The Role of Agribusiness Firms in Agricultural Research: The Case of China

Despite the efforts of various economists and agricultural scientists in calling for more investments, funding for agricultural R&D has been stagnated for the last two decades in China. This will pose a great challenge for the China's agricultural sector. Productivity has leveled off, and farmers' income has been flat. As a result, poverty reduction in recent years has also not shown any significant progress. On the other hand, agribusiness firms have emerged rapidly since the rural reforms initiated in 1978. Emerging of these firms has fundamentally changed the landscape of Chinese agricultural production. In 2003, they account for a significant share in agricultural GDP (7%), and agricultural employment. More importantly, it is their role in agricultural research and technology adoption that will drastically affect the Chinese agricultural research system, and as a result the structure of the Chinese agricultural economy. In 2003, these firms invested more than 10% equivalence of public spending in agricultural research. If their spending on technology-intensive capital is included, the percentage rose to 30%. Back in the middle of the 1990s, these shares are minimal. It is obvious that these firms will play an even larger role in investing in agricultural research in China. But this increase didn't come automatically. It is the change in the investment environment and government policies that can be attributed to. The objective of the proposed paper is to investigate the structure of these agribusiness firms by sector, location and ownership, and their performance in agricultural research, and to analyze the determinants of growth of these firms and their investment in agricultural research. The data used for the proposed study will be based on a survey conducted by the Ministry of Science and Technology in 2003. The authors provided substantial inputs in the design of questionnaire. More than 500 leading firms (based on their sales) were surveyed. They are located in different parts of China: coastal, central and western. They also represent different sectors, for example, crop production, livestock, feed processing and supply, vegetables/fruits/tree, tea, fishery, seed development/sales and biotechnology/medicine. There firms also vary by their ownership, for example state-, private-, and collective-owned, shareholding, and multinational companies. The proposed study will develop a conceptual framework and to empirically analyze how different factors have affected the performance of these firms. The performance indicators may include profitability, productivity, and more importantly their behavior in investing agricultural R&D. The factors may include their size, ownership (state, private, shareholding, or foreign), location (coastal, central or western), different types of businesses (crop production, livestock, fishery, processing, feed supply, seed breeding and supply, or biotechnology), credit/capital constraint, intellectual property rights regime, tax concession policy, and public investment in agricultural R&D. Many variables are province-specific as many government policies such as those on credit/capital, tax are made at this level of government. These variables will have to be treated carefully as they are potentially endogenous by themselves. Special econometric techniques will be used to minimize the potential bias. In addition, some firm-specific variables such as sectors they involve, ownership, and even locations are self-selected. Again, certain econometric techniques have to be used to test and to minimize the potential selection bias. The expected results will not only have potential contribution to the policy debate on how to mobilize private resources to support to agricultural research in China, but also have strong policy implications for many other developing countries. For the last decade, many developing countries have experienced stagnation or contraction in their public support to agricultural research. How government policies and public investment in agricultural research can build a productive partnership is a very much needed research topic. We hope that our research will shed light on this issue.Research and Development/Tech Change/Emerging Technologies,

AN OPTION PERSPECTIVE ON GENERATING AND MAINTAINING PLANT VARIETY RIGHTS IN CHINA

Notwithstanding the ambiguous research and productivity promoting effects of plant variety protections (PVPs), even in developed countries, many developing countries have adopted PVPs in the past few years, in part to comply with their Trade-Related Aspects of Intellectual Property Rights (TRIPS) obligations. Seeking and maintaining PVPs reserves options to an expected revenue stream from the future sale of protected varieties, the value of which varies for a host of reasons. In this paper we empirically examine the pattern of plant variety protection applications in China since its PVP laws were first introduced in 1997. We place those PVP rights in the context of China's present and likely future seed markets to identify the economic incentives and institutional influences on decisions to develop and apply for varietal rights.intellectual property rights, crop improvement, option value, seed markets, Resource /Energy Economics and Policy,

National and international agricultural research and rural poverty: the case of rice research in India and China

