By Margaret Smith, PhD,  former Director for the Cornell Agricultural Experiment Station, Gordon Merrick, J.D., former OFRF Policy & Programs Director, and OFRF Staff

There’s a quiet assumption that has been increasingly showing up in a lot of policy conversations: if something is valuable, the private sector will figure it out. In agricultural research, that assumption quickly breaks down.

Public investment in agricultural research is fundamentally about the public good. That research may or may not generate shareholder value, and oftentimes that is the point. By contrast, private investment in agricultural research is, by necessity, focused on outcomes that support profitability, intellection property development, and ultimately return on investment opportunities. Both are vital for our agricultural system, but they are not interchangeable.

Understanding and appreciating that difference is the reason publicly-funded agricultural research remains essential to continue to center farmers, rural communities, and the long-term resilience of our food system.

How Public Agricultural Research Actually Works

The USDA has multiple mechanisms for both long-term, steady investment into our national research infrastructure, but also for competitive grant programs that award market-relevant, public-good research projects.  Those fall into three primary categories: Federal Capacity Funds; ARS Cooperative Agreements; and Competitive Grant Programming.

Federal Capacity Funds

OFRF staff tour University of Vermont’s Nordic Farm, which works in partnership with USDA ARS.

Generally a catch-all term for a variety of USDA’s research funds (Hatch, Multistate Hatch, McInter-Stennis, to name a few!) that support research priorities identified at the state level through land-grant universities (LGUs) and state agricultural experiment stations. Although these funds are relatively small portions of their overall budgets, they allow states flexibility to invest in research that reflects local crops, pests, soils, and producer needs.

ARS Cooperative Agreements

Similar in nature to Capacity Funds, investing in long-term research infrastructure and local topics, Cooperative Agreements with the Agricultural Research Service (ARS) allow LGUs and experiment stations to partner with ARS.

Competitive Grants

USDA operates several Competitive Grant programs, like the Organic Research and Extension Initiative, the Organic Transitions Program, the Specialty Crop Research Initiative, and their largest, the Agriculture and Food Research Initiative. As the name suggests, these are competitive pools of funding for LGUs, experiment stations, but also non-profit organizations and companies that are interested in pursuing research projects that align with legislative purposes.

Taken together, these three funding mechanisms are investments into research systems and projects that the private sector simply cannot, or will not, address.

What Public Agricultural Research Produces, That Markets Won’t

Public agricultural research frequently delivers outcomes that are indispensable to farmers, but are oftentimes unattractive from a revenue-generating perspective. Those include cultivar development, practice, input, or equipment evaluations, and localized pest management strategies.

Cultivar Development

In terms of cultivar development, the details matter. The private sector generally focuses on the large commodities and maximizing production and compatibility with their inputs. Public-funded cultivar development operates with a different set of risk/value considerations. There are dozens, hundreds of examples of cultivars identified and developed through public breeding programs, especially for organic production.

One specific example of this is potato breeding in New York. Breeders there focus heavily on resistance to golden nematode, a quarantine pest confined to just eight counties in the state. Because of coordinated public management and breeding efforts, the pest has remained geographically limited since it was first identified in 1941. All potatoes grown in New York must be golden nematode resistant. No private company breeds potatoes specifically for New York; meaning the only entity capable of maintaining this protection is the public potato breeding program at the LGU, Cornell University. Without it, growers could lose the ability to ship soil-bearing commodities well beyond potatoes, with ripple effects across vegetable and nursery sectors

Practice, Input, and Equipment Evaluation

Cover crop research at the U.S. Agricultural Research Station in Salinas, California.

Evaluation of farm inputs, practices, and equipment can be an incredibly valuable information for a farmer, and is another area where public research plays an outsized role. Fine-tuning seeding rates, fertilizer recommendations, or grazing strategies often leads to reduced input purchases. That’s good for farmers and ecosystems; but it doesn’t generate new product sales.

Similarly, decades of publicly funded research on cover cropping helped establish agronomic benefits long before robust private seed markets existed. Without that foundational work, many of today’s cover crop value chains would not exist at all.

Localized, Integrated Pest Management

Another highlight of the structural differences between publicly- and privately-funded research is Integrated pest management (IPM). Best practices often involve management changes rather than purchases: crop rotation, timing adjustments, cover crops, mechanical control. These approaches frequently reduce pesticide use; which is good for farmers, ecosystems, and long-term resilience, but not for product sales.

Private-sector research has understandably focused on profitable technologies like genetically-engineered crops paired with proprietary chemicals. This has resulted in a predictable outcome, widespread herbicide resistance in weed populations. In contrast, public research remains one of the few avenues for exploring weed and pest management systems that reduce reliance on chemical inputs, precisely because these approaches don’t generate steady product revenue. You can’t patent a new way to plant cover crops, or hedgerows for pest management; therefore businesses that have a legal duty to maximize shareholder value have no incentive to conduct this research.

What Happens if Capacity Funding is Cut

All of this context makes one risk especially clear: a Presidential Budget Request that zeroes out federal capacity funding would not just trim around the edges of the U.S. agricultural research system; It would fundamentally destabilize it.

Federal Capacity Funds are the backbone of state-based agricultural research. They provide the baseline support that allows land-grant universities and experiment stations to maintain personnel, infrastructure, and long-term research programs that competitive grants alone cannot sustain. These funds are what enable states to respond to regionally specific challenges, maintain breeding programs that span decades, and support early-stage or applied research that is essential to farmers but unlikely to win large, short-term competitive awards.

Eliminating capacity funding would create cascading effects across the entire research ecosystem. States would lose the flexibility to allocate research dollars based on local needs. Long-running cultivar development and pest management programs would be disrupted or shut down entirely. Faculty positions tied to applied research would disappear, narrowing the pipeline of expertise available to farmers and Extension systems. Competitive grant programs, rather than filling the gap, would become harder to access as institutions lose the staffing and administrative capacity needed to apply for and manage them.

Perhaps most concerning, zeroing out capacity funding would accelerate an already troubling shift in the research landscape, moving away from farmer-driven, place-based, public-interest research and toward a system increasingly shaped by private incentives and short funding cycles. Once lost, this infrastructure is not easily rebuilt. Breeding programs, long-term trials, and regional research networks take decades to establish and only a single budget cycle to dismantle.

Capacity funding is not redundant or outdated. It is the connective tissue that allows public agricultural research to function as a coherent system. Removing it would weaken not only state and regional research, but the national research enterprise that depends on it.

Where This Leaves Us

Both public and private investments in agricultural research are essential. But they play different roles, and the balance between them matters.

In recent decades, U.S. public investment in agricultural research has declined as a share of total R&D, while private investment has grown. Internationally, the shift is even more concerning: between 2019 and 2021, China invested roughly twice as much public funding in agricultural R&D as the United States. Over the same period, U.S. agricultural productivity growth slowed while countries like China, Brazil, and India continued to see gains.

The reasons for this slow down are complex, but reductions in public research investment, and shifts away from research that improves input efficiency and farm-level resilience are likely part of the story. Public agricultural research is not about replacing private innovation. It’s about ensuring that farmers have access to knowledge, tools, and systems that serve long-term productivity, resilience, and public benefit. Especially when those outcomes don’t align neatly with quarterly earnings.

If we want a food system that can adapt to climate stress, regional challenges, and evolving markets, sustained public investment in agricultural research isn’t optional. It’s foundational.