Investment in agricultural research is unparalleled ‘slow magic’

Despite the proof positive from benefit-cost analyses finding a ratio of 10:1 on investment, and the less quantifiable social, environmental, and diplomatic benefits in-country and to Australia of investing in international agricultural research for development (Ag4Dev), the proportion of Australia’s development-assistance budget receives is only around 2.5 percent. We firmly believe it is in Australia’s interests to increase the proportion of its development-assistance budget invested in Ag4Dev.

And it’s not just the Crawford Fund and our new reports that think so.

While the impact can sometimes be ‘slow magic’ – taking some years to come to fruition – the wait is worth it!

Our two new reports, Australian Gains from Investment in International Agricultural R&D 2010 – 2020: Doing Well by Doing Goodand The Benefits to Australia and to the Global Community from Investing in International Agricultural Research and Development”, join a number of international reports and articles articulating the numerous benefits of investing in international agricultural research and the problems and challenges ahead for agriculture.

The 10-fold investment return we have found is matched by others, joining voices to make a growing call in the global community on the need to reverse the decline in international Ag4Dev investment. This decline not only impacts food security, but nutrition, biosecurity, trade, water use, environmental sustainability, and much more. This alarming investment decline is occurring at the same time as climate change impacts become more apparent, the number of people going hungry globally rises over 800 million and the world faces supply chain issues due to the war in the Ukraine.

While some of the international reports are understandably focused on other countries, we believe the arguments hold true for Australia too. These publications include:

The cumulative impact of CGIAR-related crop technologies reached US$1,334 billion from 1961 to 2020, according to a new peer-reviewed report titled, The economic impact of CGIAR-related crop technologies on agricultural productivity in developing countries, 1961–2020. Virtually all households in target countries have benefitted from productivity improvements which have increased access to food, and in turn led to decreases in undernutrition and child stunting, says the report. The new study notes that while farmers may face lower prices for their products, those who have successfully adopted new technology have also achieved lower unit production costs and still earn net income gains. Nevertheless, farmers who were unable or unwilling to adopt the new technologies, may face a loss of net income it says. The findings, published in the esteemed journal World Development, indicate an annual equivalent of US$47 billion in economic welfare gains.

Revitalizing the Slow Magic of US Agri-Food Research was produced by Dr Philip Pardey for the American Enterprise Institute. He notes that just like efforts to mitigate the effects of climate change, investing in R&D is not a quick fix but patience pays with compelling historical evidence of the high social payoffs that public investments in agri-food R&D have generated and no signs that the returns to more recent research have diminished in any way. The introduction explains that, “if anything, increased competitive pressures; challenges farmers now face from changes in climates, markets, and agricultural pests; and growing imperatives to reduce agriculture’s environmental footprint are likely to enhance the social returns to present and future R&D.” He argues that “there is real urgency to redress the large funding shortfall that has accumulated over the past decades and to do that in ways that sustain the commitment to higher levels of funding so it better aligns with the longer-run realities of R&D rather than the shorter-term vagaries of political cycles. The good news is that payoffs to investments will accrue for some time, often decades. Thus, R&D spending has some permanency in the stream of payoffs that flow to society.”

Halftime for SDGs: Agricultural R&D, which was published in February 2023, conducts a benefit-cost analysis of expanding agricultural research and development in the Global South. Released by the Copenhagen Consensus Center, the analysis builds on IFPRI’s IMPACT model to estimate the investments required to reduce the global prevalence of hunger below 5%. After 35 years, the increased funding is estimated to increase agricultural output by 10%, reduce the prevalence of hunger by 35%, reduce food prices by 16%, and increase per capita incomes by 4%. Using an 8% discount rate, the net present value of the costs of agricultural R&D is estimated at $61 billion for the next 35 years, while the net present benefits in terms of net economic surplus are estimated at $2.1 trillion. The central estimate of the benefit-cost ratio, BCR, is therefore 33, consistent with previous research documenting high average returns to agricultural research and development.

The payoff to investing in CGIAR research details how over the past five decades the CGIAR has spent about $60 billion in present value terms, and this investment has returned tenfold benefits which include less-easily measured payoffs for poor people from greater food abundance, cheaper food, reduced rates of hunger and poverty, and a smaller geographical footprint of agriculture. The report describes agricultural research as ‘slow magic’ with returns accruing over long periods. This report was released in 2020 by Julian M. Alston, Philip G. Pardey, and Xudong Rao.

Ceres2030’s research, released in 2020, Donors must double aid to end hunger – and spend it wisely, shows that by doubling their investments between now and 2030, donors could help end hunger, double smallholder farmer incomes, and protect the climate. Ceres2030 is a partnership between Cornell University, the International Food Research Policy Institute, and the International Institute for Sustainable Development, in a collaboration with multiple global partners. This project is supported by the Federal Ministry of Economic Cooperation and Development of Germany (BMZ) and the Bill and Melinda Gates Foundation.

According to Making science more effective for agriculture, published in Advances in Agronomy in 2020, the challenges facing global agriculture are increasing, public funding for R&D is declining but returns on investment in research and development in agriculture, are historically high. Therefore, the authors, leading agricultural academics including the Crawford Fund’s own Dr Tony Fischer and Professor Tim Reeves, argue that government investment should not only continue, but they propose high-level propositions for improved allocation of ag R&D resources.

The American Center for Strategic and International Studies published a brief in 2020, Agriculture under Pressure, examining the evolving role of agricultural development in today’s US foreign assistance strategy and programming. The brief reviews the key pressures affecting agriculture today; discusses opportunities to strengthen resilience and move toward a more sustainable, inclusive, and healthy food and agriculture system, and proposes policy and action recommendations for making US foreign assistance more effective in the current climate of stress and uncertainty.

New solutions for a changing climate: The policy imperative for public investment in agriculture R&D was released in 2020 by the Chicago Council on Global Affairs. The policy brief argues that the time for big change is now and that there must be a revitalisation of public investment in agricultural research, American food systems, and international agricultural development that focuses on the challenges of the future.

How the United States benefits from agricultural and food security investments in developing countries, published in 2019 was co-authored by the Board for International Food and Agricultural Development (BIFAD), the International Food Policy Research Institute (IFPRI), and the Association of Public and Land-Grant Universities (APLU). It has specific examples of how the USA has benefited from providing foreign assistance in agriculture, and how, through strong partnerships with the nation’s outstanding universities, USAID is truly making a difference both abroad and domestically.

Investment costs and policy action opportunities for reaching a world without hunger (SDG2) look at progress by G7 nations to meet components of Sustainable Development Goal 2 – ending hunger and all forms of undernourishment, food insecurity, and malnutrition. By undertaking a thorough assessment and identifying further policy actions and investments needed to meet SDG 2, the authors aim to provide an impetus for further national and international engagement in meeting the target. This report was published in late 2020 by the Center for Development Research (ZEF) of the University of Bonn in cooperation with the Food and Agriculture Organization of the United Nations (FAO).