In the past, before any measurable government involvement in organic agriculture, much of the research was initiated and undertaken by producers who, often by trial and error, established what did and did not work. The increase in government funding over recent years means that a rethink of priorities for the whole of organic agriculture is in order. It is becoming clear that interests and objectives may conflict and that some trade-offs are necessary. Some of the divergent interests and motivations and the relationships between them are illustrated in Figure 1.
Figure 1: Diverse stakeholders' research interests
Producers are likely to be concerned with enhancing farm productivity, producing more output with the same inputs (or the same output with less inputs) and price of the product. Producers and other groups may have other objectives, such as improving environmental benefits (or reducing costs) and enhancing food safety. Along with (wholesale and retail) market traders, they may also be interested in increasing the size of the organic agriculture industry.
Consumers are concerned with food safety, nutrition, availability and price. Some may also be concerned with environmental impacts associated with the production, distribution and consumption of the products they purchase. They have few means of influencing the agricultural production process except by exercising consumer sovereignty and reflecting preferences in their purchases.
Wholesale and retail traders, providing the marketing functions in between the producer and consumer, are interested in availability of supply of a consistent quality, and are generally motivated by commercial considerations.
Environmentalists emphasise the effect agricultural production has on the rest of the natural environment. They may also be consumers or producers.
Research is determined as often as not by the individual researcher's interests or inclination rather than an assessment of the overall costs and benefits of available funds. Individual researchers may enjoy working on their pet projects, may wish to employ particular techniques or work with a set of data with which they are familiar even if their project is not the most productive.
In summary, the objectives of different groups are probably rather diverse within the groups, and certainly between the groups.
Governments are likely to, or at least should, take a wider perspective, as it is the responsibility of government to make decisions for the benefit of all of society. Governments use research as the basis for policy decisions, and are concerned about consumer safety, industry profitability, environmental issues and strategic research capability. It is assumed here that the overall objective of government funding into organic agriculture is to stimulate growth of organic agriculture in an efficient way.
Much research funding is provided by government sources. How can the taxpayers' money be put to most efficient use? Funding bodies invariably have a limited budget and numerous potential projects to fund. How should they decide what to fund and what not?
To focus the mind on efficient ways to allocate research money it is useful to consider the relationship between the different types of research. The pipeline model or concept is the traditional approach to analysing research benefits. This model sees a linear relationship from basic research through applied research and new technology to productivity (see Figure 2).
Money spent in basic research (for example, to find out how soil organisms, such as mycorrhiza, operate or are stimulated) leads to applied research (effect of presence of organism on crop yield) to new technology (crop management which stimulates the organism) and finally to increased productivity (higher crop yields). Traditionally, the four groups are seen as distinct with no feedback, but there may be considerable lags, risks and scope for unforeseen consequences in the process. Despite its limitations1, the simple pipeline model highlights some relevant issues. The benefits of basic research take much longer to come to fruition than those of applied research as the latter is closer to implementation. Benefits obtained now are worth more than the same benefit not received until later. This favours investing in applied research, innovation and extension.
A second influence concerns obsolescence. Most researchers could probably recall work that seemed useful at the time, but rapidly became irrelevant. Research is a risky business. Obsolescence is more likely to occur when long lead times are involved, such as with plantation crops. Plenty of wine growers have been caught out developing the wrong variety when tastes have changed.
Expenditure and benefits
Capture of benefits
A related implication concerns the impact of one component in the pipeline on the next. To what extent, for example, does applied research contribute to a new technology? Funds should be invested where these relationships are closest. Research into mechanical weeding methods is one area where results can be immediately adapted and productivity gains obtained immediately. Plant breeding is much more subject to risk.
The transfer of knowledge abroad is an important aspect of research, and relates to capturing the benefits. While individual researchers may like their new-found knowledge to be spread far and wide, this does not necessarily apply to funding bodies. Productivity enhancements that are taken up by farmers in other countries imply that the gains from research, which accrue mainly to consumers, will ultimately benefit many who have not funded the research. This is a variation of a point made in a national context in an earlier paper by Wynen (1997), namely that most of the benefits of productivity enhancement ultimately accrue to consumers rather than producers. Such developments, through improved plant breeding for example, provide temporary gains for domestic farms until other farmers catch up and adopt similar technology. New technologies that prove to be effective are quickly taken up by farmers within an industry. Competitive forces keep farm profits down to a minimum (see, as an example in organic production, Hamm and Michelsen (1996, p.211), who discuss the drop in farm-gate price in Germany when more organic wheat came into the EU market from Eastern Europe). With an efficiently operating marketing system, the productivity gains ultimately accrue to consumers and others at the end of the marketing chain, including foreign consumers. Although, from the point of view of those involved in organic agriculture national boundaries may not be important, a national government is likely to keep these relationships in mind when funding research. This is the case especially if uptake of the technology can be rapid, and adoption by other countries would hasten the downward pressure on domestic producer prices. Some governments have attempted to limit the leakage of gains to foreign competitors by prohibiting the export of breeding stock or other genetic material, for example.
