The Effects of Public Research and Development Expenditure on Food Security
Investigating the effects of public-funded research and development on agricultural productivity and food security.
The Global Food Security Index (GFSI), developed by Economist Impact, with the support of Corteva Agriscience, aims to investigate both the state and drivers of food security globally. The report finds that since 2019, global food security has not improved after steady progress between that year and 2012. The 62.2 average global index is close to par with the Asia Pacific, Latin America, and the Middle East & North Africa regions – 63.4, 63.4, and 63 respectively – but North America and Europe’s higher indexes are offset by Sub-Saharan Africa’s 47.0. Accordingly, six of the ten lowest-rated countries are in this region: Sierra Leone, Madagascar, Burundi, Nigeria, Sudan, and the Democratic Republic of Congo.
The four main pillars used to evaluate the index are affordability, food quality & safety, sustainability and adaptation, and availability. In 2022, the score for the availability index was 57.8, below the total global average.
Food availability is affected by factors ranging from access to agricultural outputs and farm infrastructure to the sufficiency of supply and supply chain infrastructure. The struggles with food availability can be tied directly to the fact that four of the five lowest-scoring indicators belong to sub-factors of food availability:
Irrigation infrastructure – 20.5;
Agriculture producer prices – 23.7;
Empowering women farmers – 28.3, and;
Public expenditure on research and development – 29.2.
Public investment in agricultural research and development is crucial for food security and sustainability for scale and implementation. The results from public-funded agriculture research are not the intellectual property of any single entity and thus can be disbursed around the state, raising productivity nationwide.
Organization for Economic Cooperation and Development (OECD) data demonstrates the link between public R&D spending and the value of agricultural production. Between 2019 and 2021, public spending on R&D in China averaged around $6.6 billion per year in China. In contrast, the average was $2.8 billion in the United States of America, around $1.2 billion in India, and $1.6 billion in Brazil. Crucially, between the three-year periods of 2000-2002 and 2019-2021, China’s agriculture R&D spending rose by a factor of approximately five, showing steady growth in funding. In the United States, it grew by a factor of around 1.5, denoting a stagnancy in government R&D funding. The results? The value of agricultural production grew by a factor of around 6.7 from around 2000-2002's $240 billion per year average to nearly a $1.6 trillion average in 2019-2021. The growth rate in the United States was at a factor of 2 between the same periods, from $200 billion per year to $400 billion.
Public agricultural R&D spending will inevitably lead to increased food security and high economic returns. GFSI’s global average, when segmented into regions, takes on the same shape as the public expenditure on agricultural R&D sub-index: North America and Sub-Saharan Africa score highest and lowest on both respectively.
A characteristic of agricultural R&D investment is that it is always a project, with long-term payoffs and temporal lags. This lag between when R&D funding takes place and the time for high economic rewards, as seen in China, implies that stability and continuity are crucial. Studies show that volatility can be an issue in reaching the payoff of funding. This volatility appears to be predominant in Sub-Saharan Africa compared to other regions. Any changes to the government will likely come with new government policies, negating long-term planning.
Hence, high volatility in agricultural R&D spending will introduce shocks which will weaken the resilience of the agriculture sector and threaten food availability and security with time. To avoid these shocks, governments need to steadily invest in agricultural research and development, tackling volatility with multi-year plans.
One method that might be suggested will be to increase the role of private sector R&D funding. This has happened in countries like the United States; the stagnancy in public funding has been offset by an increase in private-sector spending. While offsetting public spending with private spending will likely maintain agricultural productivity and output, both sides should be complementary instead of substitutes.
A reason for this is food cost: the profit-driven motive of private sector R&D and spending will see food prices rise as the cost of R&D is shifted to the consumers. This can be seen in the target of funding. Public R&D spending might cover areas of environmental impacts, land degradation, soil organic content, farm infrastructure, and both farm worker and animal welfare; private R&D spending is likely to be targeted at marketable inputs and outputs, along with a focus on patentable products. Thus, public R&D investment is more likely to lead to better welfare outcomes, poverty reduction, employment, sustainability, and long-term food security.