several indicators of farm size and to the concentration of agricultural production. A simultaneous-equation model was employed, using the state as the unit of analysis. The study provides strong statistical evidence that publicly financed agricultural research and development (R&D) is correlated with increases in average farm size, the number of very large farms (1,000+ acres), and large farms as a percentage of all farms (when controlling for a range of variables, such as farm mortgage debt, government payments to farmers, or value of marketed farm output). The largest effect is seen in the increase in the relationship between R&D expenditures and the percentage of large farms.
Another study, by Huffman and Evenson (2001), used a similar database and reached comparable findings. Huffman and Evenson used data from 1950 to 1982 from the Censuses of Agriculture, USDA, and related state-level sources. The authors used a six-equation econometric model and a large number of control variables to disaggregate the factors that lead to structural changes in farming. The objective was to estimate proportional differences over time in farm-structure-dependent variables attributable to three sets of variables: public R&D and education, private R&D and market forces, and farm commodity program payments. The indicators of structural change included crop and livestock specialization, an index of average farm size (essentially a normalized indicator of the average value of services obtained from physical capital and farmland), and amount of part-time farming. Huffman and Evenson reported that public research and education have been at least as important as private research and development and market forces for changing livestock specialization, farm size, and farmers’ off-farm work participation over the study period. The strength of the relationship between public research and farm growth increased over the last third of the study period (from roughly the early 1970s to the early 1980s). Private R&D and market forces have been relatively more important than public research and education for changing crop specialization. Changes in farm commodity programs had little relationship to farm structure over the study period.
Although the Busch et al. (1984) and Huffman and Evenson (2001) studies represent different disciplines (rural sociology and agricultural economics, respectively), they have largely consistent results. In the aggregate, they associated the extent or intensity of the public agricultural R&D effort with an increased scale of agricultural production. However, these studies analyzed a limited set of variables (e.g., number, size, specialization, and farmers’ off-farm work participation), whereas the study committee used a much broader definition of structure that includes a wide range of variables. Thus, it is difficult to make a general statement about the overall relationship between public-sector R&D and structural change based on these results. Furthermore, the Huffman and Evenson study demonstrates that the relationship of public R&D to different variables is mixed depending on the structural variable tested. They present evidence to support that public R&D is a major factor for some structural variables but not