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Public investment in R&D and extension and productivity in Australian broadacre agriculture

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  • Sheng, Yu
  • Gray, Emily M.
  • Mullen, John D.

Abstract

This paper uses time-series data to examine the relationship between public research and development (R&D) and extension investment and productivity growth in Australian broadacre agriculture. The results show that public R&D investment has significantly promoted productivity growth in Australia’s broadacre sector over the past five decades (1953 to 2007). Moreover, the relative contributions of domestic and foreign R&D have been roughly equal, accounting for an estimated 0.6 per cent and 0.63 per cent of annual total factor productivity (TFP) growth in the broadacre sector, respectively. The elasticity of TFP to knowledge stocks of research (both domestic and foreign) and extension were estimated to be around 0.20–0.24 and 0.07–0.15, respectively. The ranges reflect the alternative distributions of benefits flowing from knowledge stocks that were assumed in the analysis. The elasticities translated into internal rates of return (IRRs) of around 15.4–38.2 per cent and 32.6–57.1 per cent a year for research and extension, respectively. While such rates are less than the average IRR of around 100 per cent reported in the international literature, they are consistent with previous estimates for Australian agriculture in the order of 15–40 per cent.

Suggested Citation

  • Sheng, Yu & Gray, Emily M. & Mullen, John D., 2011. "Public investment in R&D and extension and productivity in Australian broadacre agriculture," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100712, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare11:100712
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    File URL: http://purl.umn.edu/100712
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    References listed on IDEAS

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    1. Christopher J. O'Donnell, 2010. "Measuring and decomposing agricultural productivity and profitability change ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 527-560, October.
    2. Wallace E. Huffman & Robert E. Evenson, 2006. "Do Formula or Competitive Grant Funds Have Greater Impacts on State Agricultural Productivity?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 783-798.
    3. Sheng, Yu & Mullen, John D. & Zhao, Shiji, 2010. "Has growth in productivity in Australian broadacre agriculture slowed?," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 59266, Australian Agricultural and Resource Economics Society.
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    Cited by:

    1. Daowei Sun & Paul Hyland & Ockie Bosch, 2015. "A Systemic View of Innovation Adoption in the Australian Beef Industry," Systems Research and Behavioral Science, Wiley Blackwell, vol. 32(6), pages 646-657, November.
    2. Khan, Farid & Salim, Ruhul, 2015. "The Public R&D and Productivity Growth in Australian Broadacre Agriculture: A Cointegration and Causality Approach," 2015 Conference (59th), February 10-13, 2015, Rotorua, New Zealand 204432, Australian Agricultural and Resource Economics Society.
    3. Hasan DUDU & Zuzana Smeets Kristkova, 2017. "Impact of CAP Pillar II Payments on Agricultural Productivity," JRC Working Papers JRC106591, Joint Research Centre (Seville site).
    4. Perks, Christopher & McGill, Kristin & Curtotti, Robert, 2011. "Vessel-level productivity in Commonwealth fisheries," 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia 100694, Australian Agricultural and Resource Economics Society.
    5. Mullen, John D., 2011. "Public investment in agricultural research and development in Australia remains a sensible policy option," AFBM Journal, Australasian Farm Business Management Network, vol. 8(2).

    More about this item

    Keywords

    R&D; total factor productivity; agriculture; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies;

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