We can afford to fund ag research - in fact, we can't afford not to
| June 3, 2008 |  View for printing |
Prices of basic foods like rice and wheat have risen rapidly around the world. This refocuses attention on two related policy questions long thought important but largely ignored recently: Should government fund agricultural research? What should wealthy nations do to increase food production in poor countries?
Both involve a basic economic question: Is improving agricultural production a "public good"? That is, do the benefits of ag research spill over to the public at large? Would private entities carry out an optimal level of such research without action by government?
In the United States, we decided long ago that improving farm output helps the general public. Because private entities carrying out research cannot capture many of the benefits, they won't spend as much money on this as society needs.
Edward Lotterman
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