What are the incentive mechanisms for increasing investment in agricultural R&D?

In the paper Agricultural R&D policy: a tragedy of the international commons, (Authors: P., G. Pardey; J., M. Alston; J., S. James Publisher: AgEcon Search, September 2008, University of Minnesota, 42 pages) the factors contributing to persistent global underinvestment in agricultural R&D are described from a developing country perspective. Additionally, incentive mechanisms for increasing rates of investment in agricultural R&D are also discussed.

The paper notes that under-funding of agricultural R&D in developing countries (DCs) is clearly problematic, and the stage is set for the problem to worsen. In the past, DCs benefited from technological spillovers from developed countries. However, because of changes occurring in developed countries, spillovers from developed countries may not be available to DCs in the same extent as before. Decreasing spillover potential is caused by several trends:

• the types of technologies being developed may no longer be as readily applicable to DCs as they were in the past
• those that are applicable may not be as readily accessible
• technologies that are applicable and accessible are likely to require more substantial local development, calling for more extensive forms of scientific R&D than in the past.

Africa has almost 30 percent more public agricultural researchers than the United States and 50 percent more than India, but the training of these researchers continues to lag well behind those in the United States (and well behind those researchers working elsewhere in the developing world). Approximately 25 percent of research full-time equivalents (FTEs) in sub-Saharan Africa have PhDs, compared with 100 percent in the United States and 63 percent in India. (p.14)

African public agricultural research agencies are heavily skewed to the small end of the size distribution, with three quarters of these agencies employing fewer than 20 researchers, whereas one third of the public agencies in India and almost all the public agencies in the United States employ more than 100 researchers. The small size of many research agencies in India and particularly in sub-Saharan Africa makes it difficult to exploit the economies of scale that characterize the production of knowledge. Moreover, the lion’s share of public research in the United States is now performed by universities, while the average university share is less than 20 percent in sub-Saharan Africa and approximately 45 percent in India. (p.15)

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