Measuring and Analysing the Rate of Return of Agricultural Expenditures on R&D in Iran

In economics the rate of return on agricultural R&D is one of the important factors for investment decisions in agricultural sector. The R&D expenditure is the core variable for the productivity factor. In this study, at first the impact of agricultural research and human capital was estimated on productivity by Almon lag model and in the next step the rate of return for agricultural R&D was calculated. The result showed that the R&D in agricultural sector affects the productivity after 4 years and this effect will last for 3 years.The long term coefficient of agricultural R&D is 0.17 and the internal rate of return (IRR) was calculated up to 36 % in productivity models of Iran during the period of 1979- 2008 (1358-1387). Therefore, it is suggested that the agricultural R&D expenditures should be increased to 2 % of agricultural GNP.