Public and Private Research and Innovation in Wheat and Other Small Grains in the United States

The objectives of this research is to understand and quantify the roles of the public and private sector in research & development for wheat and other small grains (barley, oats, rye) in the United States. These economically significant crops are grown entirely from self-pollinating, non-GM seed from a mix of public and private sector varieties. Prior to the 1970 Plant Variety Protection Act, incentives for private R&D in these crops were weak, and most R&D was conducted by public institutions. However, under the PVPA farmers could still reuse seed from harvest, which limited sales of commercial wheat seed. Since 2002, new wheat varieties are eligible for patenting, a stronger form of intellectual property right (IPR) which prohibits farmers from saving seed except under license. In principle, this could increase the size of commercial seed sales and the amount private companies invest in R&D. However, little information is available on private R&D for these crops or the value of commercial seed sales, and the public sector continues to invest significant R&D resources in these crops. Changes in private sector behavior toward R&D investment in wheat and other small grains would have considerable implications for public R&D policy. APPROACH: Public R&D: Information on public investments in R&D by commodity will be obtained from databases maintained by the USDA National Institute of Food and Agriculture’s Current Research Information System (CRIS) database. This can be further broken down by state, by field of science, and by research problem area. ERS currently has obtained detailed annual CRIS data for 1990-2020 and will use link this to prior work by Huffman to create a long-term annual series on public R&D by commodity and state from the 1920s through 2020. Annual R&D expenditures will be used to create estimates of accumulated R&D capital stocks by commodity and state or region. Private R&D: In the past, ERS has constructed estimates of annual private R&D spending for U.S. crops, but no time series estimates are available that disaggregate this spending by commodity. Much of the increase in private crop R&D is thought to have targeted GM crops like corn, soybean and cotton. Whether wheat and small grains have benefitted from the observed increases in total private crop R&D in unknown. The approach this study will use to examine trends in private R&D in wheat and small grains is to (i) estimate the size of proprietary seed sales for these crops over time, and (ii) examine trends in the number of new varieties being issued IPR (plant variety protection certifications and utility patents) each year, by IPR owner. Previous work has found that private R&D investment is strongly correlated with commercial sales of products that embody new technologies (i.e., with considerable consistency private companies as a group appear to invest about 10% of seed sales in R&D). Over the past two to three decades, the general numbers of IPR for new varieties have also increased for many crops, although figures need to be corrected for potential duplication between types of IPR to derive consistent trends. To derive estimates of total seed sales for these crops, USDA Cost of Production and ARMS data will be used to determine farm seed costs and sources of seed (purchased or saved seed). The share of purchased seed bought from private companies will be assumed to equal the share of planted area in private, proprietary varieties. Information on area planted to specific wheat varieties will be collected from the wheat-growing states that collect and publish such data. The project will identify the owner (public university or private firm) of each planted variety, by state and by year over the last several decades. The project will also construct datasets of IPR’s (utility patents and PVPCs) awarded for wheat and small grains and link these to the varieties that have been identified to be in commercial use. A main product of the cooperative agreement will be a journal paper on the role of the public and private sectors in R&D and varietal innovation in wheat and other small grains in the United States. The data produced will also contribute to other ERS research such as understating seed markets and market concentration, and measuring returns to public investment in agricultural R&D. STATEMENT OF MUTUAL INTEREST: Both parties are engaged in research that aims to understand the role of public and private sectors in agricultural research, in particular, for wheat and other small grains. At ERS, researchers (including the PIs) are invested in diverse research that relates to this project. This research includes tracking rates and trends in public and private agricultural R&D, structure and performance of crop seed markets, and the economics of science and IPR policies for agriculture, and the relationships between R&D investment and agricultural technical change. Yoko Kusunose is an agricultural economist with an active research program on the economics of wheat breeding in the United States. She is interested in wheat and other small grains because their development in the US takes place primarily across many public institutions, distinguishing them from all other major field crops. Kusunose convened an interdisciplinary group of wheat scientists to discover strategies to accelerate breeding efforts with respect to climate change, the results of which were recently published in Global Change Biology. This cooperation will provide a foundation for future research and analysis by advancing the economics of agricultural science policy and R&D investment. It will fill an important gap in efforts to understand and quantify trends in public and private R&D by crop commodity, and the extent to which current IPR policy incentivizes private R&D investment in major non-GM, selfpollinated crops. THE COOPERATOR AGREES TO: 1. Manage any graduate students or other non ERS researchers engaged to work on the project agreement. 2. Coordinate with internal and external partners, as needed, including at least monthly meetings with ERS. 3. Collect time series information on area planted by crop variety in major producing states for wheat and other small grains, subject to data availability. 4. Develop at least one journal article from (2) in the “Approach” section above. 5. Submit quarterly progress reports on project milestones and a final report detailing activities conducted under this agreement. 6. Abide by Executive Order 13513, which established a Federal Government-wide prohibition on text messaging while driving on official business or when using Government supplied equipment (http://edocket.access.gpo.gov/2009/pdf/E9-24203.pdf). ERS AGREES TO: 1. Construct a time series of public agricultural R&D spending by commodity and state. 2. Assemble data on crop IPR (plant variety protection certificates and utility patents) and identify assignees (owners) for wheat and other small grains. 3. Assess farmer seed costs and seed sourcing for wheat and other small grains from USDA and ARMS data sources. 4. Provide regular input and feedback to the cooperator on scope and approach. 5. Include cooperator(s) as co-author(s) on any ERS report, publication, or journal article that draws on the work of the cooperator in this SOW. 6. Assist in publication of any journal article manuscripts developed from this cooperative agreement, including coordinating ERS review of outputs. MUTUAL AGREEMENTS: (This section autopopulates in the AIMS data entry system so you do not need to include this in your SOW draft) 1. The agreement budget, Form REE-454, is hereby incorporated into the agreement. The awarding agency will reimburse the Cooperator for the costs as budgeted, in the amount of $_18,000______ and will contribute in-house resources in the amount of $___. As evidence of the Cooperator’s contribution to this project, the Cooperator will provide in-house resources in the amount of $_4,500___. 2. Payments to the Cooperator will be made through: EFT (see ACH SF-3881 attached). 3. Payments to the Cooperator will be made quarterly upon submission of a properly executed invoice. See applicable Provisions on the website: http://www.afm.ars.usda.gov/agreements/files/7CFR-Part550.pdf 4. Correspondence and documentation submitted by the Cooperator to the ADODR in reference to this agreement should cite Agreement No. _______________. COOPERATOR CONTACT INFORMATION: Include contact information for the ERS project leader, the Cooperator’s Principal Investigator, and the grants office or other relevant administrative office. At a minimum the information should include name and position, address and affiliation (with zip+4 if possible), email, and telephone. ERS Principal Investigator: Keith Fuglie USDA/ERS/RRED/CEB 1400 Independence Ave, SW Washington, DC 20024 E-mail: [email protected] Telephone: 240-715-5663 Cooperator Contact Information: University of Kentucky Principal Investigator: Name: Yoko Kusunose Email: [email protected] Mailing Address: Department of Agricultural Economics, University of Kentucky, 318 Charles E. Barnhart Building, Lexington, KY 40546-0276 Telephone: 859-257-7289 Pre-Award Consultant, Contracts and Grants Name: Kim C. Carter Email Address: [email protected] Mailing Address: University of Kentucky Research Foundation 500 South Limestone 109 Kinkead Hall Lexington, KY 40526-001 Telephone: 859-257-9420 Fax: 859-323-1060