The study attempts to measure the total benefits from rice varietal improvement research in China and India using variety adoption and performance data over the last two decades. It then uses genetic or pedigree information to partition the total benefits between these two countries and IRRI. Finally, the study uses reported elasticity of poverty reduction with respect to agricultural output growth to assess the effects of national and international research on poverty reduction in rural India and China. The results indicate that rice varietal improvement research has contributed tremendously to increase in rice production, accounting for 14-23 percent of total production value over the last two decades in both countries. Rice research has also helped reduce large numbers of rural poor. IRRI played a crucial role in these successes. In 1999, for every $1 million invested at IRRI, more than 800 and 15,000 rural poor were lifted above the poverty line in China and India, respectively. These poverty-reduction effects were even larger in the earlier years." Authors' AbstractRice Asia., Rice Research., Rice Varieties., Rice Yields., Poverty alleviation., genetically modified organisms,

The economics of generating and maintaining plant variety rights in China:

Notwithstanding the ambiguous research and productivity promoting effects of plant variety protections (PVPs), even in developed countries, many developing countries have adopted PVPs in the past few years to comply with their Trade-Related Aspects of Intellectual Property Rights (TRIPS) obligations. Seeking and maintaining PVPs reserves options to an expected revenue stream from the future sale of protected varieties, the value of which varies for a host of reasons. In this paper we empirically examine the pattern of plant variety protection applications in China since its PVP laws were first introduced in 1997. We place those PVP rights in the context of China's present and likely future seed markets to identify the economic incentives and institutional aspects that influence decisions to develop and apply for varietal rights.intellectual property, patents, Ownership, Plant propagation, plant breeding, Trade policies, Plant introduction, Crop performance, China,

Make Policy Science to Promote Agriculture Modernization; The Open Laboratory of National Agriculture Policy Formally Startup

On October 16, 2003, the national agriculture policy open laboratory formally startup in the Institute of Agriculture Economics, Chinese Academy of Agriculture Sciences. The item to be formally established by China Department of Agriculture, Ministry of Finance and World Bank. The first help and support by the fourth technical assistance of World Bank,which has offered one million USD. The item will organize researchers of the Institute of Agriculture Economics, Chinese Academy of Agriculture Sciences. It will retain international and national famous agriculture economist and young agriculture policy analysis personnel, to form the high level of research team, set up the first agriculture economy and policy simulated laboratory in the world, and found a nation class agriculture policy analysis platform and decision support system

China's Domestic Agricultural Support Policy; Structure and Efficiency of Green Box Policy

The production function and multi-regional trade partial equilibrium model are applied to analyze China's domestic agricultural support policy,with the focus on structure and efficiency of Green Box policy.The major findings are: China's green box policy are targeted to increase productivity and secure food supply rather than to stabilize farmers' income or reduce the income gap. Investments on agricultural R&D and rural education,which have lower proportion and lower growth rate compared with the investment on rural infrastructure,have higher return in the terms of the marginal return and cost reduction. It is found that the externality of the impact of investments on R&D and education in rural area are the principal factors which result in the underinvestment from the governments' budget. Solutions to the underinvestment on agricultural R&D rural education are also discussed

