2010, Volume 18, Paper 2
ISSN: 1883-5675

Trends in investment in Agricultural R & D in Australia and its potential contribution to productivity

John Mullen – Adjunct Professor, ILWS, Charles Sturt University

Introduction

Within the Australian economy, productivity growth in agriculture, fisheries and forestry sector has been around 3 times that in the economy as a whole (ABS, 2007) and has markedly outpaced the decline in the terms of trade facing farmers over the past 15 years. International comparisons are difficult to make but the evidence available suggests that Australian agriculture has performed well against the agricultural sectors of most other counties (Mullen, 2007, Mullen and Crean, 2007, Mullen, 2009).
However since these earlier papers, ABARE has revised downwards its estimate of long term productivity growth in broadacre agriculture previously reported by Mullen in various papers to be 2.5% per year since 1953 to about 2% per year. But of greater interest, it is now clear that productivity growth in broadacre agriculture has declined in the ten years to 2007 (-1.4% per year). Clearly a run of poor seasons explains some of this slowdown in productivity growth but public investment in R&D in agriculture has been stagnant since the 70s and it seems likely that this stagnation is now being reflected in broadacre productivity growth. The objectives of this paper are to briefly review trends in productivity growth and then examine recent trends in investment in R & D both in terms of total investment, how it is being funded and where it is being undertaken. Scenarios are developed which assess the potential contribution of domestic investment in R&D to productivity growth in agriculture. This paper updates a paper by Mullen and Orr (2007).  

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