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Agricultural Research: Benefits and Beneficiaries of Alternative Funding Mechanisms

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  • Huffman, Wallace E.
  • Just, Richard E.

Abstract

This article analyzes alternative funding mechanisms for agricultural research and the benefits and beneficiaries of these approaches. Although other mechanisms exist, the discussion focuses on public formula and competitive grants programs, private-sector contracts and grants, and revenue from sale of intellectual property rights (IPRs) or new products embodying innovations. Over the past two decades, agricultural research has been criticized for the noncompetitive nature of research fund allocations. Considerable evidence exists that the system has performed well for society. We conclude that the private sector should be permitted to carry out research that it finds profitable to undertake with minimal competition from the public sector. The public research institutions should focus on general and pretechnology science programs that complement private research-and-development (R&D) activities and conduct applied research in areas in which innovations are socially beneficial but not privately profitable. The mechanism for channeling public funds to researchers (e.g., formula, competitive grants, or earmarks) can be expected to affect the types of benefits/impacts of agricultural research conducted and the efficiency of the research activity. Issues remain about the emphasis on process versus substance in the R&D funding debate. However, available evidence does not suggest the elimination of traditional funding mechanisms for public agricultural research.

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  • Huffman, Wallace E. & Just, Richard E., 1999. "Agricultural Research: Benefits and Beneficiaries of Alternative Funding Mechanisms," ISU General Staff Papers 199901010800001291, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genstf:199901010800001291
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    1. Pray, Carl E. & Fuglie, Keith O. & Johnson, Daniel K.N., 2007. "Private Agricultural Research," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 49, pages 2605-2640, Elsevier.
    2. Fuglie, Keith & Ballenger, Nicole & Rubenstein, Kelly Day & Klotz, Cassandra & Ollinger, Michael & Reilly, John & Vasavada, Utpal & Yee, Jet, 1996. "Agricultural Research and Development: Public and Private Investments Under Alternative Markets and Institutions," Agricultural Economic Reports 262031, United States Department of Agriculture, Economic Research Service.
    3. Wallace HUFFMAN & Richard E. JUST, 1995. "Transaction Costs, Fads, And Politically Motivated Misdirection In Agricultural Research," Staff Papers 277, Iowa State University Department of Economics.
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    1. Huffman, Wallace E., 1999. "New Insights on the Organization of Agricultural Research: Theory and Evidence for Western Developed Countries," ISU General Staff Papers 199907010700001319, Iowa State University, Department of Economics.
    2. Marc T. Law & Joseph M. Tonon & Gary J. Miller, 2008. "Earmarked: The Political Economy of Agricultural Research Appropriations," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(2), pages 194-213.
    3. Huffman, Wallace & Evenson, Robert E., 2003. "Determinants of the Demand for State Agricultural Experiment Station Resources: A Demand-System Approach," Staff General Research Papers Archive 11175, Iowa State University, Department of Economics.
    4. Valentina Cristiana MATERIA & Roberto ESPOSTI, 2010. "Modelling Agricultural Public R&D Cofinancing Within A Principal-Agent Framework. The case of an Italian region," Working Papers 347, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    5. Esposti, Roberto & Materia, Valentina, 2015. "The determinants of the public R&D cofinancing rate An empirical assessment on agricultural research," 2015 Conference, August 9-14, 2015, Milan, Italy 211624, International Association of Agricultural Economists.
    6. McCunn, Alan & Huffman, Wallace E., 1998. "Convergence in U.S. TFP Growth for Agriculture: Implications of Interstate Research Spillovers for Funding Agricultural Research," ISU General Staff Papers 199808010700001304, Iowa State University, Department of Economics.
    7. Klerkx, Laurens & Leeuwis, Cees, 2008. "Institutionalizing end-user demand steering in agricultural R&D: Farmer levy funding of R&D in The Netherlands," Research Policy, Elsevier, vol. 37(3), pages 460-472, April.
    8. Wallace E. Huffman & Richard E. Just, 1999. "The organization of agricultural research in western developed countries," Agricultural Economics, International Association of Agricultural Economists, vol. 21(1), pages 1-18, August.
    9. Kelly Day Rubenstein & Paul W. Heisey & Cassandra Klotz-Ingram & George B. Frisvold, 2003. "Competitive Grants and the Funding of Agricultural Research in the United States," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 352-368.
    10. Day-Rubenstein, Kelly A. & Heisey, Paul W. & Klotz-Ingram, Cassandra & Frisvold, George B., 2000. "Competitive Grants And The Funding Of Agricultural Research In The U.S," 2000 Annual meeting, July 30-August 2, Tampa, FL 21863, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Shew, Aaron & Nalley, Lawton Lanier & Durand, Alvaro & Moldenhauer, Karen, 2018. "The Benefits of Public Rice Breeding," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266322, Southern Agricultural Economics Association.
    12. Ornella W. Maietta & Cristian Barra & Roberto Zotti, 2017. "Innovation and University-Firm R&D Collaboration in the European Food and Drink Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 749-780, September.
    13. Klerkx, Laurens & Leeuwis, Cees, 2008. "Matching demand and supply in the agricultural knowledge infrastructure: Experiences with innovation intermediaries," Food Policy, Elsevier, vol. 33(3), pages 260-276, June.
    14. Davis, George C. & Perusquia, Ernesto, 2002. "Student Numbers And Sustaining Courses And Fields In Ph.D. Programs," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 34(3), pages 1-16, December.
    15. Yee, Jet & Huffman, Wallace E., 2001. "Rates Of Return To Public Agricultural Research In The Presence Of Research Spillovers," 2001 Annual meeting, August 5-8, Chicago, IL 20628, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Cox, Michael & Mincey, Sarah & Ruseva, Tatyana & Villamayor-Tomas, Sergio & Fischer, Burney, 2013. "Evaluating the USFS State and Private Forestry Redesign: A first look at policy implications," Ecological Economics, Elsevier, vol. 85(C), pages 35-42.
    17. Tegene, Abebayehu & Effland, Anne & Ballenger, Nicole & Norton, George W. & Essel, Albert E. & Larson, Gerald & Clarke, Winfrey, 2002. "Investing in People: Assessing the Economic Benefits of 1890 Institutions," Miscellaneous Publications 33548, United States Department of Agriculture, Economic Research Service.
    18. Oscar Alfranca, 2001. "Scientific policy and free riders," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 7(1), pages 147-158, February.
    19. Acosta, Manuel & Coronado, Daniel & Toribio, Mª Rosario, 2011. "The use of scientific knowledge by Spanish agrifood firms," Food Policy, Elsevier, vol. 36(4), pages 507-516, August.
    20. Huffman, Wallace, 2005. "Developments in the Organization and Finance of Public Agricultural Research in the United States, 1988-1999," Staff General Research Papers Archive 12485, Iowa State University, Department of Economics.
    21. Sparger, John Adam & Norton, George W. & Heisey, Paul W. & Alwang, Jeffrey, 2013. "Is the share of agricultural maintenance research rising in the United States?," Food Policy, Elsevier, vol. 38(C), pages 126-135.
    22. Materia, V.C. & Pascucci, S. & Kolympiris, C., 2015. "Understanding the selection processes of public research projects in agriculture: The role of scientific merit," Food Policy, Elsevier, vol. 56(C), pages 87-99.

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