Context
Agricultural research & development, or agricultural R&D, supports farmers and governments to achieve a more sustainable and inclusive transformation of the agricultural sector. It supports farmers by increasing levels of farm productivity using sustainable farming techniques and increasing access to market opportunities. Agricultural R&D supports many areas of agricultural development, including but not limited to:
- Crop discovery: Engineering crop energetics and physiology; resistance to pests and diseases and next generation crop protection;
- Seed systems and varietal improvement: Driving consistent genetic gain to improve seed varieties on farmers’ fields;
- Livestock: Improving animal health products and delivery, animal production and genetic gain, and animal systems; and
- Nutritious food systems: Improving food safety, driving a more robust nutrition evidence base, and increasing the supply and demand of nutritious foods.
Research by CGIAR has demonstrated that consistent attention and investment to the agricultural R&D sector over longer periods of time has led to high returns, particularly in LICs and LMICs. There are major opportunities for both governments and development partners to invest in long-term agricultural R&D development. To benefit from these long-term investment opportunities, a better understanding of current funding patterns for agricultural R&D is required.
Agricultural R&D Advocacy Calendar
Funding trends
How is agricultural R&D funded?
Current ODA funding directed towards agricultural R&D remains a relatively small percentage of overall funding. It is estimated that R&D represents about 1/3 of total innovation funding. From 2010-2019, Development Partners accounted for 10-20% of annual agricultural innovation funding to low- and middle-income countries. In contrast, China, India, and Brazil accounted for almost 40% of overall agricultural innovation funding to low- and middle-income countries, totaling approximately US$25 billion. The private sector accounted for 20-25% of innovation funding, and was dominated by relatively few large seed, biotech, agrochemical, and mechanization companies.
This funding disparity demonstrates that not only is there room for improvement for development partners to play a stronger role in agricultural innovation, but there are also several key funding pathways to be explored beyond ODA finance. Additionally, an enabling environment, such as established policy and regulatory frameworks, clear investment targets, and coordination between local and national policies, is critical to agricultural R&D development.
Experts have highlighted the need for a strong public investment foundation to mobilize private sector investments towards the R&D space. MDBs and DFIs currently do not provide sufficient publicly available information and data analysis on their grant and loan disbursements towards agricultural R&D.
This knowledge gap makes it difficult for private sector investors to gain accurate insights into the market landscape and key trends. A knowledge gap can lead to perceptions of high risk and low return, ultimately resulting in an unwillingness to invest. Therefore, stronger ODA and FDI finance flows, as well as more publicly available information on financing, are necessary to create an enabling environment for private sector investment in both agriculture and agricultural R&D.
How is DAC funding to agricultural R&D evolving?
Outlook & Opportunities
Bilateral ODA to agricultural R&D provided by DAC donors is projected to remain at US$1 billion annually between 2023 and 2024. For some DAC countries, bilateral ODA to agricultural R&D is expected to plateau or grow slightly below the rate of overall agricultural ODA. This is driven by the stated prioritization of R&D, especially climate-smart practices, which may indicate protection of funding despite budget reduction or relocation for the conflict in Ukraine and in-donor refugee costs. Notably, the EU’s agricultural R&D funding is not considered ODA and is therefore protected for the relevant period.
How is ODA to agricultural R&D calculated?
The estimations for agricultural R&D funding, both at aggregate and donor-specific level, are the result of a methodology created by SEEK Development and based on data from the Commission on Sustainable Agriculture Intensification. Numbers for 2020 and 2021 are projections calculated based on figures for 2017-2019, as well as trends identified through qualitative research.
Our Agricultural R&D Experts
![Lauren Ashmore](https://res.cloudinary.com/donortracker/image/upload/f_auto,q_auto,ar_2:1,c_fill/138d1e42-633e-4bae-a3f4-3686fc42f0ee.png)
Lauren Ashmore
Consultant
The Donor Tracker team, along with many DAC donor countries, no longer uses the term "foreign aid". In the modern world, "foreign aid" is monodirectional and insufficient to describe the complex nature of global development work, which, when done right, involves the establishment of profound economic and cultural ties between partners.
We strongly prefer the term Official Development Assistance (ODA) and utilize specific terms such as grant funding, loans, private sector investment, etc., which provide a clearer picture of what is concretely occurring. “Foreign aid” will be referenced for accuracy when referring to specific policies that use the term. Read more in this Donor Tracker Insight.
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Our Agricultural R&D Experts
![Lauren Ashmore](https://res.cloudinary.com/donortracker/image/upload/f_auto,q_auto,ar_2:1,c_fill/138d1e42-633e-4bae-a3f4-3686fc42f0ee.png)
Lauren Ashmore
Consultant