Is agricultural research still a public good?

Biotechnology is redefining the nature of agricultural research and intellectual property. In response, public agricultural research institutions are increasingly protecting their intellectual property and commercializing research results. This raises the question: Is agricultural research still a public good? This paper is a critical first step in understanding how increasingly private ownership of intellectual property affects the agribusiness environment and the evolving role of public agricultural research institutions. The innovative step is the development of a neo‐Schumpeterian model which examines whether commercialization of public research maximizes social welfare. The model contains two types of research firms: large firms such as the major life‐science companies; and small university‐related firms (SMURFs). Results show that both large firms and SMURFs underinvest in research relative to the social optimum, that research investment can exhibit cyclical behavior, and that there is a continued, albeit diminished, role for public agricultural research as the life‐science revolution progresses. [JEL Classifications: Q13, O34, L10] © 2000 John Wiley & Sons, Inc.