It is often argued that public support of agricultural research is inadequate. However, the empirical papers that support this hypothesis rarely reflect formal behavioral theory capable of explaining this phenomenon. This paper presents a theory that explains underfunding, namely, that funding agencies respond too slowly to secular changes in the value of research. A model of farmer and funding agency behavior is presented, and shown to imply that actual research funding will be consistently smaller than optimal funding. The assumptions and results of the model are explained in terms of the institutional literature on public agricultural research agencies.