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Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide

Published by:
Online Location
https://www.ers.usda.gov/publications/pub-details/?pubid=44954
Publication date
07/06/2012
Number of Pages
137
Language:
English
Type of Publication:
Books
Focus Region:
Global
Focus Topic:
Agricultural Value Chains / Agri-Businesses
Market / Trade
Type of Risk:
Market-related
Type of Risk Managment Option:
Risk assessment
Commodity:
Crops
Author
Keith Fuglie, Paul Heisey, John King, Carl E. Pray, Kelly Day-Rubenstein, David Schimmelpfennig, Sun Ling Wang, Rupa Karmarkar-Deshmukh
Organization
United States Department of Agriculture (USDA) Economic Research Service

Meeting growing global demand for food, fiber, and biofuel requires robust investment in agricultural research and development (R&D) from both public and private sectors. This study examines global R&D spending by private industry in seven agricultural input sectors, food manufacturing, and biofuel and describes the changing structure of these industries. In 2007 (the latest year for which comprehensive estimates are available), the private sector spent $19.7 billion on food and agricultural research (56 percent in food manufacturing and 44 percent in agricultural input sectors) and accounted for about half of total public and private spending on food and agricultural R&D in high-income countries. In R&D related to biofuel, annual private-sector investments are estimated to have reached $1.47 billion worldwide by 2009. Incentives to invest in R&D are influenced by market structure and other factors. Agricultural input industries have undergone significant structural change over the past two decades, with industry concentration on the rise. A relatively small number of large, multinational firms with global R&D and marketing networks account for most R&D in each input industry. Rising market concentration has not generally been associated with increased R&D investment as a percentage of industry sales.