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Published January 21, 2013, 09:45 AM

Shortchanging ag research?

Too little money is being invested globally in agricultural research, experts say. Serious questions have been raised about whether the world can increase food production sufficiently to meet burgeoning demand.

By: Jonathan Knutson, Agweek

Catherine Woteki, the U.S. Department of Agriculture’s chief scientist, sees two powerful trends that both connect and conflict:

•Global population and food needs are soaring, and the world will need to produce roughly as much food in the next 50 years as has been consumed since civilization began.

•U.S. public sector spending on agricultural research is flat — going backward, actually, when inflation is factored in.

“For much of the last two decades, we’ve had really a stagnant level of investment,” Woteki says. “In the last couple of years, we’ve had a decrease that’s been very substantial.

“We are at a very critical time,” she says.

She’s not alone in that judgment.

A wide range of experts, including the Presidential Council of Advisors on Science and Technology, say public spending on ag research is at worrisomely low levels.

The “nation’s agricultural research enterprise is not prepared to meet the challenges that U.S. agriculture faces in the 21st century,” according to the Presidential Council’s December 2012 report, which concluded that the federal government needs to increase ag research investments by $700 million per year. The federal government spends roughly $4 billion a year on ag research now.

Federal budget problems could torpedo any such increase and even cut into existing spending, many in agriculture worry.

“It’s a concern,” says Erik Younggren, a Hallock, Minn., farmer and president of the National Association of Wheat Growers.

Some other developed countries also are scaling back on public sector spending on ag research, when inflation is considered, says Philip Pardey.

Pardey, a professor of applied economics and director of the International Science and Technology Practice and Policy Center, both at the University of Minnesota, has studied world agricultural research and development for 25 years.

“My sense is we’re not heading for a calamity, but there is cause for concern,” he says. Growing population — the world is expected to add 2 billion people by 2050 — is only part of it. Hundreds of millions of people globally will move into the middle class in coming years, and their food needs will grow. The combination of more people and the growing middle class is expected to increase world food needs by 70 to 100 percent by 2050.

On the production side, water scarcity and limited ability to bring new farmland into production are huge concerns, experts say.

Reasons for optimism

To be sure, there are encouraging developments in global spending on ag research.

One bright spot is private sector spending. It rose to $11 billion in 2010 from $5.6 billion in 1994 — an annual growth rate of 1.4 percent after inflation is factored in, according to a report from the U.S. Department of Agriculture’s Economic Research Service. The most rapid growth came in crop seed and biotechnology traits.

The United States leads the world in private sector spending on ag research, accounting for more than one-third of the world total.

But some of the money spent by U.S. companies is for ag research that will be applied outside the country, Pardey says.

Also, much of the private-sector spending is for research on food processing, not food production, he and other experts note.

Another reason for optimism, at least from a global perspective, is the fact that several countries, most notably China and India, are stepping up public sector spending on ag research.

China has even surpassed the U.S. In 1960, the U.S. led the world with $1.2 billion of public spending on ag research, triple the $433 million of China, which ranked second. In 2009, China led the world with $5.8 billion, topping the $4.5 billion spent by the second-place U.S.

Of course, as experts point out, America’s competitive advantage in ag lessens when other countries outspend it on ag research. Fifty years ago, America accounted for 21 percent of global public sector spending on ag research. Today, the U.S. share is only 13 percent, according to information from Pardey.

And there is a third reason for optimism about spending on research. There are indications, not yet supported by hard data, that some of the world’s poorest countries are beginning to spend more on ag research, says Nienke Beintema, head of the Agricultural Science and Technology Indicators initiative for the International Food Policy Research Institute, based in Washington, D.C.

Unfortunately, such increases are coming after many years of limited spending and a great deal of catching up is needed, she says.

Why not more spending?

A number of factors are working against spending on ag research. The biggest may be complacency, at least in the United States.

“We have the most productive agricultural system in the world,” says Ken Grafton, vice president for agricultural affairs at North Dakota State University and a former plant breeder. “We’re the envy of the world in research and production.

“I suspect people become a little complacent,” he says.

The United States hasn’t had food shortages since the Dust Bowl (in the 1930s), and many Americans take a stable food supply for granted, Woteki says.

