Persistence Pays: U.S. Agricultural Productivity Growth and the Benefits from Public R&D Spending

This book documents the evolving path of U.S. agriculture in the 20th Century and the role of public R&D in that evolution. The work begins with a detailed quantitative assessment of the shifting patterns of production among the states and over time and of the public institutions and investments in agricultural R&D. Then, based on newly constructed sets of panel data, some of which span the entire 20th Century and more, the authors present new econometric evidence linking state-specific agricultural productivity measures to federal and state government investments in agricultural research and extension. The results show that the time lags between R&D spending and its effects on productivity are longer than commonly found or assumed in the prior published work. Also, the spillover effects of R&D among states are important, such that the national net benefits from a state’s agricultural research investments are much greater than own-state net benefits. The main findings are consistent across a wide range of reasonable model specifications. In sum, the benefits from past public investments in agricultural research have been worth many times more than the costs, a significant share of the benefits accrue as spillovers, and the research lags are very long. An accelerated investment in public agricultural R&D is warranted by the high returns to the nation, and may be necessary to revitalize U.S. agricultural productivity growth even though the benefits may not be visible for many years.