Tuesday, October 10, 2017
Funding relevant research inside each farm bill title could make more sense than the current system of segregating funding into its own title.
By Carl Zulauf
Since the Hatch Act was enacted in 1887, public funding of agricultural research has been a U.S. priority and often is cited as a cornerstone for U.S. agricultural abundance. Public funding currently is centered in Title VII of the Agricultural Act of 2014.
Researchers and some stakeholders contend Title VII is inadequately funded to meet today's need to produce more using sustainable methods, and some farm groups are considering whether to move research up their priority ranking.
Despite producing consistently high returns, inflation-adjusted funding for ag research in the United States has been on the decline since approximately 2005. More recently, actual investments have also decreased. In some countries, notably China, public funding of ag research is on the rise.
Farm bill stakeholders know public agricultural research has a high return, but their behavior implies it is not high enough to make research a top priority. Their choices however are risk-averse and rational. They favor known, immediate assistance over uncertain, longer-term benefits.
This situation parallels the oft-discussed incentive of private-market firms to favor short-term profits over potential future benefits. A solution is to better align short- and long-term incentives.
Related: How many Illinois farmers use no-till? Check survey results for latest acreage trends. Click here.
In the private market, consumers can buy products from a firm that pursues long-term benefits they value, thus enhancing the firm’s profits. Public agricultural research needs a similar connection.
Perhaps it is time to consider a new paradigm for farm bill research. The connection between short- and long-term incentives for farm bill stakeholders could be created by funding research as a percentage of the spending on a farm bill title. Research funding could be further aligned with the dynamic, evolving nature of farm bill spending choices by designating a share of a given title's funds to research issues of that title.
This new paradigm would replace the current system of a separate research title with funds authorized by individual research program or specified research topic.
This article is part of the University of Illinois Gardner Agriculture Policy Program, which focuses on policies pertinent to the upcoming farm bill, conservation, trade and other ag-related issues. The program is funded through the Leonard and Lila Gardner/Illinois Farm Bureau Family of Companies endowment. Click here to view the full article.
About the author: Carl Zulauf is with the Department of Agricultural, Environmental and Development Economics at Ohio State University.
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