Assessing Future technologies and Infrastructure T

1
Assessing Future technologies and Infrastructure
(TI) 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

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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

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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

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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

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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

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Factors affecting research on TI-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

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Institutional changes research on TI

• 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

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Priorities for Research on TI 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

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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

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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

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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?
• .

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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.

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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

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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 RD?
• 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 RD subsidized
  industrialized agriculture?

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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?

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The stewardships of innovation from the
laboratory to the field

• Stages of innovation-research-development-producti
  on 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

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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

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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