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Weeds R&D investment analysis

This study reviews previous investments in weed RD&E and uses the resulting data to complete a series of ex ante benefit cost analyses of proposed LPI Weed Pillar investments. LPI Weed Pillar investments cover the period from 2014 and are grouped under four themes.  Page and Lacey (2006) demonstrated that for every dollar invested in weed biocontrol a benefit to agriculture of $17.40 is generated. This comprehensive analysis became the yardstick by which proposed LPI investments in weed RD&E were judged i.e. each theme must achieve at least a Benefit Cost Ratio (BCR) of 17.4:1, or have a sound reason based in strategy, for achieving a lower level of performance. Table E1 shows that for each of the proposed LPI Weed Pillar themes, BCRs exceed the biocontrol investment yardstick. The highest BCR is achieved by theme 4 the analysis of which assumes a shortening of the period before benefits commence. Analysis results are consistent with ex poste BCAs completed for other weed investments reviewed in this report. 

Total MLA investment in the Weeds Pillar has been modelled assuming an annual investment of $1.5 million for five years. Total net present value (NPV) is estimated at $109.94 million and the total BCR is estimated at 22.9:1 i.e. for every dollar invested by MLA a return of $22.90 is forecast for livestock producers. This forecast return on investment is net of spillover benefits to the broader Australian community. Spillover benefits are quantified in the body of the report and include environmental gains (e.g. biodiversity, habitat and ecosystem protection) and social benefits (e.g. decreased health impacts from weeds). 

 The original terms of reference required a total Weeds Pillar analysis for alternative MLA investments i.e. a total MLA investment of $1 million and $2 million per annum. More detail is needed on the portfolio before these analyses can be completed with any confidence. Additional insight required includes the link between additional MLA investment and the shortening of lapsed time before benefits are realised by livestock producers. This type of information might be generated from consultation with researchers once projects within the Pillar are better understood.

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This page was last updated on 24/07/2017

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