Many people share the view that too little is invested in R & D in agriculture. The relationship between several measures of productivity and research expenditure was estimated using data from ABARE's surveys of broadacre industries and a new data series on R & D expenditure for the period 1953 to 1988. The internal rate of return to research was estimated to be in the range of 15 to 40 percent which does not provide strong evidence that Australia is either under-or over-investing in public research.

Investment in R&D has long been regarded as an important source of productivity growth in Australian agriculture. Perhaps because research lags are long, current investment in R&D is monitored closely. Investment in R&D has been flat while productivity growth has remained strong, relative both to other sectors of the Australian economy and to the agricultural sectors of other countries. Such productivity growth, at a time when the decline in terms of trade facing Australian farmers has slowed, may have enhanced the competitiveness of Australian agriculture. The econometric results presented here suggest no evidence of a decline in the returns from research from the 15 to 40 per cent per annum range estimated by Mullen and Cox. In fact the marginal impact of research increases with research over the range of investment levels experienced from 1953 to 2000, a finding which lends support to the view that there is underinvestment in agricultural research. These results were obtained from econometric models which maintain strong assumptions about how investments in research and extension translate into changes in TFP. Hence some caution in interpreting the results is warranted.

Seasonal climate forecasts (SCFs) from public institutions have been issued to Australian farmers since the late 1980s. Surveys suggest that 30–50% of farmers take seasonal climate forecasts into account when making farm management decisions. Even for the farmers who have adopted SCFs, integrating them into decisions on the farm seems to be a greater challenge than first thought. We use adoption theory to consider SCFs as an innovation presented to farmers. We consider the problem that SCFs is seeking to solve, the nature of the innovation, and how SCFs compare with other innovations that Australian farmers are encouraged to adopt. We conclude that there are unique challenges presented by the problem of managing climate uncertainty. Demonstrating the relative advantage of a probabilistic SCF is difficult because it is an information-based public good, relatively complex, difficult to trial, and only partially compatible with existing practices. In their favour, SCFs are free or relatively low cost and the information can be applied across different paddocks and different enterprises. We compare and contrast SCFs with other innovations that Australian farmers have been encouraged to adopt over their working life time, such as grain-price forecasts, new wheat varieties, the increased use of nitrogen fertiliser, no-tillage, and precision agriculture.

Public support for integrated pest management (IPM) is derived in part from concerns over food safety and the environment, yet few studies have assessed the economic value of health and environmental benefits of IPM. An approach is suggested for such an assessment and applied to the Virginia peanut IPM program. Effects of IPM on environmental risks posed by pesticides are assessed and society's willingness to pay to reduce those risks is estimated. The annual environmental benefits of the peanut IPM program are estimated at $844,000. The estimates of pesticide risks and willingness to pay can be applied elsewhere in economic assessments of IPM.

An important source of growth for Australian broadacre agriculture has been technical progress. We compare alternative measures of productivity growth including the traditional Tornqvist-Thiel total factor productivity index; variants of this approach that allow decreasing returns to scale; the Fisher ideal index; other nonparametric measures that do not impose particular functional forms and an econometric estimate from a translog industry cost function. The annual growth in productivity in broadacre agriculture over the period from 1953 to 1994 was in the range of 2.4 to 2.6 per cent and hence was quite robust to measurement technique.

An equilibrium displacement model of the world wool top industry is used to estimate the returns to Ihe Australian wool industry from productivity' improvements in farm production. in top making and in textile manufacturing. The returns to the industry from these different types of research and development are sensitive to the extent of substitution possibilities between Australian wool and other inpucs used by the wool processing and textile industries but i t appears that research resources have to be much more efficient in off-farm activities for the Australian wool industry to receive benefits similar to those from farm research activities. Our objective is to estimate returns to woolgrowers from equal percentage reductions in the cost of growing wool, top making and rextile processing.' The sensitivity of returns from R&D in these broad areas to changes in the demand and supply parameters that characrerise the world wool top industry is examined. The exchange between Freebairn, Edwards (1982, 1983), and Alston and Scobie (1983) suggested that the extent of input substitution was likely to be a crucial parameter. Our approach allows us to focus on that issue. Allowing substitution in top making between wool from different countries and between wool and processing inputs means that the Australian wool industry receives a larger share of the returns from farm research than from R&D in other sectors. It also means that the share of benefits it receives from R&D in these other sectors will be smaller than its share of the wool tax. Consequently. the WRDC needs to consider the distribution of the benefits from R&D as well as the total benefits to the entire wool chain. 32

The search for alternative fumigants has been ongoing since the 1992 Parties of the Montreal Protocol classified methyl bromide as a Class I controlled substance with an ozone depletion potential (ODP) of 0.7 and destined it for phase-out. This paper focuses on the hazards from fumigants proposed as alternatives for pre-plant soil fumigation in tomato production. We use the Environmental Impact Quotient (EIQ) developed by Kovach et al. to estimate the hazards from methyl bromide and the proposed alternative fumigants to workers, consumers, beneficial arthropods, birds, fish, and bees. Our findings indicate that iodomethane 98/2 has the lowest EIQ index value and field use rating, and is the alternative with the lowest relative risk. Among environmental categories, workers and beneficial arthropods experience the highest relative risks from the proposed tomato fumigants, and fish and consumers the least risks.

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