Measuring the returns to investment in R&D in the West Australian grains industry

Abstract

Equilibrium Displacement Models (EDMs) are useful for estimating the net benefits of investments in agricultural research, development and extension (RD&E) and the distribution of these benefits between producers and other participants in the value chain. Information from these models can inform investment decisions by funders of RD&E. In this paper the design and construction of an EDM for the Western Australian grains industry, a major component of the national grains industry, is reported. Using the EDM, two RD&E investment scenarios are examined. The first scenario is for a 1 per cent reduction in the cost of farm production inputs as a result of an investment in RD&E, while the second s..