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 Both at home and abroad, the driving force behind agricultural
research agenda-setting is now growth in private sector R&D.
While the level of public funding for research has leveled
off since the mid-1980s, private research expenditures, bolstered
by strengthened intellectual property rights, tripled in real
terms between 1960 and 1996 and continue to grow. Research
priorities are also affected by the shift in focus toward
the agricultural inputs supply industries particularly biotechnology.
These trends influence the development of technology available
to producers and the pace at which that technology is adopted.
ERS is at the forefront of economic research on agricultural
R&D and its effects on the adoption of production technologies.
The reports featured here add to that knowledge base.
Questions about future sources of technology for increasing
agricultural production are particularly appropriate for Asia
because of the dynamic changes in population and incomes occurring
there. The extent of private agricultural research in Asia,
and the degree to which it offsets declining public funding,
is shown by comparing agribusiness firm R&D investments
in selected Asian countries in 1996 and 1998 with investment
levels in the mid-1980s. Over this period, private sector
R&D grew in real terms in the countries sampled, but not
at the level necessary to keep pace with the growing demand
for agricultural products. Foreign firms made important contributions
to private research in countries sampled. Liberalization of
industrial policy and investments in public research helped
induce this growth, but patents and tax incentives have had
little impact, so far.
Other recent developments reflect the increasing importance
of private sector research. In the wake of increased intellectual
property protection, globalization, and reduced public funding
in many countries, the balance of plant-breeding activity
has shifted from the public to the private sector. Several
economic factors influence the relative shares of public versus
private sector plant breeding activity, with varying results
over time and across crops and countries. Agricultural biotechnology
has also been advancing very rapidly. Increasing private-sector
research investment, changes in the composition of private-sector
R&D, and consolidation in the agricultural input industry
affect the growth in agricultural biotechnology. Consolidation
in the agricultural biotechnology industry is reflected by
recent mergers, acquisitions, and strategic collaborations,
as well as the emergence of "life science" conglomerates.
Private-sector ownership of agricultural biotechnologies may
be an important factor in their extremely rapid adoption in
production agriculture.
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