| Economic Effects of Public R&D and Investment Demand in the Agricultural Sector | |||
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| Author | Heo, Jeonghoi | ||
| Views | 54283 | Publication Date | 2018.03.14 |
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Background of Research Public R&D investment has played a leading role in Korea's agricultural R&D investment. In 2016, about 900 billion won was invested in the government R&D budget for the agricultural sector. Therefore, it is necessary to investigate the economic impact of public R&D in agriculture, estimate investment demand, and propose the direction of R&D policy. Research Methodology This study was conducted by literature research, quantitative analysis, overseas field survey, and survey. Literature research was used in order to investigate the support system and status of the R&D investment, and the previous research. We use quantitative analysis to analyze the economic effect of agricultural R&D investment and to derive investment demand. In order to draw up implications for Korea's agricultural R&D policy, an online survey on R&D experts and farmers, and a field survey in Switzerland were implemented. Research Results and Implications The public R&D systems of the agricultural sector in Korea are divided into the ones implemented by the Ministry of Agriculture, Food and Rural Affairs (MAFRA) and the Rural Development Administration (RDA). In accordance with the Agriculture, Forestry, Fisheries and Food Science and Technology Promotion Act enacted in 2009, the MAFRA establishes and implements the Comprehensive Plan for Agriculture, Forestry and Food Science and Technology (hereinafter, ‘Comprehensive Plan’) and the annual plan. The current 'Second Comprehensive Plan (2015~2019)' focuses on four core research areas, 14 major technology areas, and 50 core technologies. R&D projects of the RDA are part of the Rural Development Promotion Project, and implemented based on the 10-year 'Agricultural Science and Technology Mid-term R&D Plan'. The current 'Sixth Mid-term R&D Plan (2013 ~ 2022)' is to develop 70 projects by setting 4 goals and 19 agendas. According to the analysis results, it is necessary to increase the nominal R&D investment by about 2.6~3.5% each year in order to achieve the required TFP in 2030. If this growth rate is reflected in the size of public R&D budget for agriculture, forestry, and food (953 billion won as of 2016), it is necessary to increase the amount of R&D investment to about 1.3 trillion won to 1.5 trillion won by 2030. The effects of R&D stocks were different according to the type of farms. The change in the producer surplus was found to have both negative and positive values. By farm type, producer surplus resulted from R&D investment concentrated on sideline farms, general farms, side-business farms, self-sufficient farms rather than full-time farms and specialized farms. And the profits of flowers and livestock farms increased significantly. Also, a large R&D stock effect occurred for small-sized farms. All farm types recorded positive quantity effects due to R&D stock. As for price effect, however, there was a big difference across the type of farms due to the difference of the composition ratio of outputs and inputs. Small sized farms benefited from the price effect due to the decrease of output prices, while larger farms benefited more from the productivity effect. The ‘Second Comprehensive Plan’ of the MAFRA selects and intensively invests in core technologies. However, this type of investment should be limited to specific research fields. In the R&D investment plan, it is necessary to allocate the investment budget in such a way that it invests in human resource training and research infrastructure formation as in the EU's Horizon 2020. The relationship between R&D and agricultural policy should be set in a way that they support each other. The agricultural R&D should be expanded to include resource stage before agricultural production and recycling after food consumption like Switzerland. If the sustainable agriculture is to be implemented in each step, the investment demand of agricultural R&D will change quantitatively as well as qualitatively. Accordingly, it is important to set up the R&D investment plan in a way that it reflects the agricultural policy paradigm that is properly set up by the policy makers. Introduction of integrated R&D that resolves agricultural issues more comprehensively should be considered. That is, integrated R&D, such as integrated crop protection in Switzerland, needs to be introduced as a new type of R&D that complements current individual technology based R&D. Researchers: Heo Jeonghoi, Kim Soosuk, Yi Cheongeun Research period: 2017. 1. ~ 2017. 10. E-mail address: berliner@krei.re.kr |
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