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In many developed countries, growth in agricultural productivity has slowed and investment in research by the public sector has declined. Australia has followed suit.
With climate change advancing and three billion more people to feed by 2050, it is no wonder concerns about food security are re-emerging, particularly in poor countries relying on rich countries to develop new technology.
Productivity in Australian broadacre agriculture (i.e. the growth in outputs less the growth in inputs) grew at a rate of about 2.5 per cent per year from 1953 to the mid-1990s. At this rate, productivity was at times advancing three times more quickly in the agricultural sector than in the rest of the Australian economy, and more quickly than in the agricultural sectors of many developed countries. About 70 per cent of the real value of agricultural production in Australia, which has been about $35 billion since 1995, can be attributed to productivity growth since 1953, and research and development (R&D) has been a major contributor.
However, data from the Australian Bureau of Agricultural and Resource Economics suggest that from the mid-1990s broadacre productivity may be growing at less than 1.5 per cent per year across Australia, and much slower in some states. The causes of this slower growth include climate variability and climate change, and reduced investment in agricultural research. It is not possible to empirically measure with any precision the relative contributions of these three.
The factor over which we have most control is investment in research. Public investment in agricultural research in Australia grew strongly until the late 1970s, but in the past 30 years it has hovered around $650 million (in 2004 dollars) with a temporary spike to $780 million in 2001 but falling to $690 million in 2005. Relative to the size of the agricultural sector, public investment in research has fallen from about 4.5 per cent in the 1980s to less than 3 per cent now.
The contraction has been most severe in Commonwealth and state research institutions, whose share of total expenditure ($720 million) has declined from 75 per cent in the early 1990s to 60 per cent in 2003 (Australian Bureau of Statistics data). About half of this investment is now funded by the Research and Development Corporations such as the Grains R&D Corporation and Australian Wool International, who levy producers and receive matching grants from the Commonwealth.
Australia shares these downward trends in agricultural productivity and in public investment in research with other developed countries such as the USA and the UK. These are worrying trends when in coming decades agriculture needs to adapt to climate change while world population grows by another three billion.
There have been disturbing signs recently. According to the International Food Policy Research Institute, the tripling in the price of staple grains from late 2005 to mid-2008 preceding the global financial crisis meant that the number of undernourished people increased from 848 to 923 million. The good news is that most empirical international studies, including those in Australia, suggest that the returns to investment in R&D remain high.
Australian farmers need technologies that allow them to adapt to and mitigate the impacts of climate change profitably with improved environmental outcomes. Investment in research has many of the features of investment in long-lived infrastructure. It takes several years before any benefits flow from the investment but they may persist for 50 years.
The impact of reduced investment in past decades may be only just becoming apparent as one cause of lower agricultural productivity. Conversely, now is the time to increase investment in R&D if this is to have any impact on emerging climate change and food security problems in coming decades.
Dr John Mullen is an Adjunct Professor with the School of Business, Charles Sturt University, Orange, a Distinguished Fellow of the Australian Agricultural and Resource Economics Society and recently retired as a Principal Research Scientist with the NSW Department of Primary Industries.
A story provided by Australasian Science Magazine - Australia´s Only Monthly Science Magazine. This article is under copyright; permission must be sought from Australasian Science to reproduce it. Visit Australasian Science to sign-up for a print subscription.
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