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More investment in ag research needed says economist

April 11, 2012, Ottawa, Ont – University of Guelph professor John Cranfield is calling for more spending on agricultural research if Canada is going to maintain its competitiveness in global markets.

His comments were part of a presentation to agri-food leaders in Ottawa at an April 5 conference called Growing Our Future: Making sense of national food strategies hosted by the Institute for the Advanced Study of Food and Agricultural Policy, a new organization out of the Department of Food, Agricultural and Resource Economics at the University of Guelph. Cranfield was one of five agricultural economists at the conference offering insights on national agri-food strategies.

Cranfield’s talk showed that Canada’s spending on agricultural research is falling behind other countries.

“Canada’s not keeping up to the rest of the world,” says Cranfield. “As a result, we may be compromising our competitiveness.”

Cranfield suggests three possible ways to invest more in agricultural research. The first, he says, is simply increasing government spending on research. However, with budget constraints, that’s not always an option for every area that requires research. The second approach could be for producer and commodity groups to create their own funds by using research check-offs applied to the sale of agricultural commodities. Thirdly, Cranfield argues that an effective approach could be government-matching programs to bump up private investment in research.

But according to Cranfield, simply spending more money on research doesn’t necessarily create competitiveness. It’s important for government initiatives to be strategically directed. Some research, such as enhancing flavor or taste of foods, for instance, may be more readily funded by private industry, so government dollars aren’t necessary. Other research, especially in primary production or food safety, isn’t as likely to attract private dollars, and represents areas where public investment is warranted, especially in light of the high return to these activities.

“It’s not enough just to throw money at research,” says Cranfield. “It’s crucial to think carefully about where it’s being spent. Government funding should be directed where it will have the most impact and where other funding sources are lacking.”

Other speakers at the conference where Cranfield offered these observations addressed specific issues regarding national agri-food strategies. Their presentations offered economic perspectives on which aspects of agricultural policies make sense and which are counter-productive to national fiscal growth. The keynote speaker at the conference was Joseph Glauber, the U.S. Department of Agriculture’s chief economist. Glauber gave an overview of U.S. farm policy and the World Trade Organization.