Source: Own calculations.

Source: Own calculations.

derive mainly (86%) from indirect effects, and this is also the case for the rural poor (73%). In this case, the main role of technological change is consequently to lower the price of food, and this will have to occur principally in the fields of the large farmers since this is where most of the land is located. Clearly, at higher levels of geographical disaggregation, direct effects may also dominate in specific Asian and Latin American regions, requiring region-specific targeting of research budgets across innovations producing either direct or indirect effects.

We conclude that, if there are trade-offs between creating direct and indirect effects due to constraints on research budgets, care must be taken to allocate budgets optimally between these technological options to maximize poverty reduction. While surprisingly little formal analysis has been made of these trade-offs, optimum allocation needs to be determined for each nation and region for which research programs are organized.

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