Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide

147 Pages Posted: 24 Mar 2012 Last revised: 17 Nov 2015

See all articles by Keith Fuglie

Keith Fuglie

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Paul Heisey

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

John L. King

University of California, Davis

Kelly Day-Rubenstein

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

David Schimmelpfennig

Economic Research Service (ERS); Science & Technology PPQ; USDA Economic Research Service

Sun Ling Wang

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Carl E. Pray

Rutgers, The State University of New Jersey - Agricultural, Food & Resource Economics

Rupa Karmarkar-Deshmukh

Rutgers, The State University of New Jersey - Department of Agricultural, Food and Resource Economics

Date Written: December 1, 2011

Abstract

Meeting growing global demand for food, fiber, and biofuel requires robust investment in agricultural research and development (R&D) from both public and private sectors. This study examines global R&D spending by private industry in seven agricultural input sectors, food manufacturing, and biofuel and describes the changing structure of these industries. In 2007 (the latest year for which comprehensive estimates are available), the private sector spent $19.7 billion on food and agricultural research (56 percent in food manufacturing and 44 percent in agricultural input sectors) and accounted for about half of total public and private spending on food and agricultural R&D in high-income countries. In R&D related to biofuel, annual private-sector investments are estimated to have reached $1.47 billion worldwide by 2009. Incentives to invest in R&D are influenced by market structure and other factors. Agricultural input industries have undergone significant structural change over the past two decades, with industry concentration on the rise. A relatively small number of large, multinational firms with global R&D and marketing networks account for most R&D in each input industry. Rising market concentration has not generally been associated with increased R&D investment as a percentage of industry sales.

Keywords: agricultural biotechnology, agricultural chemicals, agricultural inputs, animal breeding, animal health, animal nutrition, aquaculture, biofuel, concentration ratio, crop breeding, crop protection, farm machinery, fertilizers, Herfindahl index, globalization, market share, market structure, research

Suggested Citation

Fuglie, Keith and Heisey, Paul and King, John L. and Day-Rubenstein, Kelly and Schimmelpfennig, David and Schimmelpfennig, David and Wang, Sun Ling and Pray, Carl E. and Deshmukh, Rupa, Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide (December 1, 2011). USDA-ERS Economic Research Report No. 130, Available at SSRN: https://ssrn.com/abstract=2027051 or http://dx.doi.org/10.2139/ssrn.2027051

Keith Fuglie (Contact Author)

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
202-694-5588 (Phone)

Paul Heisey

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
202-694-5526 (Phone)

John L. King

University of California, Davis ( email )

One Shields Avenue
Apt 153
Davis, CA 95616
United States

Kelly Day-Rubenstein

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
202-694-5515 (Phone)

David Schimmelpfennig

Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
202-694-5507 (Phone)

Science & Technology PPQ ( email )

4700 River Road
Riverdale, MD 20737
United States
301-851-2324 (Phone)

USDA Economic Research Service ( email )

355 E Street SW
Washington, DC 20024-3221
United States

Sun Ling Wang

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Rm 4-265C
Washington, DC 20024-3221
United States
202-694-5460 (Phone)

Carl E. Pray

Rutgers, The State University of New Jersey - Agricultural, Food & Resource Economics ( email )

211 Cook Office Building
New Brunswick, NJ 08901-8520
United States

Rupa Deshmukh

Rutgers, The State University of New Jersey - Department of Agricultural, Food and Resource Economics ( email )

New Jersey
United States

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