Public-Private Collaboration in Agricultural Research: New Institutional Arrangements and Economic Implications

355 Pages·13.019 MB·English

Public-Private Collaboration
in Agricultural Research
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Pu blic-Private
Col lab oration
in Agricultural
Research
NEW INSTITUTIONAL
ARRANGEMENTS AND ECONOMIC
IM PLIC AT1 0N S
Edited by
KEITH 0. FUGLIE AND
DAVID E. SCHIMMELPFENNIG
Iowa State University Press / Ames
Keith 0. Fuglie is an economist with the International Potato Center, Bogor, Indonesia.
Formerly, he was senior economist for agriculture and natural resources on the President's
Council of Economic Advisers and an agricultural economist with the USDA's Economic
Research Service. Fuglie, who has lived and worked in Tunisia, Thailand, Nigeria, and Kenya,
received his Ph.D. in agricultural and applied economics from the University of Minnesota.
David E. Schimmelpfennigi s the program leader in agricultural research and development at
the USDA's Economic Research Service in Washington, DC, where he also teaches in the USDA
graduate school. Schimmelpfennig has Iowa roots, lived in South Africa, and received his Ph.D.
in economics from Michigan State University.
0 2000 Iowa State University Press
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@ Printed on acid-free paper in the United States of America
First edition, 2000
Library of Congress Cataloging-in-PublicationD ata
Public-private collaboration in agricultural research: new institutional arrangements and
economic implications / edited by Keith 0. Fuglie and David E. Schimmelpfennig.-1st ed.
p. cm.
Includes bibliographical references.
ISBN 0-8138-2789-2
1. Agriculture-Research-United States. 2. Agriculture-Research-Economic
aspects-United States. 1. Fuglie, Keith 0. Il. Schimmelpfennig, David E.
S541.P85 1999
630'.7'20734c21 99-047027
The last digit is the print number: 9 8 7 6 5 4 3 2 1
CONTENTS
Foreword by Susan E. Offutt vii
List of Tables ix
...
List of Figures Xlll
Acknowledgments xv
IN TRODUCTIO N
1 Overview of the Volume
Keith 0. Fuglie and David E. Schirnrnelpfennig 3
I. INNOVATIONS IN FINANCING AGRICULTURAL RESEARCH
2 Trends in Agricultural Research Expenditures in the
United States
Keith 0. Fuglie 9
3 Financing Agricultural R&D in Rich Countries:
What’s Happening and Why
Julian M. Alston, Philip Pardey, andVincent H. Smith 25
G.
4 Financing Agricultural Research with Prior Distortionary
Taxes and Subsidies
George B. Frisvold and Stephen J. Vogel 55
II. PUBLIC AND PRIVATE INVESTMENTS IN
PLANT AND ANIMAL RESEARCH
5 A National Strategy for Plant Breeding in the United States
Kenneth J. Frey 77
6 The Role of Federal, State, and Private Institutions in
Seed Technology Generation
Jose Falck-Zepeda and GregTraxler 99
V
vi Contents
___
7 Public and Private Investments in Animal Research
Keith 0.F uglie, Clare A. Narrod, and Catherine Neurneyer 117
Ill. INSTITUTIONS FOR PUBLIC-PRIVATE COLLABORATION
IN AGRICULTURAL RESEARCH
8 The CRADA Model for Public-Private Research
and Technology Transfer in Agriculture
Kelly Day-Rubenstein and Keith 0.F uglie 155
9 The Research Consortium Model for Agricultural Research
Mary K. Knudson 175
10 State Agricultural Experiment Stations and Intellectual
Property Rights
Mary K. Knudson, Richard L. Lower, and Richard Jones 199
IV. INTERNATIONAL SPILLOVERS IN
AGRICULTURAL RESEARCH
11 Agricultural Technology Spillovers
Robert E. Evenson 219
12 Significance of International Spillovers from Public
Agricultural Research
David E. Schimmelpfennig and Colin G.Thirtle 245
13 The Private Sector and International Technology Transfer
in Agriculture
Carl E. Pray and Keith 0.F uglie 269
14 Assessing U.S. Benefits of Training Foreign
Agricultural Scientists
Nicole Ballenger and Cassandra Klotz-lngram 30 1
CONC LU S I0N
15. Public-Private Collaboration in Agricultural Research:
The Future
John M. Reilly and David E. Schimmelpfennig 325
Contributors 335
Index 343
FOREWORD
FORM ORE than 130 years, the United States has looked to the publicly funded
agricultural research institutions at the Department of Agriculture and the
