The Rate of Return to Agricultural Research in a Small Country: The Case of Beef Cattle Research in Canada

Abstract

The net economic benefits of Canadian federal beef cattle research programs were estimated using the economic surplus approach. The internal rate of return to research expenditure from 1968 to 1984 was found to be 63% at the margin, indicating substantia] underinvestment in technological change. Rates of return indicative of underinvestment were found even when an adjustment was made to research costs to reflect the marginal excess burden of taxation. Most of the benefits of beef cattle research conducted during this time period accrued to Canadian beef producers. Les bénéfices économiques nets des programmes de recherche fédéraux Canadiens sur le boeuf sont estimés en utilisant ľapproche du surplus économique. Le taux interne de rendement des défenses de recherche effectuées de 1968 à 1984 est établi à 63%, indiquant un sous‐investissement substantiel dans le changement technologique. Même en incluant la perte de bien‐être due à ľimposition ďune taxe, ľétude montre un sous‐investissement dans la recherche. La plupart des bénéfices de la recherche sur le boeuf effectuée durant cette période ont profité aux producteurs agricoles.

The economic value of plant systematics in Canadian agriculture

“…Evenson et al (1979) produced the even more startling figure of 50 % annually for economic benefits from government-supported research in U.S. agriculture. Widmer et al (1988) estimated that each dollar spent on beef cattle research increased the economic welfare of Canadian beef producers by over $40. Nagy and Furtan (1978) estimated an annual rate of return to rapeseed breeding research in western Canada of over loo%, while Brinkman and Prentice (1985) estimated the average rate of return to all investments in agricultural research in Ontario to be over 65%, equivalent to a benefit to cost ratio of 37: 1.…”

Optimal Collective Investment in Generic Advertising, Export Market Promotion and Cost‐of‐Production‐Reducing Research

“…This value is consistent with previously reported supply elasticities and is used here. Widmer et al (1988) estimated supply response elasticities for production research in the Canadian beef industry. Short-run elasticities range from 0.01 to 0.04, with the long-run elasticity reported at 0.36.…”

Interdisciplinary Agricultural Research in Canada

“…Beginning in the early 1980s, the Research Branch contracted a number of economic studies on its research programs and used the results as input for major strategic decisions taken on research directions (Prentice and Brinkman 1982;Zentner and Peterson 1984;Fox et al 1987;Widmer et al 1988;Horbasz et al 1988;Huot et al 1989;Carew et al 1992;Klein et al 1994;Oxley et al 1996). Beginning in the early 1980s, the Research Branch contracted a number of economic studies on its research programs and used the results as input for major strategic decisions taken on research directions (Prentice and Brinkman 1982;Zentner and Peterson 1984;Fox et al 1987;Widmer et al 1988;Horbasz et al 1988;Huot et al 1989;Carew et al 1992;Klein et al 1994;Oxley et al 1996).…”

“…Less visible, though at least as important, was the creation of a demand by research managers for assistance in the evaluation, prioritization and planning of research programs. Beginning in the early 1980s, the Research Branch contracted a number of economic studies on its research programs and used the results as input for major strategic decisions taken on research directions (Prentice and Brinkman 1982;Zentner and Peterson 1984;Fox et al 1987;Widmer et al 1988;Horbasz et al 1988;Huot et al 1989;Carew et al 1992;Klein et al 1994;Oxley et al 1996).…”