Wine Australia: Ex post cost benefit analysis of selected R&D projects supported by Wine Australia/GWRDC/AGWA investment
Abstract
To evaluate the value of Wine Australia’s R&D investments, IDA Economics Pty Ltd was commissioned to undertake an ex-post benefit-cost analysis of four selected project areas - flavour, winery refrigeration, trunk disease and vine nutrition - comprising 17 projects.
Overall, the estimated benefits and costs of the projects show that the returns on the grower, Commonwealth Government and co-investor monies have been significant. Investments in the four areas yielded positive results at a 5% discount rate, with benefit cost ratios ranging from 1.6 - 10
The aggregated Benefit-Cost Ratio on the selected projects was 9.3 to 1.
Summary
Economic analyses of four programs of selected research and development (R&D) investments funded by Wine Australia were undertaken by IDA Economics. The main purpose of undertaking the analyses was to demonstrate the outcomes and benefits that have emerged or are likely to emerge from investments made in the programs. This forms part of the process for the Council of Rural Research & Development Corporations (CRRDC) that aims to demonstrate the impact, effectiveness and return on investment from the Rural Research and Development Corporations.
The areas of analysis were flavour, winery refrigeration, trunk disease and vine nutrition, through the following 17 projects:
|
Flavour |
|
|
CSP 05/04 |
Vines to wine – linking fruit quality to wine flavour and aroma (CSIRO Flagship) |
|
CSP 0905 |
Understanding and managing the timing of berry ripening and the flavour-ripe /sugar-ripe nexus |
|
AWR 06-01 stream 1.1 |
Defining and controlling important volatile compounds in wine and their impact on wine aroma and flavour |
|
UWA 04/01 |
Environment, site and selected management influences on the composition and sensory characteristics of Chardonnay growing in selected sites within a coastal, cool Mediterranean climatic region |
|
CRV 6AWR |
Viticultural control of flavour compounds in wine |
|
|
|
|
Refrigeration |
|
|
AWR 0902 |
Improving winery refrigeration efficiency |
|
AWR 1306 |
4.3.1 Node project at Griffith |
|
|
|
|
Trunk disease |
|
|
CRV 99/12 |
Managing grapevine trunk disease (black goo decline, esca, eutypa dieback and others) that threaten the sustainability of Australian viticulture (CRV 2.2.1). Continued as CRV 99/12N |
|
CRV 99/12N |
Managing grapevine trunk disease (petri disease, esca, eutypa dieback and others) that threaten the sustainability of Australian viticulture (CRV2.2.1). |
|
CRV 03/06S |
Diagnosis and management of eutypa dieback (CRV 2.2.4) |
|
SAR 06/01 |
Sustaining grapevines infected with eutypa dieback |
|
GWR IN0905 |
Eutypa dieback management |
|
SAR 1001 |
Optimising management of eutypa dieback |
|
|
|
|
Vine nutrition |
|
|
CRV 99/19b |
Grapevine nutrition: Research to Practice (CRV 4.4.3) |
|
GWR IN1108 |
Post-harvest care of vines: irrigation and nutrition |
|
NWG 0601 |
Winegrowing Futures – Theme 3 – Multi-seasonal impacts on vine productivity and grape composition |
|
NWG 0601 |
Winegrowing Futures – Theme 4 – Optimising resource use and protecting the environment Exp 4.5 – Grapevine nutrient reserves and their impact in grape yield variability and yield estimation |
Each of the analyses provides a description of the constituent projects including objectives, outputs, activities, costs, outcomes, and benefits. While a range of potential benefits of each program is identified, the analysis focused on the most likely and most significant benefit stream. A number of potential benefits therefore remained unquantified and hence the estimated net benefits of some programs may be considered conservative. The analyses were undertaken for total benefits and Wine Australia benefits, including those expected in the future as a result of the investment. Where applicable, earlier benefit cost analyses carried out by the former CRC for Viticulture and EconSearch were also considered.
The analytical approach covered:
- R&D investment
- Implementation costs
- Net benefits to growers
- Adoption
- Industry level benefits
Investments in the four areas - flavour, winery refrigeration, trunk disease and vine nutrition - all yielded positive results at a 5% discount rate, with benefit cost ratios ranging from 1.6 to 10.
Comparisons between the cluster results should be made with caution due to uncertainties involved with assumptions and differing frameworks for each of the analyses.