Publicly Funded Agricultural Research and the Changing Structure of U.S. Agriculture (2002) / Chapter Skim
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2. Structural Impacts of Research
2. Structural Impacts of Research
Pages 30-51
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From page 30... ...
Third, the chapter describes the structural impacts associated with combinations of innovations in three case studies that examine the Green Revolution, the introduction of the tomato harvester, and new developments in animal husbandry. Finally, this chapter discusses the structural implications of the process of setting priorities in agricultural research, including the criteria used and methods of obtaining stakeholder input.
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From page 31... ...
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)
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From page 32... ...
This section discusses innovations that influence horizontal consolidation, vertical integration, and regional distribution. The concept of scale neutrality is used as a criterion for assessing the structural impact of a particular innovation.
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From page 33... ...
argued that mechanical innovations might have the greatest influence on horizontal consolidation, especially with regard to the increase of farm size and the reduction in the number of farms. Mechanical innovations contribute to horizontal consolidation for two reasons: First, they tend to reduce the requirement for labor a main input provided by the farmer.
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From page 34... ...
Most mechanical innovations, many of them in farm machinery, have been introduced by the private sector (Feder et al., 1985~. As we demonstrate in Chapter 4, only a small amount of public expenditure is devoted specifically to mechanical innovations for agriculture, although work supported by other public entities, including the military, the National Aeronautics and Space Administration, and the Department of Energy, could have spillover effects in agriculture.
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From page 35... ...
On the other hand, some innovations in biology, for example, the new tomato varieties introduced to complement the tomato harvester, have significant structural effects in that larger farms might have an economic advantage in adopting new innovations because of fixed costs associated with education, capital requirement, and other factors (Feder et al., 1985~. The literature on adoption suggests that when new crop variety properties differ significantly from those of traditional varieties, adoption can require drastic changes in the production system (Mann, 1978~.
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From page 36... ...
In addition, as chemicals, pharmaceuticals, and other exotic materials are increasingly produced using biotechnologic tools, vertical integration and contract farming are likely to result as the private sector buys the rights to and develops marketing strategies for these innovations (Zilberman et al., 19994. Innovations in biology also could significantly affect the structure of agriculture because of differential benefits across regions.
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From page 37... ...
Indeed, we have seen an emergence of seed industries that coexist with the public sector in producing genetic materials. The public-sector research and development effort is linked closely to the Consultative Group of International Agriculture Research (CGIAR)
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From page 38... ...
Vertical integration demonstrates mixed structural impacts: It can benefit small producers by reducing overall business risk, controlling costs, gaining and improving market position, and facilitating access to information and financial resources necessary to develop new crops. However, contract farming creates its own risk, despite reducing others.
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From page 39... ...
A concurrent trend toward increased loss of land sAt least as far as the classic Green Revolution was concerned, the major centers of research were not public research institutions in the conventional sense. The research performers were the International Agricultural Research Centers (IARCs)
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From page 40... ...
In addition to the Schmitz and Seckler study, there has been a large empirical literature on public research and the scale of agricultural production in the tomato sector (Berardi, 1984; DeJanvry et al., 1980; Friedland and Barton, 1975; Friedland et al., 1981~. These studies show that in response to the threatened termination of the Bracero Programs, which provided inexpensive Mexican labor to California tomato producers, University of California agricultural engineers assisted in bringing to market a mechanical harvester that largely mechanized the harvest of processing tomatoes.
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From page 41... ...
However, the most significant structural changes in agriculture have occurred in the livestock sector. The broiler industry and the swine industry, for example, present a new mode of industrial agriculture characterized by contracting, vertical integration, high concentration of animals, and increasing returns to scale.
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From page 42... ...
A second major finding is that although rbST technology is divisible into small enough units, in principle, to be used on a farm of any scale, the pattern of rbST adoption is highly correlated with herd size. Using a comprehensive data set on rbST adoption in the United States, a 1999 Wisconsin study reported that 'PA metabolic modifier produced using DNA technology that alters various physiologic functions, including the efficiency of milk production in dairy cows.
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From page 43... ...
STRUCTURAL IMPLICATIONS OF THE RESEARCH PRIORITYSETTING PROCESS Criteria for Setting Priorities in Agricultural Research The criteria used for setting priorities in public-sector agricultural research and the assessment of the payoff or benefits in the form of return on investment can have significant structural effects. Many of the criteria and payoff assessments have focused on productivity and efficiency goals, justified on the assumption that in itself, increased productivity will benefit producers and consumers and will feed the expanding global population.
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From page 44... ...
the application of the same." (Smith-Lever) Congress intended to use public agricultural research and outreach to help farmers and the "mechanic classes" to advance.
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From page 45... ...
A second structural implication of productivity-efficiency criteria for funding and evaluating research is the limitation of these criteria to consider broader social goals in assessing the benefits of agricultural research. Those goals might include increasing diversity in agricultural production and distribution systems; reducing environmental and resource degradation; contributing to the long-term sustainability of agricultural production systems; improving the social well-being of producers and rural residents; and reducing financial, economic, political, and environmental risk.
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From page 46... ...
In essence, even if efficiency and productivity are the only social goals to be achieved in public-sector R&D allocations, ignoring externalities and public cost will have important distributional and structural implications. The committee encourages the public sector to develop broader criteria for evaluating and funding agricultural research that will help producersparticularly those producers outside mainstream agriculture who are unable to compete in commodity markets obtain and retain market value.
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From page 47... ...
. Some international agricultural research centers, particularly the International Potato Center, the International Center for Maize and Wheat Improvement, and the International Center for Tropical Agriculture, have successfully and fruitfully involved social scientists in setting research priorities (Ashby and Sperling, 1995~.
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From page 48... ...
In the United States, a recent survey of agricultural research decision making reveals that stakeholder~2 involvement can work effectively (Dyer et al., 1999~. Many states have had or are implementing opportunities for stakeholder participation, and federal public-sector agricultural research is starting to engage stakeholders in the agenda-setting process as a result of the legislative mandate in the 1998 Agricultural Research, Extension, and Education Reform Act (U.S.
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From page 49... ...
Recommendation 3 To improve accountability to constituents, the public sector, at both the federal and the state levels, should continue to incorporate the knowledge and needs of stakeholders through genuine public participation in setting priorities for research and in implementing research projects; encourage broad-based participation on research and extension advisory boards to assess the relevance and importance of proposed research and extension programs arid to ensure that priority setting is responsive to a variety of needs, particularly those that cannot be met by the private sector; conduct critical analysis and assessment of the methods usedfor engaging, interpreting, and incorporating stakeholder input into decision making; and take action to make the participation process more understandable and transparent to the public. Structural Impact Assessments Data and research on the relationship between public research and structural change are limited.
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From page 50... ...
SUMMARY In this chapter we discussed the structural implications of agricultural research. Empirical evidence suggests that publicly funded agricultural research and development correlates with increases in average farm size, the number of farms, the proportion of large farms as a percentage of all farms, livestock specialization, and off-farm work participation.
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From page 51... ...
STRUCTURAL IMPACTS OF RESEARCH 51 Finally, the importance of an interdisciplinary approach and stakeholder participation in the priority-setting process was discussed as an avenue for serving diverse constituencies, and a proposal for research programs to assess distributional implications of agricultural R&D was offered.
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