USDA Public R&D Down 33% Since 2002: Closing the Gap for Ag Innovation

The most recent USDA Economic Research Service (ERS) report (updated May 2025, with revisions in April 2025) presents agricultural and food R&D expenditure data showing both public and private spending over multi-decade spans. Public R&D (federal agencies + state universities & cooperators) is reported through 2021, except that USDA intramural agency spending is reported through 2022; private food industry R&D data also run to 2022, while private agricultural input (i.e., firms in seed, chemicals, machinery, etc.) R&D is only comprehensively tracked through 2014 due to data limitations.

An erratum in the April 28, 2025 release eliminates double-counting in cooperative research agreements between USDA intramural agencies and State Land Grant Universities. The correction reduces public R&D totals by about 2-3% over 1970-2019. This correction makes historical trends slightly less favorable than earlier thought but does not materially alter conclusions of decline.

Analyses accounting for inflation using the NIH’s Biomedical Research and Development Price Index (BRDPI) show that real public agricultural R&D spending peaked around 2002. Since then, adjusted spending has dropped roughly one-third, falling by 2019 to levels close to those of 1970.

Meanwhile, private sector agricultural R&D (excluding food manufacturing) has increased significantly over the same period, in nominal and real terms. Although public funding has weakened, private R&D in agricultural input industries has grown as a share of total agricultural R&D, reaching 50-60% in the early 2010s.

Strategic projections indicate that to sustain agricultural productivity growth, especially to offset expected slowdowns due to climate change, US public R&D spending will need to increase by roughly 5.2-7.8% annually from 2021 to 2050. That corresponds to an additional $208-$434 billion over that period. Current public spending in 2022 is estimated at $5.16 billion annually—a gap of $1-2.7 billion compared to projections needed to stay on trend.

Key implications include:

• The risk that declining public R&D may impair long-term agricultural productivity, innovation in sustainability, climate resilience, and competitiveness compared to other countries that are increasing their agricultural R&D investments.
• Private R&D growth may compensate partially, but private incentives often focus on near-term returns rather than public goods such as environmental impacts, biodiversity, or fundamental science. Without strong public leadership, areas of high social benefit may be neglected.
• Funding shortfalls could exacerbate lagging innovation—particularly in public research areas—leading to dependence on foreign advances, or underperformance in crops, climate adaptation, or food security.
• Policy choices (federal appropriations, state funding, incentives, public–private partnerships) will be central to closing the gap between current spending and what models say is necessary for future productivity and climate resilience.

Open questions include:

• How private input R&D has evolved since 2014—whether its growth has kept pace, slowed, or accelerated relative to costs of research.
• How the COVID-19 pandemic or recent supply chain/disruption shocks might have altered R&D spending patterns.
• What mechanisms (tax policy, grants, matching funds) are most effective at encouraging public and private investment in underfunded but high-return areas (e.g. climate, sustainability, plant genetics).
• The lag between R&D spending increases and observable productivity gains, especially under changing climate and economic conditions; how much slack exists before competitive advantage or food security is threatened.