Assessing Future technologies and Infrastructure TI investments

1. Assessing Future technologies and Infrastructure (T&I) investments David Zilberman University of California Berkeley C-FARE planning for Priorities workshop San Antonio,Texas October 30 2003

2. Technological change : a key driver of the evolution of agriculture Technological innovations and capital investments were crucial contributors to increased agricultural productivity that enabled feeding a fast growing global population with ever declining share of the population in farming With a smaller expansion of the agricultural land base thus protecting environmental amenities

3. Science economics and Technological progress Innovations do not evolve randomly-they are induced by economic realities- Labor scarcity led to labor saving innovation Water scarcity led to water conservation Research and education policies and investments in infrastructure contribute to productivity growth.

4. Innovation Productivity & infrastructure major areas of agricultural economic research Key areas of Production and farm economics: Production functions estimation (relations between input & outputs) Factor productivity efficiency of resource allocations Adoption of new technologies (reflecting the emergence of discreet choice technique and Panel data sources) Studies are at different levels of aggregation Farm Region nation

5. Major areas of innovation research Study of innovations as economic activities Analysis of factor that contribute to research productivity Analyzing allocation of research funding. Rate of return(ROR) studies Ex ante is used for project selection Ex post studies find ROR of public research higher than interest rate.Thus ,Under-investment in research There is a distinction between public and private rate of return

6. Research on research policy Role of public research-when is it appropriate Distributional effects of public research Between consumers and producers and among regions Political economy of research -Why there is under investment in research How politics affect research funding The economics of alternative mechanisms competitive funding vs. formula funding vs Performance based mechanism

7. Research on Technology transfer and IPR Use and ownership of IPR of public sector research results What is done and what should be done Properties and performance of Public vs private research University research frequently identify concepts but requires investment in development and commercialization by private sector Rights to university IPR is sold to private sector, professors as entrepreneurs -university becomes part of industrial educational complex The economics and productivity of extension

8. Research on Public investment & infrastructure Evaluation of infrastructure project considering Dynamics including Irreversibility Uncertainty Finance of infra structure investments Role of public and private sectors Alternative mechanisms for public good finance Specific public good investments Roads and communication infrastructure Storage facilities Water resource infrastructure(Dams, canals) Pest-control and food security systems

9. Factors affecting research on T&I-I Information and communication technologies (IT) Internet and web Wireless telephony GIS and GPS Bio-technology Expansion of agriculture Farming medicines and chemical products Environmental and health concerns Diversity of attitudes about farm technologies Regulation of waste and pollution Promotion of resource conservation

10. Institutional changes research on T&I Consumerism -desire for convenience &quality Industrialization Contracting and vertical integration Transition from commodities to differentiated products branding and proprietary food products Privatization Transfer of patents rights to private sector Emergence of private consultant sector Persistent Low farm incomes

11. Priorities for Research on T&I The The changing institutional and technological set up provides many research opportunities We will select some of the ones that seems to have high rate of return and signify new avenues in terms of methods

12. The economics & management of information technology (IT) in farming Establishing decision-making rules for precision farming systems Precision farming is long on Hardware and short on software- Precision farming systems generates much data-economics method can put it to good use. Needed Methods for estimation with mass data Methods for adaptive decision making

13. The economic impact of IT in farming The private and public benefits to precision farming -including impacts on environment Sorting out various new IT -what to adopt Actual adoption patterns of Precision farming and other information intensive technologies Impacts of these technologies in terms of yields, costs profitability and the environment Factor affecting extent and intensity of adoption

14. IT and marketing IT potentially expands marketing opportunities in ag. We need Adoption of IT agricultural marketing Does the technology benefits farmer?others? To what extent farmers sell and buy online The use and impacts of electronic exchanges The distribution impacts of information technology how it affects various farm sizes and region, its contribution to industrialization New institutional set ups for ag marketing resulting from the IT revolution

15. IT and ag information networks The economics and performance of the agricultural information sector Benefits from investment in and subsidization of information infrastructure Methodology and estimates of return to extension and technological information IT and redesign of extension What type of informational infrastructure are needed to be developed?-who should pay? .

16. Biotechnology in agriculture Adoption of biotech in plants and livestock, domestically and internationally Gainers and losers from ag biotech Impacts in terms of profitability, yields costs,distribution and the environment The Economics of non-traditional agricultural biotechnology.

17. Regulations of Ag biotech and their impacts Impacts of alternative regimes of registration labeling and regulation on evolution of bio-technologies and their adoption Assess the role and impacts of alternative IPR arrangements- on various type of products. Provision of IPR and regulation of biotech in specialty crops

18. Public research in era of privatization and industrialization -I Contracting and vertical integration dominate the production of poultry, swine, fruits and vegetables. Agribusiness develop proprietary knowledge. Do these industries under or over invest in R&D? What are the patterns of transfer &use of public research results by private sector? What are public and private rates of return to public research in these cases? To what extent public R&D subsidized industrialized agriculture?

19. Public research in era of privatization and industrialization -II What are the ag research gapes to be pursued by public sector and their rates of return? Evaluate public research on environmental impacts of industrial ag and for regulatory purposes What is the role and productivity of extension in industrialized sectors of agriculture To what extent public research and extension serve the fringe ands specialized niches of agriculture-organic etc. What are public and private rates of returns? How to improve access and utilizations of public research results?

20. The stewardships of innovation: from the laboratory to the field Stages of innovation-research-development-production marketing adoption Productivity of research depends on the system Optimal division of responsibility to product development between public and private sectors. Relation between private marketing &extension Transfer of rights of technology from public to private sector Identification of Niches for public support for product introduction

21. Needed improvements in research on research More Interdisciplinary cooperation- Cooperation with scientists will provide better understanding of alternative research strategies Improve management stategies Will lead to more inclusion of economic principles in research management Increased Policy relevance More familiarity of economists with problems of research policy making may lead research to answer more relevant question

22. Feed back and learning in research on research We should evaluate performance of ex-ante studies and modify methods accordingly Develop impact studies of various duration Produce non-technical output for policy makers and establish a dialogue to understand their choices Compare performance of alternative mechanisms to finance research

23. Funding ag econ research Our bread and butter is the AES and USDA Formula and competitive grants Cooperative agreements with ERS EPA non ERA agencies in USDA,interior EPA,Intrior NIH States Private sector Intellectual agencies