2014. Participants at this meeting included all of the Deans of the Colleges of Agriculture and Natural Resources and the AES Directors at the land-grant universities in the western United States. What do you plan to do during the next reporting period to accomplish the goals? I plan on updating a large database of production accounts for U.S. agriculture that I currently maintain. The data include the prices and quantities of 132 categories of inputs and outputs in U.S agriculture for the period 1949-2007. I plan on updating these data to the year 2012 using the 2012 Census of Agriculture. The data are used to measure and track productivity in U.S. agriculture, as well as to estimate an economic return to public investments in agricultural R&D.

Impacts
What was accomplished under these goals? I continue to conduct research on the economic returns to public investments in R&D in U.S. agriculture, as well as to measure and track agricultural productivity in the United States. I recently had a paper accepted in Food Policy that outlines a new method for estimating the returns to research and concludes the real rate of return to public agricultural R&D in the United States is 10.5 percent per annum. I also have a paper in review at the Journal of Economic History titled, "The rise and fall of U.S. farm productivity growth, 1910-2007." In this paper we present conclusive evidence of a pervasive slowdown in U.S. agricultural productivity in recent decades. I also have a paper under review at Agricultural Economics titled, "A dual economic analysis of productivity growth and research lag distributions in U.S. agriculture." In this paper I measure productivity growth from a dual perspective and identify a research lag distribution for U.S. agriculture. The findings support earlier research that the time lags between spending on agricultural R&D and a measurable economic benefit are very long, on the order of 25 years or more. Finally, I conducted a bibliometric study of agricultural and natural resource science conducted by the Agricultural Experiment Stations in the western United States. The study was used in the Annual Report of the Western Association of Agricultural Experiment Station Directors (WAAESD) to demonstrate the structure of research activities conducted by the AESs in the period 2007-2012. I also conducted a similar study for the University of California Division of Agriculture and Natural Resources (UC DANR) and the University of Wyoming.

Publications

• Type: Journal Articles Status: Accepted Year Published: 2015 Citation: Andersen, M.A. Public investment in U.S. agricultural R&D and the economic benefits. Food Policy 51 (2015)

Progress 10/01/12 to 09/30/13

Outputs
Target Audience: Policy makers and academics. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided? Sabbatical in Belgium to work with internationally renowned information scientist Wolfgang Glanzel on a study of global agricultural science. How have the results been disseminated to communities of interest? One publication in 2013 in Agricultural Economics, titled "The Economic impact of public agricultural research and development in the United States." What do you plan to do during the next reporting period to accomplish the goals? I plan to continue my bibliometric study of global agricultural science and to estimate the network of spillover relationship among the AES using network analysis. Furthermore, I plan on updating a critically important database on production accounts for U.S. agriculture that I use to measure and track agricultural productivity. The database is essential to estimating the returns to research. I will update the state-specific database in the summer of 2014 using data from the recently released Census of Agriculture, 2012.

Impacts
What was accomplished under these goals? The first goal of the multi-state research project titled, Impact Analysis and Decision Strategies for Agricultural Research, is "to estimate the expected and actual flow of benefits and costs of research for agriculture, and related areas, including the incidence of their distribution." In 2013, I published a paper in Agricultural Economics with M.S. graduate student Wenxing Song on this topic. This research estimates the economic return to public investments in agricultural R&D. The research indicates that the real rate-of-return to agricultural R&D in the United States is 10.5 percent per annum. This represents a substantial decrease in estimated return from previous studies that report the return to be much higher, such as in the range of 50 percent to 100 percent per annum. We argue that previous studies on this topic had a major conceptual error. The conceptual error pertains to use of the incorrect measure of the rate-of-return to evaluate public investment in R&D, namely an Internal Rate-of-Return (IRR). The correct measure is a Modified IRR, which when applied to the same data yield a significantly lower estimate of the return to R&D. The second goal of the project is stated as, "to analyze decision strategies for funding, planning, managing, and evaluating agricultural research by public institutions and private organizations." In the fall semester of 2013 I was on sabbatical at the University of Leuven in Belgium to work with information scientist Wolfgang Glanzel on a study of global agricultural science. We downloaded 850,000 publications from the Web-of-Science from 1992-2012 that represent global agricultural science. We are currently working on a bibliometric analysis of the publications. Furthermore, I plan to use the publications from the United States to conduct a network analysis of R&D conducted at the Agricultural Experiment Stations (AES) in the United States. We will use the results to map the network of research spillover relationship between the various AES using metrics that capture similarities in research efforts. The network of spillover relationship will then be used in an economic model to estimate the economic return to research, as well as in a new model of the optimal investment strategy among the AES's to maximize research output. The results will be compared with the actual pattern of investment.

Publications

• Type: Journal Articles Status: Published Year Published: 2013 Citation: Andersen, M.A., and Song, W. 2013. The Economic impact of public agricultural research and development in the United States. Agricultural Economics 44 (3).
• Type: Journal Articles Status: Submitted Year Published: 2013 Citation: Public Investment in U.S. Agricultural R&D and the Economic Benefits, Submitted to Food Policy on 1/27/2013.