Returns from agricultural research

Nevertheless, as research expenditures have increased and as the beneficial effects of many investigations have become more subtle and less immediately obvious, the demand has grown for objective evidence, in economic terms, of the returns that accrue from research investments.

It is not easy to develop satisfactory techniques for measuring these returns and any such technique involves a range of assumptions which influences the final conclusions.[45] Nevertheless the several cost-benefit studies of agricultural research productivity that have been made in Australia and overseas, have concluded that the annual internal rate of return generally varies between 20 and 80 per cent.[46] There is wide agreement in Australia with the conclusion reached by Scobie, who assessed the contribution made by agricultural research in New Zealand since 1926:

The return on research comes over an extended period; in fact the best estimate is 23 years. But the size of the annual real rate of return to investment in research is around 30 per cent. This is a substantial return, and is well above the rate of 10 per cent used as a guide to the minimum acceptable return to public investment.[47]

Even before the discoveries and advances of the last 50 years had been made, Sir David Rivett, the Chief Executive Officer of CSIR, was to say in a letter (1932) to his Minister that 'The call from the primary producer has never been so urgent nor has the confidence in scientific aid ever been so pronounced.'[48]

It was this enthusiasm for research and the willingness to support it, on the part of the rural community, that made agricultural science in Australia such an exciting, successful and expanding activity during the first 70 years of the present century.

Australian Academy of Technological Sciences and Engineering