World Spending on Agricultural Research and Development

Abstract

In May 2020, the US Department of Agriculture reported that China, followed by the European Union (EU), the United States, India, and Brazil spent the most public funds on agricultural research and development (R&D) (Fuglie and Nelson 2022). US public expenditures on agricultural R&D were about one-third lower in real terms in 2019 than at their peak in 2002 when spending, in 2019 dollars, was $7.64 billion (Fuglie and Nelson 2022). In contrast to the decline in US public expenditures since 2002, China’s public expenditures on agricultural R&D (deflated by national GDP indexes) rose by a factor of approximately five in the two decades since 2000. EU expenditures rose by about one-third, India’s approximately doubled, and Brazil’s rose by about half. The USDA report carries an alarmist tone, suggesting that the reduction in US public spending on agricultural R&D will lead to a reduction in competitiveness in agricultural production and lower social welfare in the long term.