whose costs are recoverable in the marketplace. There are also goods that benefit society as a whole rather than individuals and whose costs cannot be recovered in the marketplace (so-called public goods). Public sector funding is needed for such public-good work (Stiglitz 1993). A classic example of a public good would be an improved plant that can be propagated by farmers with little deterioration, as with self-pollinated (e.g., wheat and rice), or vegetatively propagated (e.g., potatoes) crops. If such crop improvement research were left to normal markets for private provision, then it would be systematically under-supplied. This is a typical feature.
The main reason why aid donors and foundations support international agricultural research is to ensure that public-good research of relevance to small-scale farmers and to complex tropical and subtropical environments is undertaken. If such research were wholly private, even in a perfectly functioning market, the demands of rich consumers for innovation in their own interests would overwhelm the price signals from poor consumers and small-scale farmers.
Given the limited resources so far available to them for research, the non-commercial (public and charitable foundation) sectors have achieved more than could have been expected (e.g., beta-carotene-enhanced rice and rice resistant to the yellow mottle virus).
We recommend that: (i) governments should fully recognize that there will always be public interest/goods research requiring public investment even in the market-driven economy; it is imperative that public funding of research in this area is maintained at least at its present level in both CGIAR and national research institutions; (ii) governments, international organizations and aid agencies should acknowledge that plant genomics research is a legitimate and important object for public funding, and that the results of such research should be placed in the public domain;