The Payoff to Investing in Cgiar Research
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THE PAYOFF TO INVESTING IN CGIAR RESEARCH October 2020 (revised) Julian M. Alston, Philip G. Pardey, and Xudong Rao >>> Table of Contents KEY FINDINGS I What motivated us I What we did I What we found III Implications of our findings V EXECUTIVE SUMMARY VIII THE PAYOFF TO INVESTING IN CGIAR RESEARCH 1 1. Introduction 2 1.1 Report Roadmap 6 CONTEXT FOR THE ASSESSMENT 7 2. Evolving Structure of Global Agriculture, Agricultural R&D, and the CGIAR 8 2.1 Global Perspectives on Food, Agriculture, and R&D 8 2.2 The Global Incidence of Hunger and Poverty 11 2.3 The (Economic) Geography of Agriculture and Food Production 13 2.4 The (Economic) Geography of Agricultural and Food R&D Spending 15 Rising private-sector presence 17 Agricultural R&D versus total R&D 17 CGIAR spending 18 3. CGIAR Research Institutions and Investments 20 3.1 A Potted (Economic and Institutional) History of the CGIAR 20 Funding history 20 CGIAR spending breakdowns 23 3.2 Sources of Support for CGIAR Research 26 3.3 Previous Evaluation Reports 30 THE RETURNS TO CGIAR RESEARCH 34 4. Concepts, Methods, Measures and Data for the Analysis 35 4.1 Concepts and Challenges 35 4.2 Overview of the Evidence 36 4.3 Standardizing the ROR Metric 37 4.4 Selecting Data for the Analysis: Filtering 39 <<< 5. Evidence on the Returns to Investments in CGIAR Research 43 5.1 Distribution of Estimated BCRs 44 5.2 Regression Analysis 47 5.3 The BCR for CGIAR research 50 6. The Benefits From Investments in CGIAR Research 53 6.1 Scaling ROR Evidence: From BCRs to Benefits 53 6.2 Directly Estimated Benefits 58 6.3 Ground-Truthing Benefits 64 The (approximate) value of productivity growth 64 Simple approximate benefit-cost ratios 67 6.4 Reservations About the ROR Evidence 69 7. The Bottom Line 74 References 76 Supplemental Notes to Figures and Boxes 88 Supplemental Notes to Tables 91 ANNEXES 97 Annex A: Annotated Tabulation and Listing of CGIAR Studies Included in the Meta-Analysis 98 Annex B: Recalibrating Reported IRRs to Standardized BCRs 137 Annex C: Methods, Data and Detailed Results 139 The Payoff to Investing in CGIAR Research 2020 >>> Acknowledgements Paul Heisey managed the project, which was conceived by Tom Grumbly and the authors with advice from Paul and other members of the review team comprising Karen Brooks, Keith Fuglie, and Doug Gollin, and funded by the SoAR Foundation. The authors appreciate the financial support from the SoAR Foundation and the intellectual support, comments, and advice provided by the review team. Staff from the CGIAR System Organization, including Julien Colomer, Valerie Poire, André Zandstra, and Sonja Vermeulen, provided information and data about the CGIAR. Robert Andrade, Jeff Alwang, Doug Gollin, Guy Hareau, Alejandro Nin-Pratt, and Nancy Johnson provided prompt and helpful responses to our queries and calls for assistance. Tim McBride provided outstanding editorial support and advice, and Judah Houser prepared final copy layout. The work in this report drew heavily on the data library, staff, and other resources of the International Science and Technology Practice and Policy (InSTePP, www.instepp.umn.edu) center at the University of Minnesota, which brings together a community of scholars at the University of Minnesota and elsewhere to engage in economic research on science and technology practice and policy, emphasizing the international implications. Connie Chan-Kang, from InSTePP, provided outstanding research assistance with funding support from the University of Minnesota’s GEMS Informatics center. Shanchao Wang from UC Davis and Yuan Chai from the University of Minnesota also provided excellent research assistance. This good help is all gratefully acknowledged. In addition to all this help, we acknowledge a deeper intellectual debt. Many of the methods used in this report and in the studies to which it refers are described by Alston, Norton and Pardey (1995). That book includes hundreds of citations to prior seminal contributions over the past seven decades—including work by T.W. Schultz, Zvi Griliches, Vernon Ruttan, Bob Evenson, Willis Peterson, Ron Duncan, Clem Tisdell, Frank Jarrett, Bob Lindner, Hans Binswanger, Grant Scobie, Bob Herdt, Derek Byerlee, Colin Thirtle, Jeff Davis, Jim Ryan, Jock Anderson, John Mullen, John Brennan, George Norton, John Freebairn, and many others. It is a privilege to take this opportunity to stand on the shoulders of these colleagues, and good friends, as we look across this landscape of studies, building on the foundations they laid. Authorship is alphabetical. Julian Alston is a distinguished professor in the Department of Agricultural and Resource Economics, University of California, Davis, and a member of the Giannini Foundation of Agricultural Economics; Philip Pardey is a professor in the Department of Applied Economics and director of the International Science and Technology Practice and Policy (InSTePP) center, both at the University of Minnesota. Xudong Rao