Agricultural Knowledge, Science and Technology: Investment and Economic Returns | 499
ers 13 than sub-Saharan Africa and Latin America 18 each. Forestry, isheries, and postharvest accounted for 4
to 6 each. The remaining 9 of the research staff in the developing world conducted research in other agriculture
related sciences. For all three regions, fruits and vegetables are among
the major crops being researched. Unsurprisingly, rice is a relatively important crop in the Asia-Paciic region while
maize has high importance in Latin America. The allocation of resources above does not cover the full
scope of AKST, e.g., areas of importance in the future may include bioenergy, climate change, transgenics and biodiver-
sity. The Stern Review on the Economics of Climate Change Stern, 2007 concludes that an annual investment of 1
of global GDP is required to mitigate the negative effects of climate change. Although economists argue whether the ig-
ures in the Stern review are right, most agree that the cost of failing to tackle climate change will so vastly outweigh the
cost of succeeding that further reinement of the calculations are largely irrelevant to the political and investment choices
that must be made now. Among these could be the creation of incentives for investment in low-carbon technologies.
Some limited information on the budget levels in bio- energy RD in OECD countries is available through the
International Energy Agency IEA. Total RD budgets for bioenergy are estimated to have increased almost three-fold
since 1992 to a total of 271 million in 2005 international dollars in 2005. Despite the increased interest in renew-
able energy and energy-saving technological innovations to mitigate climate change, total budgets on energy RD
in OECD countries, in adjusted terms, have remained lat since 1992. As a result, the share of bioenergy RD in total
energy RD investments also grew almost threefold during 1992-2005 IEA, 2006.
In this chapter, public agricultural research includes research performed by government, higher education, and
nonproit agencies. There are substantial differences among rate in total spending in China and India increased during
the 1990s. This was in part due to an increase in total agri- cultural RD spending in both countries during the second
half of the 1990s, which relects new government policies to revitalize public agricultural research and improve its com-
mercialization prospects. Two other regions, Latin America and the Caribbean, and West Asia and North Africa, both
experienced relative less growth in total spending during the 1990s 2.0 and 3.3, respectively. In contrast, the increase
in total spending in sub-Saharan Africa decreased in the 1990s from 1.3 to 0.8 compared to a decade earlier. An
even more severe drop in spending is found in many sub- Saharan African countries. In about half of the 24 countries
for which time series data were available, the public sector spent less on agricultural RD in 2000 than 10 years ear-
lier. Noteworthy is the decline in total agricultural RD
spending among the rich countries; during the 1990s total spending declined by an annual rate of 0.6. Speciically
Japan, and to a lesser degree a few European countries, re- duced their investments in agricultural research. Support for
publicly performed agricultural research among rich coun- tries has declined over a long period in time due to changes
in government spending priorities and a shift toward pri- vately performed agricultural RD. These slowdowns in
agricultural RD spending may curtail the future spillovers of technologies from rich to poor countries Pardey et al.,
2006a see 8.2.7. The allocation of resources among various lines of
research is a signiicant policy decision and takes place at different levels and, in theory although not always in
practice, follows the priorities set across commodity and multidisciplinary research programs. More than one half of
the full-time equivalent fte researchers in a sample of 45 developing countries conducted crops research while 15
focused on livestock and 8 on natural resources research Table 8-2. Asia-Paciic had relatively less livestock research-
Figure 8-2. Growth rates of public agricultural RD spending. Source: Pardey et al., 2006b based on Agricultural
Science and Technology Indicators ASTI data at www.asti.cgiar.org
Notes: See Table 8-1. Annual growth rates were calculated using the least-squares regression method, which takes into account all observations in a period. This results in growth rates that reflect general trends that are not disproportionately influenced by
exceptional values, especially at the end point of the period.
