Organizer) EFFICIENCY OF INCOME TRANSFERS TO FARMERS THROUGH PUBLIC AGRICULTURAL RESEARCH: THEORY AND EVIDENCE FROM THE UNITED STATES

Studies of the efficiency of redistribution through agricultural commodity markets have focused on transfers made using domestic pol-icy instruments, such as subsidies and quo-tas, and trade protection instruments, such as import tariffs and export subsidies. These in-struments transfer income to producers from domestic consumers or domestic taxpayers (and occasionally to or from foreigners). My own recent estimates (Alston 2007) indicate that for every dollar of U.S. government spend-ing on farm subsidies, farmers (in their ca-pacity as both landowners and suppliers of other farming inputs such as labor and man-agerial inputs) receive about 50 cents, land-lords who rent land to farmers receive about 25 cents, domestic and foreign consumers receive about 20 cents, and 5 cents are wasted. Addi-tional amounts are wasted collecting taxes to finance the spending and in administering the policies—perhaps another 20 cents per dollar. If the purpose is to transfer income to farm-ers, the mechanism is very inefficient. Expen-diture on farm programs of $20 billion per year (with an opportunity cost of, say, $24 billion) in typical recent years yielded benefits of about $10 billion to farmers, such that the average transfer efficiency ($10 billion divided by $24 billion) was less than 42%