Spending on ag research also can be a hard sell to policymakers because the spending can take years to pay off, experts say.

By some estimates, a minimum of 10 years is needed before ag research begins to pay for itself. By other estimates, as many 50 years are required before its full benefits are achieved.

Ag research has been referred to as “slow magic,” the benefits of which don’t occur right away, then endure for many years.

But, $1 spent on ag research typically results in at least $10 of economic benefits, according to the Presidential Council’s report on ag research.

Nonetheless, that slow payback can be daunting to policymakers, especially ones in poor countries, Beintema says.

Investing in schools, roads and clinics, rather than ag research, may seem more prudent, she says.

Public sector spending on ag research in the U.S. also is hampered because it’s not always a priority for farmers and farm groups, Pardey says.

“There’s a lot of rhetoric” about the need for spending on ag research. But producers often place much greater emphasis on securing funding for programs such as federal crop insurance, he says.

Private sector spending

Spending by private companies, often in collaboration with universities, is growing.

Monsanto, the agribusiness giant, in 2011 gave more than $21 million to 146 universities nationwide for research, licensing agreements, field trials and scholarships, among other things, according to the company.

Last September, Monsanto announced a partnership in wheat breeding with North Dakota State University.

Both Grafton and Connie Armentrout, Monsanto’s director of academic licensing, says the partnership, though still in its early stages, is going well for NDSU and Monsanto.

To be successful, such partnerships “have to bring value to both parties,” Armentrout says.

Grafton says the wheat-breeding partnership with Monsanto draws on the strengths of both organizations.

The number of private and public partnerships at land-grant universities probably will continue to grow as less federal money for ag research becomes available, Grafton says.

“The underlying principal of land-grant universities is improving society. As long as we don’t lose sight of that, I don’t think it ( collaboration) is problematic. That’s my own personal opinion,” he says.

Grafton adds that state government financial support for ag research is unusually strong in North Dakota.

The public sector’s role in ag research remains vital, Woteki says.

Public spending on ag research focuses on fundamental, long-term needs, with companies building on that research, she says.

That’s true globally, too, Pardey says.

“The world is still pretty dependent on public spending for agricultural R&D,” he says.

Private-sector spending is concentrated on a handful of crops, particularly corn and soybeans, Pardey and others say.

Some people wonder if private companies will cut back on spending for ag research if crop prices fall sharply.

“I hope we don’t have to find that out,” Armentrout says.

But whatever happens with crop prices, “We’re always looking for ways to meet farmers’ needs,” she says.

‘Maintenance spending’

By all accounts, ag research is costly.

Ag research, particularly when it’s directed to production, “costs more dollars than it used to. It’s just like farming. Producers have to spend more money on their operations,” says Don Tanaka, a retired soil scientist who spent more than 20 years with the USDA Agricultural Research Service station in Mandan, N.D.

So-called “maintenance spending” is part of the reason.

“You have to invest to maintain past gains, as well as to promote future gains,” Pardey says.

For instance, crop diseases such as stem rust in wheat can hammer yields, reducing or even eliminating yield gains achieved from earlier research.

Unless time and money is invested to battle those crop diseases, those past gains will be lost, Pardey says.

Maintenance spending can account for as much as 40 to 60 percent of all spending on ag research, according to estimates.

Bringing in young blood

Many ag researchers, both in the United States and other countries, are nearing retirement age, experts say.

Attracting talented young scientists to ag research can be difficult in poor countries, where other types of research may be more profitable and seem more exciting, Beintema says.

Bringing in a new generation of ag researchers is important in the United States, too, and funding is the key, Woteki says.

“It’s a truism in the scientific community. If there is funding for research, you’ll be able to attract good people to work on those problems,” she says.

Breakthroughs achieved by a new generation of ag researchers would help a new generation of farmers, Pardey says.

Unless spending on ag research increases, “The sons of today’s farmers will bear the brunt of these bad decisions,” he says.

Because the United States did a good job of ag research for many decades, U.S. agriculture can temporarily withstand recent spending cuts, Pardey says.

“We were doing pretty well until 10 or 15 years ago. We had a big stock of knowledge. You can nibble on that. But eventually it (not spending enough) catches up on you,” he says.

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