Why agricultural research matters – the aid perspective

This is a repost from the Australia Center for International Agricultural Research (ACIAR)

An argument for agricultural research

Extending agricultural productivity is an important catalyst of broader economic growth. The benefits of investment in agricultural research can be substantial, as demonstrated by growth in Australian agriculture over the past four decades. Multifactor productivity growth (growth in output relative to the combined contributions of inputs) in Australian agriculture between 1974–75 and 2003–04 averaged 2.8% a year.

Productivity growth has accounted for the entire increase in output by the agricultural sector over the last thirty years and has produced sizeable benefits–an estimated productivity dividend of just over $170 billion (page 115 of ‘Trends in Agriculture’ Productivity Commission Research Paper 2005).

A number of drivers have underpinned this growth trend. New knowledge and technology generated from research is one of those. The spillovers from this knowledge and technology may also have contributed to the ability of farmers to improve production, another driver of productivity.

“New knowledge and technology is a driver of agricultural productivity and growth.”

The combination of agricultural expertise and diverse environments similar to those in developing countries makes Australia uniquely placed to transfer and adapt this knowledge to smallholder farmers.

Transferring new knowledge, technologies and approaches to the agricultural sectors of developing countries requires a targeted research approach.

Research to overcome barriers to production can address the issues present in agriculture and design responses accordingly.

Effective research achieves productivity gains in the agriculture sector, lifting incomes and reducing poverty. It also creates opportunities in other sectors, through freeing up of labour and generating growth in communities. Better health and education outcomes can also flow, along with improved environmental management.

An international perspective

The International Fund for Agricultural Development reports that GDP growth generated by agriculture can be up to four times more effective in reducing poverty than growth generated by other sectors.

The World Bank’s International Development Association suggest that of all the countries it finances, economic growth overall was fastest in those where agriculture projects were a component of their financing. Research is vital to generating the knowledge and technologies that can drive agricultural productivity. Returns on public investment in agricultural research are consistently high. A meta analysis by the International Food Policy ResearchInstitute, using more than 1,000 studies and analyses across the agricultural research spectrum show returns of between 44%-80% in investment. The World Bank’s World Development Report 2008 found an average rate of return on agricultural R&D and extension in the developing world of 43 per cent, based on nearly 700 published studies.

Feeding the poor?

Half of the world’s people living in poverty are smallholder farming families. These smallholders try to grow enough food on tiny parcels of land, often smaller than the size of an average Australian suburban backyard. For most, food security is a recurring challenge.

Their land is often marginal in quality and location – on the side of a hill, far from water, on the edge of a desert, in a low-rainfall area. Lack of income excludes these farmers from buying much in the way of farm inputs. As they cannot afford to buy more seed, many face the choice of eating seeds needed for next year’s crop, or going hungry.

Their daily income is less than US$1.25. They cannot afford to buy food to supplement what they do not grow. Opportunities in developed countries for education, access to health care, consuming a minimum daily calorie intake, are not available without money.

The agricultural sector in which the majority of people living in poverty work is the largest employer, and most significant contributor to livelihoods.

Achieving productivity growth amongst smallholders leads to food security and surpluses that can be consumed or sold, with additional income to be spent on education of children, healthcare or simple necessities.

In many cases these farmers have not benefited from recent research and technological advances – higher yielding crops, improved management regimes, better animal husbandry, sustainable resource approaches – that have raised agricultural productivity in the developed world. These advances lifted gross world food production by 138 per cent, from 1.84 billiontonnes, to 4.38 billion tonnes over the past 50 years.

Public good funding of agricultural research

The Australian Centre for International AgriculturalResearch (ACIAR) is part of Australia’s aid program. ACIAR’s mandate is to deploy Australian agricultural science through partnerships that address mutually agreed problems, for the benefit of developing countries and Australia.

Through research partnerships, smallholders are helped to overcome barriers to increased production.

ACIAR’s role links Australian scientists and organisations to developing country agricultural research to develop solutions that generate benefits by deploying new knowledge and technologies. This is the means to achieving lasting personal food security and creating surpluses that can be sold to alleviate poverty.

Capacity building is central to ACIAR’s partnership approach, helping create long-term solutions by training developing country scientists.

Since ACIAR was established in 1982 the Centre has partnered Australian researchers with their counterparts in more than 40 developing countries, and with the research centres of the Consultative Group on International Agricultural Research, to fund projects developing knowledge and technology to overcome constraints to production.

A $32 billion return on investment

The outcomes of many of these projects and partnerships have been reviewed to determine their impact. ACIAR commissions independent economic reviews to determine economic impacts arising from projects and capacity building. An analysis of 46 impact assessment studies that have been undertaken for 120 ACIAR projects estimated a stream of benefits totalling $31.6 billion.

“Benefits flowing to developing countries are around $29.4 billion”

Benefits flowing to developing countries are estimated around $29.4 billion, with the remaining benefits ($2.2 billion) accruing to Australia through improvements in Australian knowledge and agricultural practices. $15.9 billion of the benefits can be attributed to ACIAR.

Achieving food security for the developing world begins with smallholder farmers growing more food. Research partnerships developing technologies and knowledge, targeted towards overcoming specific barriers to production, are the most effective path to the productivity gains needed to ensure food security.

 

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