500 | IAASTD Global Report
focus solely on the provision of input technologies or tech- nological services for agricultural production with most of
these technologies produced in the industrialized world. Private sector share of total agricultural research invest-
ments are estimated at 37 Table 8-3. Most of which was performed in the industrialized countries 94 where they
spent on average more on agricultural research than the countries and between regions in the structure of the public
research sector Figure 8-3. Public research in the United States is done mainly in state agricultural experiment stations
located primarily in colleges of agriculture and in federally administered, but often regionally located, laboratories. A
large share of public agricultural RD in Asia-Paciic and Latin America is conducted by government agencies about
three-quarters of the total. This is similar to the govern- ment agency share in a 27-country sub-Saharan African to-
tal. A small, but growing proportion of public agricultural research in Latin America and sub-Saharan Africa is con-
ducted by nonproit institutions. Nonproit institutions are often managed by independent boards not directly under
government control. Many are closely linked to producer organizations from which they receive the large majority of
their funding, typically by way of taxes levied on production or exports see 8.3.3.
8.1.1.2 Private sector spending
Agricultural RD investments by the private sector have grown in recent years and in the industrialized world now
account for more than half of the sum of the public and private research investments. Although private sector per-
formed agricultural RD appears to have increased in some developing countries, overall the role of the private
sector is still small and will likely remain so given weak funding incentives for private research. In addition, many
of the private sector RD activities in developing countries
Table 8-2.
Commodity focus by main research area, various years. Asia-Pacific
10, 200203 sub-Saharan
Africa 26, 200001
Latin America 9, 1996
Total developing
countries 45
Major commodity area percent
Crops 52.5
48.1 53.5
52.1 Livestock
13.2 17.8
17.9 14.7
Forestry 6.5
6.1 4.8
6.2 Fisheries
5.8 4.8
4.3 5.4
Post-harvest 3.6
6.5 3.9
4.1 Natural Resources
8.6 7.1
8.8 8.4
Other 9.8
9.5 6.7
9.2 Major crops
Wheat 6.2
4.9 4.3
5.7 Rice
18.0 7.6
6.1 14.4
Maize 5.4
8.0 13.8
7.3 Cassava
0.6 5.8
2.2 1.6
Vegetables 9.4
9.0 18.6
11.0 Fruits
11.7 11.0
17.4 12.7
Sugarcane 5.0
4.9 3.7
4.7 Coffee
0.6 3.0
6.3 2.0
Other 43.3
45.7 27.4
40.7
Note: Shares based on allocation of full-time equivalent researchers. Source: ASTI database, 2007.
Figure 8-3. Organizational orientation of public agricultural
RD, 1981, 1991, 2000.
Source: Pardey et al., 2006b based on ASTI data.
Note: The number of countries included in regional totals is shown in parentheses. The reported shares for Japan and the United States may
understate the role of nonprofit institutions. na indicates not available.
Agricultural Knowledge, Science and Technology: Investment and Economic Returns | 501
private research in the UK and US, but was less important in Australia, and almost negligent in New Zealand Alston
et al., 1999. A survey of seven Asian countries during the mid-1990s
showed that the share of private investments had grown in three countries China, India, and Indonesia even more than
the increases in public sector investments Pray and Fuglie, 2001. However, this growth was uneven across subsectors.
Total investments in the agricultural chemical industry in Asia, which includes mostly pest control chemicals and, to
a lesser extent, fertilizer and biotechnology, tripled during mid-1980s and mid-1990s. Private spending on livestock
research also grew considerably, but growth was substan- tially slower in other subsectors such as plantation crops
and machinery. Both locally-owned and multinational irms played similar important roles in agricultural RD. Mul-
tinational irms accounted for an average of 45 of total private research spending in the seven Asian countries, but
with substantial differences among countries. Almost all re- search in China by truly private irms rather than govern-
public sector. In contrast, only 8 of total spending in the developing world was conducted by private irms with the
remaining 92 by public agencies. In the developing world, private sector involvement in agricultural research was rela-
tively higher in the Asia and Paciic region with an average of 11 in 2000 Pardey et al., 2006b.
