Investing in Research A Proposal to Strengthen the Agricultural, Food, and Environmental System (1989) / Chapter Skim
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B Private Sector Research Activities and Prospects
B Private Sector Research Activities and Prospects
Pages 128-138
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From page 128... ...
About two-thirds of private sector R&D is carried out by agricultural input industries; one-third is done by firms engaged in the postharvest processing and marketing of food products. Agnchemical company R&D focusing on the development of improved crop protection chemicals accounts for 45 percent of the total research effort on manufactured production inputs, even though the sale of pesticides accounts for between 10 and 15 percent of manufactured input expenditures.
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From page 129... ...
Forest Service 120.1 6.1 2.7 Economic Research Service 44.1 2.2 1.0 Total Public 1,964.2 99.95 44.3 Private Agriculture chemicals 695.0 28.2 15.7 Fertilizer 40.0 1.6 1.0 Seed industry 170.0 6.9 3.8 Farm machinery 300.0 12.2 6.8 Animal health 323.0 13.1 7.3 Food processing 940.0 38.1 21.2 Toud private 2,468.0 lOO.l. 55.8 Toud public and private 4,432.2 aOther federal includes competitively awarded and contract funds from other federal science agencies National Institutes of Health, National Science Foundation, U.S.
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From page 130... ...
INVESTING IN RESEARCH TRENDS IN PUBLIC AND PRIVATE SECTOR RESEARCH FOCUS Over time sizable shifts have occurred between the public and the private sector roles in agricultural research (see Table Bob. The private sectorR&D role has increased markedly relative to that of public sector R&D in the areas of plant protection and nutrition, mechanization,andpostharvestresearch.
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From page 131... ...
19611984 Research Area PublicPrivate Public Private Crop breeding and management $155$68 $228 $29 Plant protection, nutrition 200139 262 638 Livestock 148113 359 215 Mechanization 1653 13 295 Postharvest 187567 100 727 Totala 8091,081 1,770 2,359 Percentage of public plus private sector total 4357 43 57 gibe total is not the sum of the columns because it includes other categories and expenditures that could not be classified. SOURCE: Adapted from Pray, C., and C
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From page 132... ...
Food processing companies support research on manufacturing INVESTING IN RESEARCH techniques and ways to modify food properties. In recent years some food companies have begun R&D programs, often in collaboration with biotechnology research fops, to alter certain key properties and traits of food crops to improve the efficiency or consistency of food manufacturing processes or to otherwise improve product quality.
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From page 133... ...
bBroad, moderate, or narrow relative to the research needs within each majo' program area Pesticide Industry The agrichemical industry accounted for about $5.5 billion in total sales in 198~about $4 billion in the United States and $1.5 billion abroad. Of the $5.5 billion total, about $700 million-or about 13 percent of gross sales was invested in R&D (National Agricultural Chemicals Association, 1986~.
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From page 134... ...
If the industry-wide average committed to R&D remains unchanged at 12.7 percent of gross sales and planted acreage remains at or about the 1989 level for several years, both of which are optimistic assumptions, the expansion of harvested acreage and product sales might result in a $60 million to $90 million annual increase In agrichemical industry R&D in the 1990s. Over the next decade, price competition, efforts by farmers to cut production costs, and renewed interest in integrated pest management and other cultural pest control methods are likely to place downward pressure on agnchemical prices.
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From page 135... ...
Animal drug and pharmaceutical companies sold $2.34 billion in health care products to livestock farmers in 1987 (Animal Health Institute, Domestic New Sales Survey, press release, May 16, 1988~. Table B.7 summarizes Animal Health Institute data on sales and research expenditures by major category of product sales.
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From page 136... ...
Improved recognition by farm managers of the need for animal health maintenance and monitoring as key steps in preventing disease and poor performance. Optimistically, industry sales could continue to grow at 5 percent annually in real terms, with no decline in the current percentage of commitment of sales revenue to R&D.
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From page 137... ...
A half dozen companies dominate the seed, farm machinery, and animal health industries on a worldwide basis and in most countries, including the United States. Further consolidation on a global scale is expected in the' 1990s because of 137 increasingly fierce competition, growth in the size of company needed to support state-of-the-art R&D and marketing activities, and economic and political advantages gained by large companies that are able to secure raw materials, locate manufacturing plants, and penetrate markets anywhere in the world.
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From page 138... ...
The ability of U.S. agriculture to serve as a reliable, low-cost supplier of basic farm commodities has also been questioned in recent years because of aggressive policies designed to hold land out of production in order to increase commodity prices and farm income.
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