is an assistant professor in the Department of Agribusiness and Applied Economics at North Dakota State University. Alston and Rao are research fellows at InSTePP. I <<< KEY FINDINGS In round figures, over the past five decades the CGIAR has spent about $60 billion in present value terms. This investment—mainly through its contributions to enhancing yields of staple food crops—has returned tenfold benefits (i.e., a benefit-cost ratio of 10:1), manifest as less-easily measured payoffs for poor people from greater food abundance, cheaper food, reduced rates of hunger and poverty, and a smaller geographical footprint of agriculture. This does not count substantial benefits accruing in high-income countries. What Motivated Us The CGIAR and its precursor centers were conceived to play a critical role, working in concert with the national agricultural research systems (NARSs) in low- and middle-income countries, to develop farm technologies that would help stave off a global food crisis. They succeeded. But the issues persist, and new challenges have emerged. Many commentators express concerns about the ability of the NARSs in low-income countries, especially in Africa, to meet food security targets while also addressing the global environmental agenda confronting agriculture. The CGIAR could potentially play a pivotal role in supporting that effort. Against this background, we sought to provide a hard-nosed assessment of the past payoffs to CGIAR research investments to help guide decisions regarding future funding. What We Did • To begin, we provided a detailed quantitative context for a review of the payoffs to investments in the CGIAR over the past five decades. We juxtaposed the CGIAR’s institutional and investment history against the rapidly evolving investment realities in agricultural R&D and the shifting structure of agricultural production, worldwide. We showed: ӹ The increase from four to fifteen (and with recent mergers, now effectively thirteen) centers contributed to a commensurate expansion in the scope of science and subject matter covered. ӹ In the 1970s and 1980s, funding for agricultural R&D by high-income countries grew rapidly, and these countries provided the bulk of funding for the CGIAR. ӹ In recent decades, high-income countries have scaled back their support for both national public agricultural R&D and international agricultural research. • In the context of rising global investments in agricultural R&D, total funding for the CGIAR peaked at over $1 billion (2016 dollar values) in 2014 after a surge in response to the global food crisis. The Payoff to Investing in CGIAR Research 2020 II >>> • Since 2014, total inflation-adjusted funding for the CGIAR fell rapidly to around $800 million in 2018. • The share of unencumbered funding shrank from around 80% in 1971 to 50% in 2000, and since 2010 has plummeted to very low levels. • Concerns have begun to emerge about the capacity of the world to sustainably reduce global hunger and poverty over the coming decades, and about the ability of the NARSs in developing countries, working in concert with the CGIAR, to provide the requisite technologies. • To assess the payoffs to CGIAR spending we used money-metric measures: in particular, the benefit-cost ratio (BCR) and dollar-denominated measures of total benefits. ӹ These money-metric measures are explicitly conceived as indications of the economic welfare consequences of R&D and are widely used for that purpose. ӹ The BCR is an indicator of value for money, which is important both to investors and to those who manage research. • We did not document evidence of other consequences of CGIAR research spending, such as effects on poverty rates. ӹ Money-metric measures of total benefits could in principle be applied to specific groups (such as the poor), but distributional impacts were not the focus of this review and typically are not the focus of research evaluation reports. ӹ Since the main beneficiaries from improvements in technology for staple crops are the producers and consumers of those crops, the lion’s share of the total benefits from CGIAR crop-improvement research has gone to the poor. ӹ Reports of other income and economic development consequences of agricultural R&D are less abundant, have been less scrutinized, and are open to greater skepticism and stronger concerns over attribution—perhaps especially for the part of that R&D conducted by the CGIAR. III <<< • We employed three complementary approaches to assess the research payoffs: ӹ We compiled the largest set to date of studies with comparable estimates of returns to CGIAR research and to public research undertaken by low- and middle-income countries. ӹ We derived standardized measures of BCRs from most of those studies. ӹ We analyzed results from studies that reported total payoffs to probe whether a subset of research activities with documented high payoffs could justify investments in the CGIAR as a whole, including spending on some research and other CGIAR activities for which benefits are not documented.