Economic Review of the Victorian Oilseeds Research Program

During the period 1980-94, the area of canola planted in Victoria expanded from the 2,500 hectares to 74,500 hectares, and by 1994 accounted for over 70 per cent of the gross value of production of all oilseeds in the state and 80 per cent of the oilseeds research expenditure. Due to the dominance of Victorian oilseeds production by canola, the quantitative benefit-cost analysis of the oilseeds industry was restricted to this commodity. During the period 1980-94 the yield of canola increased at a mean rate of 3.3 per cent per annum. Ex post (1980-95) and ex ante (1995-98) quantitative benefit-cost analyses of the Victorian canola research program were performed using the linear programming model PRISM. The benefit-cost ratio for the ex post evaluation was found to be 1.6 (that is, for every $1 invested the return was $1.60). This reflects the establishement phase that the industry under went during this period, when expenditures were initially high relative to returns. The ex ante evaluation returned a benefit-cost ratio of 3.0 due to the increased benefits generated by higher yields and the larger area of canola grown in the mid 1990s. The benefit cost ratio for the entire program (1980-98) was predicted to rise to 1.9 by 1998.