Economic Returns to Agricultural Research: Thailand and Indonesia

Abstract

In both Thailand and Indonesia, the public sector’s agricultural research investments have substantially contributed to agricultural productivity growth, as have international investments in agricultural research, through the Consortium of International Agricultural Research Centers (CGIAR) system. But both countries’ own expenditures on agricultural extension failed to produce significant productivity benefits. These findings imply that the magnitude of domestic investment in agricultural research is suboptimal in both countries. This is reflected in estimated marginal rates of return to this form of expenditure of between 25 percent and 30 percent per annum in real terms, well above the rates of return normally expected from public investments.