ABSTRACT
This chapter (1) discusses the role of public and private agricultural research in generating improved technologies and institutions and the effects of those technologies on income growth, income distribution, and food security, (2) describes the major types and sources of agricultural research innovations, and (3) examines the role of agricultural innovation transfer mechanisms. Agricultural research generates improved technologies and institutions that increase agricultural productivity, moderate food prices, generate foreign exchange, and reduce pressures on natural resources. Economic returns on public agricultural research investments are high. Agricultural research has distributional effects by farm size and tenure, region, income level, and factor of production. Low-income consumers are major beneficiaries of agricultural research, as the poor may spend 80 percent of income increases on food, and food prices tend to fall as agricultural productivity increases. Agricultural research can influence nutrition by raising farm incomes, lowering food prices, and reducing the variability in food production. The public sector has a role to play in agricultural research because the private sector has inadequate incentives to conduct a sufficient amount of socially beneficial research because it cannot capture enough of the benefits. Since 1960, a system of international agricultural research centers has provided, in partnership with national research organizations, new technologies and institutional changes suitable to several developing countries. Use of modern biotechnology has grown around the world in recent years but is yet to be widely adopted in developing countries. Well-functioning extension systems can help speed up the spread of improved technologies.