Private sector involvement in agricultural RD in OECD countries differs from one country to another. In
2000, more than 80 of total agricultural RD spending in Belgium, Sweden, and Switzerland was done by the private
sector. In contrast, private sector shares were below 25 in Australia, Austria, Iceland, and Portugal that same year.
Private and public sectors are involved in different types of research. In 1993 only 12 of the private research in ive
industrialized countries Australia, the Netherlands, New Zealand, UK, and the US focused on farm-oriented technol-
ogies compared to 80 in the public sector. Food and other postharvest accounted for 30 to 90 of agricultural RD
investments in Australia, Japan, the Netherlands, and New Zealand. Chemical research accounted for 40 and 75 of
Box 8-1. Plant breeding and biotechnology research.
Trends in multinational plant and biotech research
One of the most rapidly growing areas of private sector agricul- tural research has been the plant biotech area. This research
started in the 1970s, increased very rapidly in the late 1980s and 1990s to over a billion dollars of research in response to the tech-
nological opportunities offered by the breakthroughs of cellular and molecular biology and also due to stronger intellectual prop-
erty rights particularly in the US. Some of this change was due to companies shifting research resources from chemical research to
biological research. Since 1999, several of the six largest biotech firms, which
dominate private biotech research worldwide, have reduced their agricultural biotechnology research, and in the aggregate agricul-
tural biotechnology research expenditures probably stagnated. Monsanto reduced its research expenditure, which is about 85
agricultural biotechnology and plant breeding, from US588 mil- lion in 2000 to US510 million in 2003 before increasing back
to 588 million in 2005.
Syngenta’s plant science RD expendi- tures declined from 161 million in 2000 to 109 million in 2003
and to 100 million in 2005 Syngenta, 2006. In contrast Bayer and BASF seem to be increasing their investments in biotech.
Bayer purchased Aventis Crops Sciences, which had a major biotech research program, in 2001. Bayer has made a substan-
tial investment in Agricultural biotech RD since then and now spends about 80 million on seed and biotech research expenses
Garthof, 2005. BASF spent approximately 82 million in 2004 Garthof, 2005. They recently 2006 acquired the Belgium bio-
tech firm CropDesign and have committed themselves to spend- ing 320
million on biotech research over the new three years Nutra Ingredients, 2006
.
Public sector investment in agricultural biotech growing rap- idly in some large developing countries
Despite the controversy about transgenic crops and generally sluggish investments in biotechnology, government investments
in agricultural biotechnology research and development are grow- ing rapidly in some large developing countries. The most dramatic
growth in public biotech investments is in China from under 300 million yuan in 1995 to over 1.6 billion yuan in 2003 equivalent to
US 200 million. This 1.3 billion yuan increase accounts for between 25 to 33 of the increase in all agricultural research in the same time
period Huang et al., 2005. In addition Chinese cities and provinces have announced major government programs to commercialize the
results of public sector biotech research such as the new center in Beijing, which will invest US160 million over the next three years
to nurture 100 companies and 500 labs Gong, 2006.
National governments in Brazil, Malaysia, and South Africa are also making major investments in agricultural biotech research
and some provincial governments such as Sao Paolo in Brazil and Andhra Pradesh in India are also making substantial investments.
In July 2006 the Brazilian government announced that it would invest US3.3 billion over the next 10 years to develop biotech-
nology for health, industry, and agriculture checkbiotech.org. Malaysia announced that it would invest US3.12 billion in agri-
culture in the next plan period and that agricultural biotechnology would play a major role Government of Malaysia, 2006. Indian
officials said in the spring of 2006 that it will invest US100 million and the US will add US24 million on agricultural biotechnology
in India Jayaraman, 2006. South Africa launched Plantbio www. plantbio.org.za in late 2004 to support the commercialization of
plant biotech products.