In countries where organic agriculture does not receive much funding, those countries may be better off by not undertaking their own research and merely using the knowledge generated elsewhere. The UK study recognises that by including the option of transfer of research results specifically in its objectives. However, for agriculture in general and organic management in particular, direct technology transfer may not always be applicable. Differences in soils, climate and ecology imply that research knowledge can be very specific and not readily transferred between locations. While the use of particular machinery may possibly be widely applied, the transfer of disease resistant varieties may not be so relevant, as different diseases may be specific to particular localities. Research funding bodies need to assess these possibilities in each case.
Estimating the likely benefits from research is difficult, yet essential for effective decision making. Estimates must be made of the chances of a successful outcome, the benefits to individual stakeholders if adoption of the new technology or technique occurs, the probability of adoption, and the time profile of the costs and benefits. Models exist to help funding bodies to weigh the importance of these various factors. One example is the REVS model (1994), developed by the West Australian Department of Agriculture. While such models greatly assist thinking, much subjectivity remains. However, the results can help in prioritising projects, when funding is scarce.
A final important point concerns trade-offs. This is probably the main difference in thinking between economists and other scientists. With a limit to the availability of funds, advances made in one area come at the cost of little being achieved in others. Furthermore, some successful research outcomes may have detrimental impacts on other objectives. An example is the increased livestock used in organic rotations that may cause increased methane emissions to the detriment of global warming objectives.
Apart from those points, which are valid for research in general, there are some matters specific to organic agriculture. One issue is the holistic approach to farming, based on the view that the total system is more than the sum of its parts - the notion of synergism. Organic agriculture has struggled with this concept over the years. Niggli and Lockeretz (1996) mention that researchers had made little progress in finding ways to implement it in practice. Lund (1998) notes that, in the Nordic countries, this topic is seen as an essential element of research into organic agriculture, and mentions methods of analysis which have drawn attention as promoted by Odum (1988), Checkland (1981) and Bawden (1995). However, progress is slow, and perhaps less than 10 per cent of projects is being undertaken in this way. Few researchers have been trained to use holistic techniques.
A second issue specific to organic agriculture is that of separate funding. Because organic agriculture is often seen as a threat to the dominant paradigm, there is an argument that funding allocation for research into organic agriculture should be separate from that in conventional agriculture. The main reason is that those not familiar with organic agriculture would not be able to adequately judge the priorities within organic agriculture, nor be able to decide on an appropriate distribution of funds between projects of the different paradigms. A more efficient way of allocating organic research funds is by having a separate amount set aside for organic agriculture, and using experts in organic agriculture to adjudicate on the topics for which it is to be used (for more details see Wynen 1996).
2.2 Expanding the organic industry
In the previous section we assumed that among the divergent aims and objectives of organic agricultural research, one predominant aim is to find the most efficient way of having organic agricultural methods adopted by the largest numbers of producers. In order to be able to reason ourselves towards answering the question of how best to do that, it is necessary to consider the whole scene of organic farming from production through to the final consumer of the product.
While organic production costs are often higher than those of conventional products, it is inevitable that some of the cost-increase is passed on to the consumer as higher prices. Without doubt, consumption of organic products would be much higher if prices of organic and conventional products were similar. And producers would be more confident about moving to organic agriculture if they were assured of demand, even when many farmers were to change management method. The question is then how lower consumer prices can be achieved.
One sometimes hears people blame the producer for high product prices. But it is often forgotten that the price paid to the producer is only a small part of the total price, which incorporates services such as transport, insurance, and distribution, that is, marketing. For example, Kleijn et al. (1990) compared organic and conventional prices of four products both at producer and consumer levels in The Netherlands (see Table 1). The consumer price incorporates not only the price paid to the producers, but also the marketing functions.