impact assessment report series - Grains Research & Development ...

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The cash flow of benefits is shown in Figure 1 for both the total investment and for the GRDC investment in the cluster. The peak in the cash flow reflects the assumptions relating to the benefits assumed for the “Without GRDC investment” scenario rather than any decline assumed for the benefits with the project. The short period of negative benefits occurs as a result of the post-project investment and the lag from the end of the projects until benefits begin. Figure 1: Annual Benefit Cash Flow The contributions from the three sources of benefit as determined by the project groupings are presented in Table 17. Table 17: Contribution of Source of Benefits to Present Value of Benefits Project Group % Contribution to Present Value of Benefits Inoculants (nutrient increasing) 69 Disease Control (including by inoculants) 15 Nutrient Balance 16 Total 100 The quantified benefits are allocated to the Rural Research Priorities as expressed in Table 18. _________________________________________________________________ Agtrans Research Page 31
Table 18: Allocation of Quantified Benefits to Rural Research Priorities Rural Research Priority Allocation (%) 1. Productivity and Adding Value 95 3. Natural Resource Management 5 Total 100 7.7 Sensitivity Analyses Sensitivity analyses were carried out to show the importance of assumptions about which there is the most uncertainty. Results are reported in Tables 17. All sensitivity analyses were performed using a 5% discount rate with benefits taken over the life of the investment plus 30 years from the year of last investment. All other parameters were held at their base values. The target area for the yield increasing inoculants in particular was the most speculative assumption. The target area assumed of one million ha is only of the order of five percent of the Australian area of crops. Experience might show that a much larger area was suitable. A larger target area would also be associated with a larger benefit/ha and a more rapid rate of adoption. Therefore the HIGH benefit scenario assumed a trebling of the benefits assumed for the BASE case. The assumption of trebling benefits is equivalent to a doubling of the area and an increase in benefits/ha of 50 percent. For the LOW case, benefits were assumed to be halved and lagged five years from the BASE case level. Lower benefits/ha would result in slower adoption. Table 19 shows the investment criteria when the assumption regarding the levels and timing of benefits are varied. Criterion Present value of benefits (m$) Present value of costs (m$) Net present value (m$) Benefit cost ratio Internal Rate of Return (%) Table19: Sensitivity to Changes in Levels of Benefits (GRDC investment, 5% discount rate, 30 years) Level of Benefits LOW BASE HIGH 13.69 42.44 131.51 10.48 10.48 10.48 3.21 31.96 121.03 1.31 4.05 12.55 6.1 12.4 20.3 These sensitivity results show for plausible assumptions of benefits that because there is a considerable degree of uncertainty about some of the key assumptions, a wide range of rates of return are possible. If the benefits are trebled then the benefit _________________________________________________________________ Agtrans Research Page 32
Page 1 and 2: GRDC Impact assessment RepoRt seRIe
Page 3 and 4: Impact Assessment: An Economic Anal
Page 5 and 6: the potential market intelligence i
Page 7 and 8: Table 1: Themes of the Soil Biology
Page 9 and 10: Table 3 lists the objective for eac
Page 11 and 12: Table 5: Total Investment by GRDC a
Page 13 and 14: CSO00032 Field and glasshouse trial
Page 15 and 16: Theme 2 Root Diseases DAS00027 Pote
Page 17 and 18: Environmental Benefits In addition
Page 19 and 20: Distribution of Benefits Along the
Page 21 and 22: Capabilities sought included: • c
Page 23 and 24: The benefits from the investment in
Page 25 and 26: Philom Bios inoculants such as Jump
Page 27 and 28: UFO0002 project targeting rhizocton
Page 29 and 30: percent, or of the order of $40-50/
Page 31: 7.6 Results All past costs and bene
Page 35 and 36: consequence, there will be reduced
Page 37: Cross J. (1999). "Partner Or Perish

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