Grain Research Funding in Australia: Lessons from International Experience
The Australian grain research system has undergone a profound transformation over the past 25 years. This began with the creation of Grains Research Development Corporation, which gave producers a voice within a national research system. In the second phase of development, the GRDC tendered for the development of three for profit public corporations (AGT, HRZ and InterGrain) that would invest revenues from endpoint royalties (EPRs) to fund wheat breeding. This new funding for breeding allowed the GRDC to move upstream to focus on pre-breeding research efforts. As of 2012, these breeding firms had each acquired a multinational private partner and had collectively reached the point where end point royalties were sufficient to cover breeding costs. While this transformation has been successful at increasing private research investment, it has also created a toll good industry with inherent financial risk, economies of size, and barriers to entry with incentives for market concentration and monopoly pricing. The North American experience in hybrid crop sectors suggests that producers are likely to continue to see increasing prices for varieties, perhaps with only a small portion of end point royalties being reinvested in breeding activities.
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- Kingwell, Ross S., 2005. "Institutional Change and Plant Variety Provisions in Australia," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 13.
- Commission, Productivity, 2011. "Rural Research and Development Corporations," Inquiry Reports, Productivity Commission, Government of Australia, number 52.
- Murray Fulton, 1997. "The Economics of Intellectual Property Rights: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(5), pages 1592-1594.
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