Innovation, Growth and Structural Change in American Agriculture

65 Pages Posted: 26 May 2020

See all articles by Matt A. Andersen

Matt A. Andersen

University of California, Davis

Philip G. Pardey

University of Minnesota - Twin Cities

Date Written: May 2020

Abstract

U.S. agriculture was transformed during the 20th century by waves of innovation with mechanical, biological, chemical, and information technologies. Compared with a few decades ago, today’s agriculture is much less labor intensive and farms are much larger and more specialized, supplying a much-evolved market for farm products. Over recent decades, the global landscape for agricultural R&D has shifted away from farms, away from the public sector toward the private sector, and away from the United States towards agriculturally important middle-income countries, especially China, India and Brazil. U.S. investments in agricultural R&D are stalling even though meta-evidence shows that past U.S. investments in agricultural R&D have yielded very favorable returns: median reported benefit-cost ratios in the range of 12:1. Sustained U.S. investment and innovation will be required to preserve past productivity gains in the face of climate change, coevolving pests and diseases, and changing technological regulations—let alone increase productivity. Great potential exists for innovation in crop and livestock genetics and digital farming technologies to generate new products and production processes, but innovators are facing increasingly strong headwinds from social and political forces that seek to dictate technology choices.

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Suggested Citation

Andersen, Matt A. and Pardey, Philip G., Innovation, Growth and Structural Change in American Agriculture (May 2020). NBER Working Paper No. w27206. Available at SSRN: https://ssrn.com/abstract=3609659

Matt A. Andersen (Contact Author)

University of California, Davis ( email )

One Shields Avenue
Apt 153
Davis, CA 95616
United States

Philip G. Pardey

University of Minnesota - Twin Cities ( email )

420 Delaware St. SE
Minneapolis, MN 55455
United States

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