This paper analyzes the effect of agricultural R&D investment on growth and poverty alleviation in developing regions to simulate how much investment is required, and how it can be allocated among different regions to maximize agricultural output gains and poverty reduction. To do so, it utilizes a model that allocates R&D investment across developing regions, maximizing welfare. A first conclusion to be drawn from the results is the importance of efficiently targeting the allocation of agricultural R&D investment across regions. The analysis for SSA shows rather different results than those for the global level, as present R&D investment allocation differs significantly from the optimal social allocation. Evidence from the model simulations suggests that higher priority should be given to investment in East Africa (Ethiopia, Kenya, and the Rest of East Africa), increasing this subregion’s share of SSA’s R&D investment. Projected future trends in agriculture growth resulting from past efforts in R&D investment imply that countries like Ethiopia, Ghana, and Tanzania could achieve substantial growth in agriculture and poverty reduction. On the other hand, lagging regions like the Sahel are likely to perform poorly in the future, with no growth in agricultural output per capita and higher shares of the regions total number of poor people. Optimal allocation of R&D investment among developing countries shows that maximizing welfare for these countries requires the allocation of a significant portion of total investment to some of SSA’s large agricultural producers.
ASTI/IFPRI-FARA Conference Working Paper 9
International Food Policy Research Institute (IFPRI); and Forum for Agricultural Research in Africa (FARA)