For decades, the United States led the world in public funding for agricultural research. But that era has ended. Federal and state investments in agricultural R&D peaked in 2002 and have since fallen by more than 30% after adjusting for inflation, according to a new analysis from the American Enterprise Institute (AEI).
Economists Philip Pardey and Vincent Smith, authors of the AEI paper, argue that this decline carries serious consequences for American farmers. Public R&D investments are a primary driver of on-farm productivity, supported by what they describe as “thousands of economic estimates.” As public spending has dropped, so has productivity growth. The authors warn that without a substantial and immediate increase in public support, agricultural productivity in the United States and other developed nations could actually turn negative.
“Current annual investments in public agricultural R&D appear barely adequate and may even fall short of the amount required to address these sustainability challenges,” Pardey and Smith wrote. With crop pests and animal diseases constantly evolving resistance, maintaining current productivity levels demands sustained investment. The paper suggests that the United States may now be spending less than needed just to hold the line.
China’s Ascent in Agricultural Research
While US public investment has stagnated, China’s has surged. Beijing overtook Washington as the world’s largest public funder of agricultural research in 2011. In some years, China has invested roughly double what the United States allocates. This shift is not merely a matter of national pride. Chinese researchers are pursuing ambitious projects, including the development of disease-resistant and climate-adapted crops. Some of these innovations could eventually benefit American farmers, but there are risks. As the AEI authors note, having the latest seed technologies controlled by a geopolitical adversary could create vulnerabilities for US agriculture.
China’s increased investment also aims to boost its own food self-sufficiency. With a population exceeding 1.4 billion and memories of mass hunger just decades old, Beijing’s focus on agricultural R&D is unsurprising. A more self-sufficient China would likely reduce its reliance on agricultural imports from the United States and other countries, reshaping global trade flows.
The real problem for American farmers, Pardey and Smith argue, is not that China is investing more, but that the United States is investing less. “Bragging rights are nice but hardly life changing,” they wrote. If US public ag research spending were rising rapidly, Americans would be far less concerned about being second to China.
Can Private R&D Fill the Gap?
Some observers point to rising private-sector investment in agricultural R&D as a counterbalance. A 2023 study from Iowa State University’s Center for Agricultural and Rural Development (CARD) found that fast-growing private spending has offset the public-sector decline. “When we consider private sector spending, the U.S. is probably still the world leader in funding for agricultural R&D,” CARD concluded.
But the AEI authors question whether private research can truly substitute for public efforts. Private R&D tends to focus on developing marketable products, while public research often generates the foundational scientific insights that underpin those products. “Much of the private investment in agri-food innovation stands firmly on the shoulders of the public sector’s more basic, riskier, and longer-term R&D,” Pardey and Smith contend. They also note that the share of all US ag research—public and private—devoted to farm productivity has “erratically but inexorably drifted down.”
The CARD study describes public and private investments as “complementary,” suggesting a more symbiotic relationship. Yet both papers agree on a troubling trend: US farm productivity fell 6% between its peak in 2009 and 2019, according to USDA data cited by CARD. This decline could stem from reduced public research funding or a shift in research priorities away from productivity enhancement. Either way, farmers have reason to be concerned.
Pardey and Smith criticize farm groups for prioritizing short-term government payments over long-term research investments. “It’s shortsighted to trade higher yields and lower production costs tomorrow for bigger government paychecks today,” they argue. They also warn that the bigger risk of lower crop prices comes not from US productivity gains but from competitors like Brazil, which is both increasing its productivity and bringing more land into production.
The need for public funding is especially acute for breakthrough innovations. At a recent conference, a speaker noted that major future advances in agricultural technology will require public investment, as private investors demand shorter timelines and more certain returns. A startup CEO and a venture capitalist in the hallway later agreed. This consensus underscores why restoring US public investment in agricultural R&D is essential—not just for farmers, but for the nation’s long-term food security and global competitiveness.
