2009, Volume 17, Paper 13
ISSN: 1883-5675

Estimating the economic impact of a major beef industry research and development investment: the renewal of the Cooperative Research Centre for Beef Genetic Technologies

G.R. Griffith

Abstract

The expected benefits from the proposed scientific programs of the recently renewed CRC for Beef Genetic Technologies were estimated using the DREAM economic modelling framework. A with-CRC versus without-CRC approach was used. Based on a consensus data gathering process, different assumptions were made about levels of investment, rates of improvement in meat quality, rates of productivity improvement, probabilities of success and rates and levels of adoption. The two scenarios were compared in separate demand and supply analyses that incorporated data on prices, quantities and market elasticity values for each Australian state and the major beef trading countries. Total estimated benefits from the with-CRC scenarios were in the order of $1.930b. The present value of the full cost of the CRC program was $98m when discounted. This resulted in a NPV of $1.831b and a BCR of 19.7:1. Total estimated benefits from the without-CRC scenarios were $516m with total costs of $58m. This resulted in a NPV of $458m and a BCR of 8.9:1. Thus, the benefit from the extra investment and consequent research effort was estimated to be worth over $1.4b in present value terms. Every $1 of these extra resources brought into the Australian beef industry through funding the new Beef CRC was expected to return around $35 to the industry.

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