ties to patent technologies developed with public funding, which resulted in more involvement in technology transfer that yielded royalty income over gratis technology transfer. This change is seen by some as being to the detriment particularly of smaller farmers (Buttel, 2005).
Alternatively, it has been argued that it is a benefit that competitive funding helps to change the direction of public towards more necessary basic research (NAS, 1972; Rockefeller Foundation, 1982; NRC, 1994, 2003) and that more basic research is necessary to maintain historical rates of agricultural productivity growth. In this view, if basic research were reduced, applied research would eventually become unproductive. There are several potential advantages of competitive grants: responsiveness and flexibility; potential to attract the best talent through open competition; potential, through professional and peer review, to ensure that research resources flow in those directions with the greatest expected payoffs; and capacity to balance and complement other research resources and programs (Alston and Pardey, 1996). Hence, it can be argued that finding an optimal balance between competitive and programmatic funding mechanisms may be a key.
The view has further been expressed (Alston et al., 1995; Alston and Pardey, 1996) that agricultural research policy is "a blunt and ineffective instrument for objectives other than economic efficiency" and that attempts to meet other objectives through public agricultural research policy often incur "transactions costs that are not borne equally." This is particularly the case when there are other policy instruments (e.g., tax and income transfer policies) available to also address equity objectives through public policy. The way the "national economic pie" is sliced among varying groups will be affected by the choice of research priorities and in some cases (particularly in countries with weaker institutional structures) the use of other policy instruments may be relatively unavailable; yet the trade-off between efficiency and other objectives "should be limited" (Alston and Pardey, 1996).
Indeed, a number of arguments have been advanced (Ingram and Rubenstein, 1999; Fuglie and Schimmelpfennig, 2000; Brennan and Mullen, 2002; van der Meer, 2002) for the promotion of public-private cooperation in agricultural research: (1) providing a natural response in the provision of "mixed" or "hybrid" goods that have both public and private characteristics, (2) enhancing research efficiency by enabling the public sector focus resources on areas where private incentives are relatively weak, (3) providing different alternatives for maintaining adequate levels of basic research (e.g., by enabling the public sector to concentrate more on basic research while the private sector focuses on nearer-market research), (4) encouraging more innovative efforts and investments by the private sector, (5) increasing business activity that promotes competition and as a result leads to the supply of better or cheaper products and services, and (6) improving the public reputations of companies and public research managers. Therefore these public policy choices and trade-offs are not simple "either-or" propositions.
Rationalization of structures
The trend towards making public agricultural research facilities more cost effective had a positive economic impact |
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where such streamlining took place in response to changes in scientific methods and to take advantage of new economies of size and scope. However, where this "rationalization" was used merely as a justification for reductions in public R&D investments, the impact could be negative or positive depending on whether the rates of return on the investments were higher than the marginal social opportunity cost of funds (Alston et al., 1998). There are concerns that rationalization has in some European countries contributed to a serious fragmentation and weakening of the disciplinary research base and that the strategic planning of public sector funding organizations sometimes has not been joined up enough at a national level to help maintain crucial scientific expertise and facilities. The costs and time needed for re-building expertise have not always been sufficiently included in the evaluation of areas of research considered for closure (OSI, 2006).
Reallocation of research resources
Reallocation of public research resources away from near-market research programs to environmental and food safety issues is seen by many as having provided social gains but there is so far no formal evidence available on the payoff to public R&D into environmental or food safety issues and incentives to adopt results that yield social benefits are usually required to achieve a payoff at all (Alston et al., 1998).
Diversion of public resources towards agribusiness and food processing research (as happened e.g., in the UK) represents another potentially negative consequence of the recent changes in agricultural research policy in NAE. It is not yet clear whether projects funded in these areas approximate public good projects more closely than those they have displaced in the area of farm productivity and this shift of resources may have reduced the rate of return to public research investments (given that near-market agribusiness and food processing are characterized by relatively few firms with no evidence of market failures) (Alston et al., 1998).
One conclusion of the latest review of the CGIAR system (World Bank, 2003ab) (see 4.5.3) was that changes in the funding processes of CGIAR since the mid-1990s resulted in changing CGIAR's authorizing environment from being science-driven to being donor-driven and a general shift from producing global and regional public goods toward providing national and local services. CGIAR management was streamlined in recent years and, rather than increasing participation, the World Bank claimed a more strategic leading role for itself in CGIAR with creation of a legal entity covering CGIAR's central oversight and fund allocation functions (World Bank, 2003b).
4.6 Development of Public Control of Agrifood Systems
The rise of different forms of control of agriculture has had profound effects on agriculture in NAE over the past 50 years. Standards from both private and public sectors shape innovation and technology in agriculture in multiple ways (Bingen and Busch, 2006). Although in recent years de-regulation is often held up as a policy goal and ambition, in fact in relation to product quality, risk, environmental standards, animal welfare and intellectual property standard setting by both private and public sectors deter- |