Food Prices Up; R&D Down

The advent of 20th century saw a sharp positive shift in the trajectory of global poverty alleviation by the means of enhanced agricultural production aided by R&D which lifted millions out of abject poverty. But R&D investment in agriculture has not been witnessing very positive signs.

As per a book titled ‘Developing World: Too little too late?’, from the period 1981 to 2000, worldwide R&D investment in agriculture increased by 51% (from $15.2 billion to $23 billion). Out of this, the contribution of rich countries was $12.8 billion in 2000 – two third of which came from just 4 countries – US, Japan, Germany and France. However, R&D spending in agriculture is negligible when compared to other industries even beyond 2000. In 2005, the European Commission data confirmed that, pharmaceuticals & biotechnology ($97 billion in R&D), technology hardware and equipment ($101 billion), automobiles and parts ($92 billion) and software and computer services ($35 billion) grossed more in R&D investments than agriculture, which rose by 2.3% in the last decade – pharma and biotech grew at 8.3%, technology hardware & equipment at 7.2% and software grew at 9.2% in just one year; 2005.

FAO’s biannual outlook mentions, “In international food trade, the global food import bill is expected to reach a new record of $1.29 trillion in 2011 – 21 percent more than in 2010. Low-Income Food Deficit Countries and Least Developed Countries would be hardest-hit since they would likely have to spend respectively 27 and 30 percent more on food imports than last year.World Bank estimates there was just 1.46% growth in agriculture during 2008-2009 in low income countries. Global food price index was estimated to have been around 36% higher yoy in March 2011, which has ensured that 44 million people moved back below the poverty line. Cheap food needs a muse – R&D is one.