Research payoffs from quality improvement : the case of protein in Australian wheat

A model is developed for evaluating the size and distribution of the economic benefits from research that improves the quality of an export commodity. Quality improvement, achieved by research or by agronomic practices, shifts the domestic and/or excess demand curves for an export commodity. Research costs are not modeled, but any shift in the supply curve (due to a change in yield, for example) accompanying the quality improvement is included. The model is used to estimate the gains from research that increases protein content in Australian wheat. It is estimated that Australia has the potential to obtain net benefits up to A$53 million per year from a one percentage point increase in the protein content in wheat. Over 90% of these gains accrue to wheat producers