For generations, the United States held an unrivaled global leadership position in public investment for agricultural research. But after reaching an inflation-adjusted peak in 2002, combined federal and state funding has plunged by more than 30%, a downward trajectory that carries major long-term risks for American agriculture, according to a new analysis from the American Enterprise Institute (AEI).
In a recent paper written by agricultural economists Philip Pardey and Vincent Smith, the pair argue that U.S. farmers and ranchers cannot afford to dismiss this decades-long funding slide, as its impacts are already being felt in on-farm output. Decades of empirical economic research confirm that sustained public agricultural R&D is the single largest driver of growth in farm productivity, and as public spending has declined, so too has the rate of productivity improvement across the U.S. agricultural sector.
Worse still, the paper warns, without an immediate, large-scale increase in public support for agricultural research, U.S. agricultural productivity could actually contract, meaning annual growth rates will turn negative. Evolving threats from pesticide-resistant crop pests and drug-resistant animal diseases mean that a baseline level of research investment is already required just to maintain current productivity levels. The authors note that current annual public R&D spending barely meets that threshold, and likely falls short of what is needed to address these ongoing sustainability challenges — let alone generate new gains in production efficiency.
Parallel to the U.S. funding decline, China’s public investment in agricultural research has expanded at a breakneck pace. By 2011, China overtook the United States to become the world’s largest public funder of agricultural R&D, and in some years its total public investment has reached double the U.S. level.
What does this shift in global research leadership mean for American agriculture? The implications are mixed. Chinese researchers are pursuing ambitious, cutting-edge work that could deliver groundbreaking new crop varieties, some of which could eventually benefit U.S. producers. But there are tangible geopolitical risks to allowing the world’s leading advances in disease-resistant and climate-resilient seed technology to fall under the control of a major geopolitical rival. Additionally, increased Chinese research investment will boost China’s domestic food security, reducing its reliance on agricultural imports from the U.S. and other global exporters.
It is important to contextualize this shift: China has 1 billion more people to feed than the United States, and only a few generations removed from widespread mass famine, so its rising investment in agricultural research is far from unexpected. The core problem for U.S. agriculture, the paper emphasizes, is not that China is investing more, but that the U.S. is investing less. Global leadership bragging rights carry little practical weight; if U.S. public R&D spending were growing steadily, falling to second place behind China would be far less concerning.
Critics of the idea that declining public funding is a crisis point to the rapid growth of private sector investment in agricultural R&D. A 2023 analysis from Iowa State University’s Center for Agricultural and Rural Development (CARD) argues that fast-growing private spending has offset the retreat in public funding, and when private investment is included, the U.S. still retains its position as the world’s top total funder of agricultural R&D.
But the AEI authors push back on the claim that private R&D can fully replace public investment. They note that nearly all private agri-food innovation is built on the foundation of basic, high-risk, long-term research carried out by the public sector. The paper also finds that the overall share of U.S. agricultural research (combining both public and private spending) dedicated to improving farm productivity has declined steadily and irreversibly over recent decades.
While CARD differs on the substitution question, framing public and private investment as complementary rather than dependent, it still confirms alarming productivity trends. CARD cites U.S. Department of Agriculture data showing that U.S. farm productivity fell by 6% between 2009, when productivity growth hit its peak, and 2019. The center notes this decline could stem directly from falling public research funding, or from a broader shift in research priorities away from productivity enhancement.
Regardless of the root cause, both research institutions agree that U.S. farmers have a direct stake in reversing the funding slide. The AEI authors note that farmer advocacy groups have consistently prioritized immediate government farm payments over increased research investment, a choice they frame as deeply short-sighted. For farmers who argue that productivity gains only drive oversupply and lower crop prices, the authors counter that a far bigger risk of suppressed prices comes from other major agricultural exporters, such as Brazil, that are rapidly expanding both their productivity and total farmland under cultivation.
The need for sustained public investment was reinforced at a recent industry conference, where a speaker laid out the reality that transformative next-generation agricultural innovations require public backing. Private investors universally demand short timelines and guaranteed returns, requirements that are incompatible with the high-risk, long-horizon work that generates breakthrough agricultural advances. Speaking offstage after the presentation, both a startup ag tech CEO and a venture capitalist confirmed this assessment, adding further weight to the argument that expanded public agricultural R&D is an essential investment for the future of U.S. agriculture.