2 Agricultural R&D and the Contribution to Overall Productivity Growth
This section first considers the agricultural research intensity compared with Australia, and then reviews the growth performance of New Zealand’s agricultural sector over time and compared with other industries.
2.1 Agricultural R&D
The institutional arrangements for the public funding of R&D in New Zealand have evolved over the last two decades. Up until the early 1980s, the majority of research funds were allocated to the former Department of Scientific and Industrial Research and the Ministry of Agriculture through the standard process of parliamentary appropriations. After a series of changes the current system of funding emerged in which a significant part of the public sector funding for R&D is channelled through a series of state-owned research institutes. These institutes and universities submit competitive bids to the Foundation for Research, Science and Technology, which through a process of pair review allocates the public funding according to priorities established by the government based on the policy advice of the Ministry of Research, Science and Technology.[2]
Figure 1 shows the level of public spending on agricultural R&D in New Zealand compared to in Australia over the period 1975 to 2001, as a percentage of agricultural GDP. Australia has invested a higher percentage than New Zealand throughout the sample period, with a high in 1983 of 5.9%. Since then the trend has been one of declining public R&D intensity in Australia, although from 2002 to 2003 there was an increase from 2.9% to 3.8%.
New Zealand’s level of public R&D spending as a percentage of agricultural GDP has remained relatively steady over this period, at a level of 1.6% in 1975 and 1.3% in 2001.
- Figure 1: Australian and New Zealand public R&D intensities in agriculture
- Source: John Mullen (pers. comm.) and Australian Bureau of Statistics.
Notes
- [2]For further details see Jacobsen and Scobie (1999)
