Agricultural Research: Benefits and Beneficiaries of Alternative Funding Mechanism

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Just, Richard
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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The United States has developed a very successful R&D system for agriculture. It is a system with shared cost/financing and performance by the federal and state governments and by the private sector. The paper presents an economic analysis of alternative organization, management, incentive, and funding mechanisms for agricultural research under budget constraints, including some emphasis on thekinds of benefits thatare generated and thegroups that receive them. We conclude that the private sector should bepermitted to carry outresearch that it finds profitable to undertake withminimal competition firom the public sector. The public research institutions should focus on general and pretechnology science programs that complement private R&D activities and conduct applied research in areas where innovations are socially beneficial but notprivately profitable. The mechanism for channeling public funds to researchers, e.g., formula, competitive grants, or ear-marks can be expected to affect the types of benefits/impacts of agricultural research conducted and the efficiency of the research activity. Themanagement of research is difficult because of the large amount of uncertainty associated with innovations and contracting problems.