Measuring the benefits from R&D investment beyond the farm gate: the case of the WA wine industry

Abstract

Evaluations of public sector agricultural research and development (R&D) often focus on farm level benefits. Flow-on benefits that accrue to other sectors such as processing and marketing typically are ignored. This paper however includes these benefits. Using the Western Australian wine industry as an example this paper highlights the relative importance of farm and flow-on benefits generated by farm-level R&D. A wine industry value chain model is used to measure these benefits. The benefits per dollar of R&D investment are found to be $2.8 at the farm level compared to$14.9 when flow-on benefits are taken into account. In this case, solely reporting farm level benefits hugely understates the returns to the R&D investment. The R&D policy implications of the inclusion of flow-on benefits are discussed briefly.R&D investment, Benefit cost analysis, Value chain modelling, wine.,