In the United States, public agricultural research and development (R&D), which includes any agricultural R&D conducted at universities or Government laboratories regardless of funding source, is supported through Federal-State partnerships. These partnerships provide an important complement to business R&D, providing scientific and technological innovations that raise U.S. agri-food system productivity.
This public R&D investment is the primary driver of long-term productivity growth in U.S. agriculture. In addition to increasing farm productivity, public agricultural R&D investment also supports improvements in natural resources and forestry management, helps advance rural development, enhances food safety and quality, and informs markets and policy. Research supported by the USDA, Economic Research Service (ERS) has found spending on public agricultural R&D from 1900 to 2011 generated, on average, $20 in benefits to the U.S. economy for every $1 of spending. However, this spending has been trending downwards. In 2019 (the last year for which complete statistics are available), public agricultural R&D spending in the United States totaled $5.16 billion, about a third lower than the peak in 2002 when spending was $7.64 billion (in constant 2019 dollars). At the same time, other countries have maintained or increased their spending on agricultural R&D.
Accounting for Inflation When Measuring Public Agricultural R&D Spending
ERS researchers estimated the amount of R&D investment in constant dollars by adjusting nominal spending by an R&D price index. This R&D price index, the Biomedical Research and Development Price Index, was developed by the National Institutes of Health (NIH), is maintained by the Bureau of Economic Analysis, and spotlights the changing costs of resources devoted to R&D in life sciences fields, including agriculture. This measure indicates the rate of change in the cost of research inputs, including salaries and benefits of research personnel, prices paid for laboratory materials and equipment, and capital depreciation of research facilities. By adjusting nominal spending on agricultural R&D by this price index, it shows in real terms the amount of R&D conducted over time. Using this measure, ERS researchers found that U.S. public agricultural R&D spending peaked in 2002, and by 2019 spending had declined to roughly where it was in 1970.