Economic benefits from research: an example from agriculture.

In this article we examine the economic benefits of the long history of public research in agriculture. Agricultural productivity continues to grow. Annual rates of return on research expenditure are of the order of 50 percent. Research oriented to science is profitable when associated with technological research. Decentralization, as in the system of state agricultural experiment stations and substations, has allowed close association of research oriented to science with that oriented to technology and to farming. The high rate of return shows that investment in public research in agriculture is too low. This is at least partially because research benefits spill over to other regions and to consumers, reducing the incentives for local support.