Efficiency and equity issues in ex ante allocation of research resources

The paper discusses economic factors in making ex ante decisions about the allocation of resources to research. A proper balance between basic and applied adaptive research is required. This ensures that possibilities for further advances on the basic scientific frontier continue to occur, from which applied research can draw. Agronomic and cropping systems research can have their highest pay-offs in large homogeneous zones rather than in small, heterogeneous ones. In the latter, farmers' own informal experimental methods may often be preferred. Varietal research is less location-specific and can have wider applicability, even in relatively heterogeneous regions. Publicly-funded research should complement and not compete with private research. The latter generally concentrates on research where the benefits can be appropriated such as in fertilizers, pesticides, herbicides, mechanical equipment and hybrid seeds. Generally speaking, resources should be allocated to research on production factors in such a way that the results will increase the productivity of those factors in relatively short supply more than the productivity of those in relatively abundant supply. On these grounds labour-saving innovations in India, which has low and relatively stagnant wage rates, cannot be justified on either efficiency or equity grounds. If research is to be aimed at helping the poorest consumers it should stress commodities with low price and income elasticities. This also helps small subsistence producers relative to large commercial farmers. If it is to help maximize producer incomes and/or agricultural employment, resources could be concentrated on commodities with high elasticities. Expected regional impacts of research can be analyzed using the simple tools of benefit-cost and partial equilibrium analysis to assist decision-makers in all the issue