land-grant universities as well-springs of the scientific thought and techno-
logical innovation that have fueled development of this nation’s remarkable
food and agricultural sector. Estimates of the high rates of return to the pub-
lic’s support of this research at the state and federal levels strongly reinforce
the idea that increased spending would garner an even higher level of benefits
for farmers and consumers alike. However, at a time when budget austerity
has been accepted as the price of achieving fiscal discipline, the prospects for
increases in federal spending, anyway, are not bright. While holding steady in
real terms over the past decade, public funding for agricultural research is
now outstripped by outlays by the private sector, likely the only source of fu-
ture dynamism and increasing resources.
Public spending on agricultural research has reached a plateau at a time of
extraordinary promise and extraordinary challenge. The development of the
field of molecular biology and the subsequent expansion of possibilities for
agricultural science present opportunities for solving some of the most press-
ing problems of farm productivity, natural resource management, and the bet-
terment of human nutrition. What lies ahead is the global challenge to feed an
ever larger population adequately and with an improved quality of diet. How
can one ensure that scientific possibility is translated into the reality of more
and better food? At least part of the answer lies, as it has historically, in lead-
ership from the public agricultural sector in mapping for itself a wise and pro-
ductive role and in recognizing and promoting the complementary action of
private sector firms.
Toward the end of better public decision making on agricultural research
policy, USDA’s Economic Research Service (ERS) pursues investigations of
the funding, conduct, and outcome of public and private sector farm and food
research. The ERS emphasizes identification of the economic causes and con-
sequences of changes in public and private research financing and in the terms
of technology transfer between firms and among nations. In 1996, ERS pub-
lished a widely acclaimed report, Agricultural Research and Development:
Public and Private Investments under Alternative Markets and Institutions,
vii
viii Foreword
that reviewed the economic performance of past investments in agricultural
research and documented the growing capacity of the private sector in devel-
oping new technology for the U.S. agricultural and food sectors. To further
explore the implications of these trends for agricultural research policy, in Au-
gust 1997 ERS and the Farm Foundation jointly convened the workshop Pub-
lic-Private Collaboration in Agricultural Research: New Institutional Arrange-
ments and Economic Implications. Participants in the workshop came from a
range of institutions: from ERS and other USDA research agencies; from uni-
versities; from private firms; and from the nonprofit sector. The chapters im-
mediately following document the work presented by ERS researchers and
their collaborators from across the nation.
The current volume expands our knowledge of the changing structure of
the agricultural research system in three important ways. First, it describes
and compares public and private agricultural research investments in consid-
erably more detail than was previously available-down to the commodity
level for plant and animal breeding. Second, it assesses several new institu-
tional innovations that have arisen to strengthen public-private collaboration
in research. And third, it explores the international dimension of agricultural
technology transfer and the growing global interdependence in agricultural
science and technology. Together, these chapters provide a solid foundation
for serious reflection on the most appropriate and effective role for public sec-
tor agricultural research. The unfolding drama documented here will no doubt
prove to be interesting to practitioners in other fields of science (medicine, en-
ergy, and transportation) who face many of the same challenges as agricultural
practitioners.
