U.S. Aid For Overseas Research On Rice And Wheat Generates Large Return To U.S. Consumers And Farmers

September 19, 1996


Embargoed for release at 11:00 a.m. EDT,
Thursday, September 19, 1996

For more information, contact:
Ellen Wilson at (301) 652-1558 or Barbara Rose at (202) 862-5670


Every Aid Dollar Invested in Wheat Research to Feed the Poor in Developing Countries Gives Back as Much as $190 to U.S. Economy, According to New Report

WASHINGTON, D.C. U.S. taxpayer-financed investments in research to stave off hunger overseas have been repaid to U.S. farmers and consumers as much as 200 times over, according to a new report released today by the Washington, D.C.-based research organization the International Food Policy Research Institute (IFPRI). The report is based on the most comprehensive study ever conducted to quantify the benefits to U.S. farmers and consumers of foreign aid spending on agricultural research. It found that the benefits of international wheat research are as high as 190 times the U.S. investment, and the benefits of international rice research are as high as 17 times the U.S. investment.

The report, "Hidden Harvest: U.S. Benefits from International Research Aid," was released at a press conference in Washington by IFPRI. It summarizes a study conducted by economists from IFPRI and the University of California at Davis. The study examines more than three decades of research to enhance the yields of rice and wheat in developing countries and the United States and reports the resulting impact on U.S. rice and wheat farming.

The study analyzes the costs of U.S. Agency for International Development (USAID) investments in the Consultative Group on International Agricultural Research (CGIAR), a network of 16 international agricultural research centers whose work underpins most of the crop-improvement efforts for developing countries. Though the primary purpose of the CGIAR is to alleviate poverty and hunger in developing countries, new and improved plant varieties developed by CGIAR centers have also found their way onto U.S. farms from California to the Mississippi Delta.

According to Phil Pardey, lead author and research fellow at IFPRI, "High-yielding crops with resistance to insects and diseases developed by the CGIAR have proved effective in ending food production shortages worldwide. These modern seed varieties have allowed us to feed an additional 1.5 billion people in the last two decades. But better seeds such as these have also reduced the production costs of U.S. wheat and rice farming, making bread, pasta, and a host of other products cheaper for the consumer.

"One of the major breakthroughs of wheat and rice farming targeted for poor countries abroad was an advance known as `semi-dwarfing,'" continued Pardey. "Semi-dwarfing makes plants shorter and stronger, allowing more of the plants' energy to be directed to grain production. This means more grain per acre of farmland and, therefore, cheaper food for people living in destitute countries in Africa, Asia, and Latin America. But semi-dwarfing also means cheaper food for the U.S. consumer. Over 75 percent of the U.S. rice acreage and 58 percent of the U.S. wheat acreage consist of semi-dwarf varieties. Everybody gains from international agricultural research.

"Because the new varieties are more productive, farmers can grow more grain on the same amount of land, thus preserving natural resources," he added.

From an overall investment of $71 million in wheat improvement research at the CGIAR's International Maize and Wheat Improvement Center (CIMMYT) since 1960, the U.S. economy has realized a return of at least $3.4 billion and up to $13.4 billion for the period 1970 to 1993. From a total investment of about $63 million in rice research at the CGIAR's International Rice Research Institute (IRRI) since 1960, the United States has gained at least $37 million and up to $1 billion in economic benefits from 1970 to 1993.

To measure the benefits realized by the U.S. economy from CGIAR research, IFPRI researchers tracked the development and use of improved, higher-yielding varieties of rice and wheat developed by IRRI, CIMMYT, and U.S. breeders. The rate and extent of their adoption by U.S. farmers from 1970 to 1993 were measured, and the economic value of the improved productivity from these varieties was estimated. Those economic benefits that were due to the CGIAR research were determined and compared with the corresponding costs of investing in the CGIAR.

"Wheat and rice are not indigenous to the U.S., but these food crops are important to the agricultural economies of large regions of the country and are thus useful to illustrate the benefits and costs to the United States of international agricultural research," said Pardey.

Wheat is among the top ten agricultural commodities by value in 26 U.S. states, from California across the northern plains and the Midwest to northeastern states like Pennsylvania and New York. Wheat production in 1993 meant $7.7 billion to the U.S. economy. As one of the world's largest exporters of wheat, the United States produced 65 million metric tons of wheat, or about 12 percent of the world's output in 1993.

Spring wheats, such as red wheat used for bread and durum wheats used for pasta, are grown in California and in the northern plains states of Montana, Minnesota, and North and South Dakota. Winter wheats used for bread are grown in the central plains states of Nebraska, Colorado, Iowa, and Kansas as well as the southern plains states of Oklahoma and Texas. The Northwest states of Idaho, Oregon, and Washington grow soft winter wheats useful for biscuits and noodles.

By the early 1990s, about 20 percent of the total U.S. acreage of wheat was grown to varieties with CIMMYT ancestry. In 1993, virtually all of the California spring wheat crop was grown with varieties with CIMMYT ancestry. CIMMYT varieties have also had a sizable impact on the varieties grown in the northern, central, and southern plains states.

The United States is also a major exporter of rice, accounting for nearly 18 percent of internationally traded rice. In 1993, rice production generated $1.3 billion for the U.S. economy. Rice is grown in California and in the Mississippi Delta region including Arkansas, Texas, Louisiana, Mississippi, and Missouri.

In 1993, 73 percent of the total U.S. rice acreage was sown to varieties with IRRI ancestry. Nearly all of the California rice crop grown that year consisted of varieties with IRRI ancestry, as did 70 percent of rice grown in the Mississippi Delta region.

"The U.S. has also benefited in other ways. Investments in agricultural research are investments in international stability," said Pardey. "Improved food security and economic growth in developing countries can reduce political instability and conflicts, which often lead to pressure on developed countries in the form of refugee crises, costly emergency aid, and dangerous military interventions."

However, there has been a general scaling back of the U.S. commitment to international assistance, according to the report. "Further cutbacks in U.S. contributions to international agricultural research threaten the investments already made and the many gains yet to be realized from more than three decades of research in wheat and rice," said Pardey.

According to the report, the planned U.S. 1996 contribution of $37.2 million to international agricultural research represents a 40 percent cut from the 1990 contribution of $60.1 million. The 1995 U.S. contribution of $40.5 million represents only about one-half of 1 percent of the U.S. foreign aid budget. "Yet it is widely recognized as the most effective development assistance provided by USAID as well as the source of large gains to the U.S. economy," said Pardey. "Restoring the contribution to its 1990 level would greatly reduce hunger and malnutrition in developing countries and bring even more benefits to the U.S. economy.

"U.S. gains from involvement in international agricultural research are not just financial," continued Pardey. "Scientific knowledge and the products of research flow freely between U.S. land-grant and other universities and the international centers, and each party gains from the others' newly acquired knowledge."

IFPRI was established in 1975 to identify and analyze policies for sustainably meeting the food needs of the developing world. IFPRI is a member of the CGIAR, an informal association of some 40 countries, international and regional organizations, and foundations that support sustainable improvements in agricultural productivity through centers around the world.


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