The Role of Agribusiness Firms in Agricultural Research: The Case of China

Despite the efforts of various economists and agricultural scientists in calling for more investments, funding for agricultural R&D has been stagnated for the last two decades in China. This will pose a great challenge for the China's agricultural sector. Productivity has leveled off, and farmers' income has been flat. As a result, poverty reduction in recent years has also not shown any significant progress. On the other hand, agribusiness firms have emerged rapidly since the rural reforms initiated in 1978. Emerging of these firms has fundamentally changed the landscape of Chinese agricultural production. In 2003, they account for a significant share in agricultural GDP (7%), and agricultural employment. More importantly, it is their role in agricultural research and technology adoption that will drastically affect the Chinese agricultural research system, and as a result the structure of the Chinese agricultural economy. In 2003, these firms invested more than 10% equivalence of public spending in agricultural research. If their spending on technology-intensive capital is included, the percentage rose to 30%. Back in the middle of the 1990s, these shares are minimal. It is obvious that these firms will play an even larger role in investing in agricultural research in China. But this increase didn't come automatically. It is the change in the investment environment and government policies that can be attributed to. The objective of the proposed paper is to investigate the structure of these agribusiness firms by sector, location and ownership, and their performance in agricultural research, and to analyze the determinants of growth of these firms and their investment in agricultural research. The data used for the proposed study will be based on a survey conducted by the Ministry of Science and Technology in 2003. The authors provided substantial inputs in the design of questionnaire. More than 500 leading firms (based on their sales) were surveyed. They are located in different parts of China: coastal, central and western. They also represent different sectors, for example, crop production, livestock, feed processing and supply, vegetables/fruits/tree, tea, fishery, seed development/sales and biotechnology/medicine. There firms also vary by their ownership, for example state-, private-, and collective-owned, shareholding, and multinational companies. The proposed study will develop a conceptual framework and to empirically analyze how different factors have affected the performance of these firms. The performance indicators may include profitability, productivity, and more importantly their behavior in investing agricultural R&D. The factors may include their size, ownership (state, private, shareholding, or foreign), location (coastal, central or western), different types of businesses (crop production, livestock, fishery, processing, feed supply, seed breeding and supply, or biotechnology), credit/capital constraint, intellectual property rights regime, tax concession policy, and public investment in agricultural R&D. Many variables are province-specific as many government policies such as those on credit/capital, tax are made at this level of government. These variables will have to be treated carefully as they are potentially endogenous by themselves. Special econometric techniques will be used to minimize the potential bias. In addition, some firm-specific variables such as sectors they involve, ownership, and even locations are self-selected. Again, certain econometric techniques have to be used to test and to minimize the potential selection bias. The expected results will not only have potential contribution to the policy debate on how to mobilize private resources to support to agricultural research in China, but also have strong policy implications for many other developing countries. For the last decade, many developing countries have experienced stagnation or contraction in their public support to agricultural research. How government policies and public investment in agricultural research can build a productive partnership is a very much needed research topic. We hope that our research will shed light on this issue

National and International Agricultural Research and Poverty: Findings in the case of wheat in China

The objective of this paper is to assess the economic and poverty impact of wheat research in China and the contribution of CIMMYT. Our results show that wheat research conducted by China and CIMMYT contributed significantly to increases in wheat production in China. These research benefits amounted respectively to 1.1 billion and 6.1 billion US dollars (measured in 2000 constant price) in 1982 and 1998. These represent 11.9 to 22.7 percent of the total value of wheat production. The impact of CIMMYT breeding research through direct sowing or use as breeding material is not very significant in China. However, these results may mask important variations across provinces within China. Offspring of CIMMYT varieties are mostly planted in Southwestern and Southern China, and are also found in Northeastern and Northwestern China. More importantly, increases in wheat production from wheat varietal improvement research helped to reduce rural poverty in China. Our estimates show that the number of rural poor in China declined by 2.7 million in 1982 and by 1.7 million in 1998 as a result of wheat breeding research. These reductions represent 1.4 percent and 4 percent of the total number of rural poor in China in 1982 and 1998 respectively

National and International Agricultural Research and Poverty: Findings in the case of wheat in China

The objective of this paper is to assess the economic and poverty impact of wheat research in China and the contribution of CIMMYT. Our results show that wheat research conducted by China and CIMMYT contributed significantly to increases in wheat production in China. These research benefits amounted respectively to 1.1 billion and 6.1 billion US dollars (measured in 2000 constant price) in 1982 and 1998. These represent 11.9 to 22.7 percent of the total value of wheat production. The impact of CIMMYT breeding research through direct sowing or use as breeding material is not very significant in China. However, these results may mask important variations across provinces within China. Offspring of CIMMYT varieties are mostly planted in Southwestern and Southern China, and are also found in Northeastern and Northwestern China. More importantly, increases in wheat production from wheat varietal improvement research helped to reduce rural poverty in China. Our estimates show that the number of rural poor in China declined by 2.7 million in 1982 and by 1.7 million in 1998 as a result of wheat breeding research. These reductions represent 1.4 percent and 4 percent of the total number of rural poor in China in 1982 and 1998 respectively.Food Security and Poverty,