Growth and competitiveness. S&T underpin the innovation that is needed to promote economic growth and enhance competitiveness. Agriculture is a critical sector in many countries, especially low-income countries. Although complementary investments in policy reform, markets, and institutions are necessary, investment in S&T is a key element in enhancing a country’s competitive advantage by reducing production costs, improving product quality, and generally increasing efficiency along the commodity chain.  Box 2.2 Past contributions of science and technology The historical focus of research on food crop technologies, especially genetic improvement of food crops, has been undeniably successful. Average crop yields in developing countries have increased by 71 percent since 1961, while average grain yields have doubled (to 2.8 tons per hectare). Yields of many commercial crops and livestock have also grown rapidly (see figure). 
 Source: FAOSTAT 2002 |
Poverty reduction. Investment in agricultural research has major impacts on poverty reduction through direct effects on producer incomes, indirect effects on consumer welfare through lower food prices, employment and wage effects, and growth-induced effects throughout the economy (box 2.2). Studies by IFPRI on the impacts of public investment in India and China show agricultural R&D to have higher impacts on poverty reduction compared to most other public investments, second only to investment in education in China and rural roads in India (Fan, Zhang, and Zhang 2000; Fan, Hazell, and Thorat 1999). Studies show that in low-income countries, a 1 percent increase in agricultural yields leads to a 0.8 percent reduction in the number of people below the poverty line (Thirtle, Lin, and Piesse 2003). Over the long term, effects on food prices are especially important, as food is a large share of the expenditures of poor households. Employment and wage effects of labor-intensive production and value-added processing are especially important to poor people, who depend relatively more on wage labor (box 2.3). Â Food security. By 2020, IFPRI projects that food needs in developing countries will increase by nearly 600 million tons, which is equal to one-third of current world food production. To ensure global food security, continued investment is needed to increase productivity and strengthen the environmental sustainability of production systems. Investments in technology must also enhance household food security by increasing the productivity of household food production, smoothing the seasonal availability of food, mitigating the effects of drought, and improving the nutritional content of food. Â   Â 
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