Every rupee invested in agri research yields Rs 13.85, says study

After research comes agriculture extension activities which give the second best return on investment at 7.40 rupees for every one rupee invested

As investment in agriculture research decelerated between 2011 and 2022, a recent working paper has revealed that every rupee invested in agricultural research yields a return of nearly Rs 13.85, surpassing returns from all other activities linked to farming.
 

The working paper was published by the National Institute of Agriculture Economics and Policy Research (NIAP), an entity operating under the Indian Council of Agriculture Research (ICAR), last month.
 

“Looking towards the growing demand for food and other agricultural products and the future challenges to their production amidst little scope for expansion of agricultural land, it is imperative to invest more in agricultural R&D and prioritise it across disciplines or sub-sectors and regions to maximise economic, social, and environmental benefits,” the paper reads. 
 

After research comes agriculture extension activities, which give the second-best return on investment at Rs 7.40 for every rupee invested.
 

Within the broader agriculture and allied activities, the paper found that there are significant differences in the payoffs (the return on investment) at the sub-sector level. The payoff from animal science research for every one rupee invested is significantly higher at Rs 20.81, while that for the entire crop science sector is Rs 11.69. The study also found significant regional disparities in spending on agriculture research. It showed that between 2011-2020, Odisha, Rajasthan, Madhya Pradesh, West Bengal and Uttar Pradesh, which share 43 per cent of the country’s net sown area, spent less than 0.25 per cent of their agriculture GDP on research.

 

On the other hand, Jammu and Kashmir, Himachal Pradesh, Bihar, Uttarakhand, Kerala, and Assam spent more than 0.80 per cent of their agriculture GDP on research and development. The study also found that the portfolio of agricultural R&D remains heavily biased towards crops. Livestock and natural resources receive significantly less investment. But, in southern states, the spending is more balanced.
 

In India, agriculture research and development is largely public-funded.
 

The study found that between 2011-2020, the centre and state governments respectively contributed 33.8 per cent and 58.5 per cent of their total investment in agricultural R&D, and the private sector accounted for the rest (just 8 per cent), which has increased but is still lower than the global average.
 

“From, 2011 to 2020, India spent 0.61 per cent of its agri-GDP on research, which is about two-thirds of the global average of 0.93 per cent,” the study found.
 

The proportion of agriculture GDP spent on extension services was 0.16 per cent. In 2020-21, India spent 0.54 per cent of its agriculture GDP on research and 0.11 per cent on extension activities. Though India’s investment in agriculture research and development (including private and public investment) has risen almost five-fold over the past four decades, the annual growth in research investment has decelerated to 4.4 per cent during 2011-2020 from around 6.4 per cent in 1981-1990, primarily due to sluggish growth in public investment and significant deceleration in the growth of private investment, the study found.