A resource allocation model to guide R & D investment decisions for the Australian sugar industry

A resource allocation model was produced to assist the Sugar Research and Development Corporation (SRDC) and other interested bodies in resource allocation at the R&D program level. The process used a combination of a gross benefits industry model and the subjective assessments of individual SRDC Directors to derive estimates of the proportion of funds to be allocated to the different program areas. To assist the subjective assessments, information was compiled on potential R&D activities and the potential for each program area. This included general background on various issues as well as more specific information provided by industry and other stakeholders. Using this information as a base, a workshop was held at which SRDC Directors estimated maximum feasible levels of improvement from R&D in each program area; the probability of R&D achieving different levels of improvement; and typical adoption profiles for outputs in each program area. Consensus or average estimates of a range of variables were reached after further discussion; and these estimates enabled calculation of the present value of expected benefits for each program area. Indicative allocations of total R&D funds available to the industry were derived from the relative present value of expected benefits for each program. Adjustments were made for a qualitative assessment of the relative costs of R&D in each program area, and the relative magnitude of unquantified benefits in each program area. SRDC's final allocations to the program areas in its R&D Plan 1995-2000 were based on this process, while taking into account the expenditure on R&D by other research providers. SRDC considered that this process provided an accountable, transparent and quantitative method for allocation of resources across the broad program areas. Further enhancements to the process will be incorporated as they are developed.