Fact of the Week: Enhanced Patent Protections Led to Increased Innovation and Productivity in the US Agricultural Sector

Source: Jacob Mascona, “Flowers of Invention: Patent Protection and Productivity Growth in US Agriculture,” November 2022.

Commentary: In 1985, patent protections for certain plant biotechnologies were introduced, depending on the plant’s reproductive structure. In a recent working paper, economist Jacob Mascona reviewed data on the technological development of affected (receiving the protections) and unaffected (not receiving the protections) plants. He found that the protections led to more innovation and higher yields for the affected crops—specifically, in the ten years following the introduction of the protections, affected crops saw a 119 percent relative increase in the development of novel plant varieties (translating to an additional 11 varieties developed each year) and an 11 percent increase in crop yields. Technological development was driven by an increase in private sector investment in response to expanded profit opportunities. Mascona also found that these investments had spillover effects and led to more innovation in certain non-biological agricultural technologies.

Mascona sums up his findings by saying, “Taken together, the results suggest that the prospect of patent protection spurred technological progress and increased downstream productivity and profits.”