The Economic Returns and Distribution of Social Benefits of Agricultural Research, Education and Extension in Iran

Economic returns to investment in agricultural research, education and extension were evaluated by relating total factor productivity and research, extension and education expenditures. The impact of research and extension induced technological change were also estimated by a rightward shift in the supply function of improved variety of wheat. The findings showed that research and education variables have positive effects on total factor productivity, while the effect of extension on agricultural productivity was not significant during the period considered. The distribution of economic gains between consumers and producers depends on the proportional shift of the supply function, rate of technology adoption, proportion of the crop marketed, and elasticity of demand and supply for the crop. Consumers and producers economic gains from advances in extension and research in the wheat production of Iran may be used as a basis for determining a national taxing schedule.