Innovation, Agricultural Productivity and Sustainability in the United States is part of the OECD Food and Agricultural Reviews series. This review was undertaken at the request of the US Department of Agriculture. We are particularly grateful for the support for this study from the USDA UnderSecretary for Research, Education, and Economics Dr. Catherine Woteki.

The US food and agriculture sector is well-positioned to meet the diverse and increasing demand for food, feed, fuel and fibre at the national and global levels. It is competitive and market-oriented, characterised by abundant arable and pasture land, strong and innovative farm and agri-food businesses, and a large domestic consumer market. In addition, high Total Factor Productivity (TFP), largely driven by farm consolidation and the continuous and widespread adoption of innovation, enables sustained agricultural production growth. This report examines the extent to which various policies affect innovation, structural change, and natural resource use, and thereby help maintain current productivity growth and improve resilience to risk, while addressing important sustainability challenges, such as those related to water management and climate change. It also identifies policy areas that would need to be improved.

This chapter introduces the framework used to analyse the extent to which US policies foster productivity and sustainability in the food and agriculture sector and presents an overview of findings. Specific policy recommendations are made for each policy area reviewed.

This chapter outlines the main challenges and opportunities for the US food and agriculture sector, and the drivers of its performance, including innovation. It outlines the contribution of the sector to the economy, and the natural resource base upon which it relies. It identifies the main structural characteristics of primary agricultural and upstream and downstream industries; describes the main food and agriculture outputs and markets; reviews trends in farm and household income performance; and analyses developments in agricultural productivity and sustainability, and their main drivers: innovation, natural resources, climate change, and structural change – which in turn are influenced by a range of policies.

This chapter outlines the importance of economic stability and public institutions in fostering public and private investment. It provides an overview of the performance of the overall economy, outlines macroeconomic developments and challenges, explains the federal-state-local governance system, and presents an evaluation of public institutions.

This chapter reviews general incentives for investment decisions by US farms and agribusinesses. Those decisions affect the development and diffusion of innovations, the pace of productivity growth, and the sustainability of food production. They are in turn affected by a range of government regulatory policies, which can encourage or deter investments. While some US regulations are statespecific, most regulatory policies covered in this chapter are federal, and apply across all states. Some are general, covering all firms in the economy, while important elements of others are specific to agriculture. The chapter starts with the overall regulatory environment as it focuses on the behaviour of firms and farms, and surveys broad-based policy regarding taxes, finance, and international trade and investment.

This chapter outlines the role of infrastructure capacity, skills and education in facilitating innovation in agri-food. It describes the governance of policies to improve rural infrastructure, outlines main regional programmes and reviews briefly the quality and coverage of rural services. It then discusses efforts to respond to skills demand from the agri-food sector through labour, immigration and education policy. It also reports on trends in education expenditure and outlines the performance of the education system. Finally, it provides an overview of education levels in agricultural and enrolment in agricultural programmes, outlining the gap between skills supply and demand in the sector.

This chapter provides an overview of agricultural policies, focusing on commodity, crop insurance, conservation and energy programmes, and a brief discussion of agricultural-trade related measures. It also reports trends on the level and composition of support and discusses the likely impacts of agricultural policy measures on structural change, environmental performance and innovation in the sector.

This chapter describes the US Agricultural Innovation System in relation with the general innovation system, outlining how it adjusted to changes in the global science landscape. It presents main actors and their roles in the system, and provides an overview of governance mechanisms. It also describes main trends in public and private investments in R&D, and discusses complementarities and changes in funding mechanisms. It provides an overview of policy incentives for fostering innovation, outlining the role of farm extension, Intellectual property rights, tax incentives and public-private partnerships, and reports evidence on R&D outputs and impacts, as well as examples of adoption of innovation. Finally, the role of US agricultural science in international co-operation is discussed.