Agricultural research, whether it’s conducted in the United States or abroad, has forever transformed the landscape of farming. From the hybridization of plant species and the production of biofuels to the utilization of precision-agricultural technologies, when countries invest in agricultural research the world benefits. Providing economic-development programs to developing countries reduces poverty rates and increases purchasing power, which expands market opportunities for U.S. farmers.
The United States has provided $49.87 billion, or 1.2 percent of total U.S. gross domestic product, in assistance to developing countries. Of that 44 percent is dedicated to economic-development programs, according to the U.S. Department of Agriculture’s Foreign Agricultural Service.
For decades the United States has leveraged agricultural-research and economic-development assistance to developing countries into new market access and potential future trading partners. Those assistance efforts have a positive impact on the U.S. economy and employees through direct and indirect spillover benefits. Spillover benefits occur when the consumption of a good or service by one group of individuals positively impacts a third party.
Consider direct spillover benefits
Direct spillover benefits of U.S.-funded agricultural research and development in developing countries come from international research efforts to develop nutrient-enriched and disease-resistant seed strains. The International Maize and Wheat Improvement Center, a partner of the United States Agency for International Development, estimates the organization generates benefits of $3.5 billion to $4 billion every year. In its 2018 annual report, the organization stated the release of 48 wheat varieties and 81 corn varieties throughout the world. New stress-tolerant corn varieties were planted by 3.5 million farmers in Sub-Saharan Africa. More than 102,000 farmers throughout South Asia utilized innovative farm machinery, zero-tillage or advanced-seeding dates as part of the organization’s efforts. Benefits exclusive to the United States are valued at $140 million to $180 million, with a cost-to-benefit ratio of 32-to-1 from research projects improving wheat productivity alone.
Another example of the direct benefits associated with collective research is the United States Agency for International Development’s “Feed the Future” program at the Grain Legumes Innovation Lab, which is led by Michigan State University. The new Zorro black-bean variety, the No. 1 variety grown in Michigan, is a new upright excellent-yielding variety that’s estimated to increase the value to growers by $10 million per year. Much of the increased value to farmers comes from reduced production costs. They are able to easily harvest the crop due to the upright nature of the stalk.
Explore indirect spillover effects
Other spillover benefits that come from U.S. investment in agricultural research and development in developing countries stems from the growth of new markets. According to the United Nations Conference on Trade and Development, agriculture accounts for 22 percent of gross domestic product and employs two-thirds of the labor force in the least-developed countries. Therefore an investment in agricultural productivity bolsters both the agricultural sector and the overall economy by increasing incomes and the country’s gross domestic product. As developing-country income levels increase, so do taste preferences. That leads to an increased demand for excellent-quality protein, creating additional markets for U.S. farm and ranch products.
According to the USDA since the 1990s per capita meat consumption for beef and veal, pork, poultry and sheep has grown about 3 percent annually in developing and emerging economies. Taste preferences and diet patterns shift as incomes increase. Most of the gains in meat consumption are focused in developing countries, where the demand for meat is outpacing that of developed countries.
Based on data from the World Health Organization, meat consumption in developing countries is estimated to increase 44 percent by 2030. That represents a 25-pound-per-year increase per capita from 1999. The largest increases in meat consumption are estimated in South Asia, with a 121-percent jump predicted by 2030.
Agricultural research and development is critical to the upward trajectory of U.S. agriculture. Continued investment in the stabilization of new markets in developing countries, as well as the development of technology for farmers and ranchers in the United States, is essential for the growth and future of farming.
Investments in agricultural research are proven to provide consistently excellent rates of return. An estimated 32 percent of the investment in research by the International Maize and Wheat Improvement Center returns to U.S. agriculture. And that’s just one example. Investments in agricultural research have proven to be particularly impactful in developing countries, with robust agriculture sectors that provide a significant number of jobs. Therefore even small productivity gains create large ripples of prosperity throughout a developing economy. Those ripples tend to spill over to U.S. producers as the demand for quality proteins increases along with the country’s income levels.
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