Susan E. Offutt
Administrator
Economic Research Service
U.S. Department of Agriculture
Washington, DC
LIST OF TABLES
Table 2.1. Percentages of public and private agricultural research
expenditures devoted to basic, applied, and developmental
research in the United States 15
Table 3.1. Real public agricultural R&D spending in OECD
countries, 1971-93 28
Table 3.2. University share of public agricultural R&D spending,
1971-93 30
Table 3.3. Real public agricultural R&D spending in developed
and developing countries, 197 1-9 1 31
Table 3.4. Real, total (agricultural and nonagricultural) public R&D
spending in OECD countries, 1981-93 33
Table 3.5. Agriculture’s share of public R&D spending in OECD
countries, 198 1-93 34
Table 3.6. Total R&D by performer and source of funds 36
Table 3.7. Privately performed agricultural R&D 37
Table 3.8. Focus of public and private intramural agricultural
R&D, 1993 39
Table 4.1. Labor market equations of the U.S. CGE model 62
Table 4.2. Public research expenditures and imputed tax rate by
sector 64
Table 4.3. Farm sector impacts of tax shift 66
Table 4.4. Sectoral employment impacts of tax shift 67
Table 4.5. Aggregate labor market impacts of tax shift 68
Table 4.6. Welfare and budgetary impacts of tax shift 69
Table 5.1. Scientist-years devoted to plant breeding arranged by
employer and crop categories 82
Table 5.2. Number of plant breeding scientist-years employed in
the Plant Materials CentersAJSDA 82
Table 5.3. Number of plant breeding scientist-years devoted to
plant breeding research (PBR), germplasm enhancement
(GE), and cultivar development (CD) arranged by employer 83
Table 5.4. Cost per scientist-year, number of companies, total
scientists-years, and dollar input into plant breeding R&D
by private industry arranged according to company SY size 84
ix
x List of Tables
Table 5.5. Cost per scientist-year, total scientist-years, and dollar input
into plant breeding R&D by the public sector arranged
according to source of public-sector employment 84
Table 5.6. Crops for which 25 or more breeding scientist-years are
employed in the United States 85
Table 5.7. Crops for which 20 or more breeding scientist-years are
employed in private industry in the United States 86
Table 5.8. Crops for which 15 or more breeding scientist-years are
employed in SAESs and ARSlUSDA 87
Table 6. I. Research focus of plant breeding scientists by sector of
employment 102
Table 6.2. Relative importance of each sector in cultivar development,
germplasm enhancement, and basic research 103
Table 6.3. Number of plant breeding scientists working on cotton
by sector of employment, 1994 105
Table 6.4. Average percent area planted to cotton by variety in the
United States, 1966-96 107
Table 6.5. Percent of total area planted to Tamcot and Acala varieties
for specified areas, 1996 107
Table 6.6. Estimated percent area of upland cotton planted to leading
varieties by region, 1996 108
Table 6.7. Average coefficient of parentage of cotton varieties
between plant breeding institutions 109
Table 7.1. Changes in U.S. livestock and poultry productivity
indicators, 1955-95 118
Table 7.2. Roles of the public and private sectors in animal research
by technology area 120
Table 7.3. Companies with breeding programs for poultry and
livestock in the United States, 1996 130
Table 7.4. Public and private research in animal breeding and
genetics, 1996 131
Table 7.5. Global sales of animal health products, 1995 132
Table 7.6. Public-sector animal research relative to commodity
value in 1970, 1984, and 1996 136
Table 7.7. Public-sector animal research by technology area 138
Table 7.8. Public-sector animal research in basic and applied
sciences and biotechnology at USDA and SAESs 139
Table 7.9. Public-sector animal research by sources of funds 140
Table 7.10. Rates of return to animal research in the United States 141
Table 7.1 1. Number of CRADAs established and incoming funds
from CRADAs and other sources for animal research at
ARSNSDA, 1987-97 145
Table 7.12. Summary of public and private investments in animal
research in the United States, 1996 147