502 | IAASTD Global Report
ence spending while in the other regions in the developing world these shares were considerably lower 9 to 12. In
the industrialized world spending in agricultural RD was only 4 of the total ST investments.
8.1.1.3 Intensity of research
In order to place a country’s agricultural RD efforts in an internationally comparable context, measures other than
absolute levels of expenditures and numbers of researchers are needed, e.g., the intensity of investments in agricultural
research. The most common research intensity indicator is a measure of total public agricultural RD spending as a
percentage of agricultural output AgGDP.
5
The industrial- ized countries as a group spent 2.36 on public agricultural
RD for every 100 of agricultural output in 2000, a large increase over the 1.41 they spent per 100 of output two
decades earlier, but slightly down from the 1991 estimate of 2.38 Figure 8-4. This longer-run increase in research
intensity is in stark contrast to the group of developing countries; this group has seen no measurable growth in the
intensity of agricultural research since 1981. In 2000, the developing world spent just 53 cents on agricultural RD
for every 100 of agricultural output. Agricultural output grew much faster in the developing countries as a group
than in the industrialized countries. As a result, intensity ratios remained fairly stable for the developing regions as
a group despite overall higher growth rates in agricultural RD spending in the developing countries, and the inten-
sity gap between rich and poor countries has widened over the years. More than half of the industrialized countries for
5
Some exclude for-proit private agricultural research expen- ditures when forming this ratio, presuming that such spending
is directed toward input and postharvest activities that are not relected in AgGDP. For reasons of consistency with these other
studies, we excluded national and multinational private compa- nies but not nonproit institutions from the calculated intensity
ratios.
ment-owned, commercial irms was by multinational irms in the mid-1990s while in Malaysia only 10 of private
sector investment from multinationals. Foreign irms were concentrated in the agricultural chemical and livestock sub-
sectors; i.e., those with the highest growth rates Pray and Fuglie, 2001.
In SSA, only 2 of total agricultural RD is conducted by the private sector.
3
Almost two-thirds of the region’s pri- vate research was done in South Africa. Most irms in SSA
have few research staff with low total spending and they focus on crop improvement research, often export crops
Beintema and Stads, 2006.
4
Similarly as in the Asian re- gion, multinationals and locally owned companies play a
similarly important role. Given the tenuous market reali- ties facing much of African agriculture, it is unrealistic to
expect marked and rapid development of locally conducted private RD. Yet there may be substantial potential for tap-
ping into private agricultural RD done elsewhere through creative public-private joint venture arrangements Osgood,
2006. In 2000, total investments in all sciences conducted by
the public and private sectors combined were over 700 billion in 2000 international prices Table 8-4. The re-
gional shares in the global total differ substantially from the shares in agricultural RD spending. Industrialized coun-
tries combined accounted for about 80 of total science and technology ST spending while SSA’s share was less
than one percent. There are also considerable differences in the shares of public and private agricultural RD spending
in total ST spending. Agricultural RD spending in SSA accounted for more than one-third of the region’s total sci-
3
The private sector does, however, play a stronger role in funding agricultural research, as opposed to performing research itself.
Many private companies contract government and higher-educa- tion agencies to perform research on their behalf.
4
Examples are cotton in Zambia and Madagascar and sugar cane in Sudan and Uganda.
Table 8-3.
Estimated public and private agricultural RD investments, 2000. Expenditures
Shares
Public Private
Total Public
Private millions 2000 international dollars
percent Asia Pacific
7,523 663
8,186 91.9
8.1 Latin America
Caribbean 2,454
124 2,578
95.2 4.8
sub-Saharan Africa 1,461
26 1,486
98.3 1.7
West Asia North Africa 1,382
50 1,432
96.5 3.5
Developing countries, subtotal
12,819 862
13,682 93.7
6.3 Higher-income countries,
subtotal 10,191
12,086 22,277
45.7 54.3
Total 23,010
12,948 35,958
64.0 36.0
Source: Pardey et al., 2006b based on ASTI data.
