An Economic Analysis of GRDC Investment in the - Grains Research ...

Table 16: Investment Criteria for GRDC Investment
(discount rate 5%)
Criterion 0 years 5 years 10 years 15 years 20 years
Present value of 531 636 660 660 660
benefits (m$)
Present value of 28 28 28 28 28
costs (m$)
Net present value 503 608 632 632 632
(m$)
Benefit cost ratio 18.8 22.5 23.4 23.4 23.4
Internal rate of
return (%)
506 506 506 506 506
In terms of the quantified benefits, 100% could be attributed to the productivity and
adding value component of the rural research priorities.
The cash flow of benefits is shown in Figure 1 for both the total investment and for the
GRDC investment.
These high rates of return should not be unexpected since evaluations of ongoing wheat
breeding efforts around the world continue to show significant benefits. For example the
annual benefits associated with CIMMYT-derived germplasm have been estimated at 0.5
to US$ 1.5 billion (2002 dollar terms) for an annual investment of about US$10 million
(Lantican et al, 2005).
Figure 1: Annual Benefit Cash Flow
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