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Q&A: CGIAR investment has generated returns of 10 times the amount invested

Philip Pardey discusses the importance of collaboration between national research systems and CGIAR, and why investment in agricultural research and development is needed now more than ever.

Disclaimer: The views and opinions expressed in this article are those of Philip Pardey and do not necessarily reflect the official views or position of the International Maize and Wheat Improvement Center (CIMMYT).

Working with national agricultural research centers (NARS), CGIAR centers, including the International Maize and Wheat Improvement Center (CIMMYT), have played a pivotal role in staving off the last global food crisis, mainly through enhancing the yields of staple food crops like cereals.

A new report, commissioned by the Supporters of Agricultural Research (SoAR) Foundation and authored by experts from the University of California, Davis, the University of Minnesota and North Dakota State University shows that over the past five decades, CGIAR investment has generated returns of 10 times the amount invested.

We caught up with co-author Philip Pardey, a professor at the University of Minnesota and Director of the university’s GEMS Informatics Center, to discuss the report’s implications, the importance of collaboration between NARS and CGIAR, and why investment in agricultural research and development (R&D) is needed now more than ever.

According to the report, CGIAR investment has returned a benefit-cost ratio of 10:1. How does this compare to other government investments?

A benefit-cost ratio of 10:1 means that on average, a dollar invested today brings a future return equivalent to $10 in present-day value. This is high: any ratio over the threshold of 1:1 justifies investment.

This indicates that governments — and others who invest in CGIAR and related public food and agricultural R&D — would have profited society by doing more agricultural R&D compared with the investment opportunities normally available to them. Opportunities for investment in other national and global public goods, like education and infrastructure, might also have yielded very high returns, but there is no comparable evidence that those other opportunities yielded similar return on investments.

Drawing on the findings of this report, and other related work, we conclude that the economic evidence justifies at least a doubling of overall investments in public food and agricultural R&D.

The report shows evidence of massive underinvestment in agricultural research and development (R&D) in past years. Why is that?

As we show in the report, inflation adjusted CGIAR funding has declined sharply by around 25% in the past few years. There is nothing in the economic evidence that justifies this scaling back.

Some commentators have suggested that the easy gains from agricultural R&D have already been made and that the historical returns-to-research evidence is no longer representative of the returns to more recent R&D. However, the empirical evidence refutes that notion. For example, a 2019 study from Rao et al. showed that the contemporary returns of agricultural R&D are as high as ever.

What are the risks of continuing on this path of underinvestment in agricultural R&D?

In the second half of the 20th century, global food supply grew faster than demand and real food prices fell significantly, alleviating hunger and poverty for hundreds of millions around the world. Whether or not that pattern can be repeated in the first half of the 21st century will depend crucially on investments in agricultural R&D, including investments made through CGIAR.

Global demand for food is projected to grow by 70% from 2010 to 2050. Simply meeting that increased demand will call for transformative innovations in agriculture to adapt to a changing climate, combat co-evolving pests and diseases, and increase productivity of a fairly fixed land base and a shrinking supply of agricultural water. To make food abundant and affordable for the increasingly urban, poorest of the poor demands doing much more — and much better — than simply keeping up.  If adequate investments in agricultural R&D are absent, even the odds of keeping up look increasingly questionable.

Your report shows that returns are a joint effort between NARS and CGIAR. Can you elaborate on that?

The impact evidence we reviewed for our study made clear that the success of CGIAR research is inextricably intertwined with research undertaken by national programs. In fact, this national-international R&D connectedness makes it difficult to figure out what share of the overall benefits from research are attributable to CGIAR or national innovation systems.

CGIAR has appropriately shifted its attention to low-income countries that are still heavily dependent on agriculture for livelihoods and food security. These also tend to have lower national R&D capacities and more fragile innovation systems, as well as limited, albeit emerging, private sector capabilities to support their food and agricultural sectors.

Supporting the evolution of agricultural innovation systems within CGIAR’s target economies requires doubling down on technology discovery, adaptation and delivery activities.

Philip Pardey at the University of Minnesota, USA. (Photo: InSTePP/University of Minnesota)
Philip Pardey at the University of Minnesota, USA. (Photo: InSTePP/University of Minnesota)

How can CGIAR better meet current global food challenges?

CGIAR has been demonstrably successful as an international instrument of technology discovery and in enhancing the international transfer, or spillover, of these new technologies. Tackling longer term agricultural technology challenges has been a key part of past successes.

However, a significant share of the funding for the CGIAR appears to have shifted away from the more strategic development of international public innovation goods to more localized economic development activities with a technology component. For example, the share of unencumbered CGIAR funding shrank from around 80% in 1971 to 50% in 2000, and since 2010 has plummeted to very low levels. The impact evidence provides little support for the notion that this shift in funding, which often implies a greater emphasis on more localized and shorter-term activities, is a high payoff strategy that best leverages CGIAR’s comparative advantages.

As it continually repositions its role as a source of international public innovation goods targeted to agriculturally dependent low-income countries, CGIAR will need to rethink how it partners with the public agencies, universities and private research entities that are the major source of innovations in food and agriculture.

When CGIAR was founded, a large share of the world’s agricultural R&D was done by public agencies in rich countries. Now the agriculturally large, middle-income countries spend on par with the rich countries, and the innovation landscape in rich and many middle-income countries is increasingly dominated by private firms. This comes with new partnership opportunities for CGIAR, but also new challenges, not least given the increasingly proprietary nature of the innovations and data that are driving developments in the food and agricultural sectors.

In your report you have documented clear evidence to support investment in agricultural R&D. What are the next steps in engaging national governments and decision makers to get agricultural R&D back on their agendas?

Today, as in the past, funding streams for CGIAR research are in decline and under threat. This mirrors a pattern of declining public support over recent decades for agricultural R&D conducted by national programs in many of the world’s richer countries.

However, public expectations about the roles of government to address glaring market failures may be realigning. For instance, the COVID-19 crisis exposed weakness in many public health systems, with calls for renewed and hopefully sustained, long-term investments in these public programs. COVID has also revealed the fragility of food supply systems, even in rich countries. The tide of public opinion also seems to be turning regarding the growing risks associated with climate change.

Evidence-based efforts to communicate the inter-relatedness between climate, public health and agriculture risks, and the role of innovation in reducing these growing risks over the decades ahead is critical to right-sizing and realigning the public roles in agricultural R&D.

Just as strong public investments play a crucial and complimentary role regarding significant private investments in health research, so too does the basic and pre-competitive research, undertaken with public funding, prime the pump for the growing private roles in agricultural innovation.

And even as the worldwide demand for more diversified diets continues to increase, demand for staple crops such as wheat and maize will also continue to grow and will remain crucial to securing favourable nutrition and food security outcomes in the decades ahead. Innovations in agriculture are hard won, and there are long lags (often a decade or more) between spending on agricultural R&D and getting new crop technologies in the hands of farmers. Thus there is a real sense of urgency to revitalize the investments in agricultural R&D required to produce the innovations that are needed now more than ever to sustainably feed the world.

Philip Pardey is a Professor of Applied Economics and Director of the GEMS Informatics Center, a joint venture of the College of Food, Agricultural and Natural Resource Sciences (CFANS) and the Minnesota Supercomputing Institute (MSI), both at the University of Minnesota.