CSIRO and the Cotton Research and Development Corporation (CRDC) commissioned the Centre for International Economics (CIE) to undertake a benefit cost analysis of the research work done by the CSIRO Cotton Research Unit which was established in 1972. This work included the Unit’s cotton breeding program, as well as its development of several management tools for cotton farmers and their advisers. These tools include SIRATAC which was used from 1984 to 1989, entomoLOGIC which was released in 1994, and more recently, CottonLOGIC. Separate analyses were undertaken for the cotton breeding programs, SIRATAC and entomoLOGIC/CottonLOGIC.

The results show that CSIRO’s cotton research has provided significant economic benefits to the Australian community. Taking CSIRO’s cotton breeding and decision support research as a whole, and assuming a 5 per cent discount rate, the research has returned a present value net benefit of over $5 billion since 1973, with a benefit:cost ratio of 51 and internal rate of return of 31 per cent.

Most of the benefit has come from the cotton breeding programs which have returned net benefits of $4.9 billion in present value, with a benefit:cost ratio of 86 and internal rate of return of 34.

The present value of net benefits from entomoLOGIC/CottonLOGIC were estimated at just over $200 million with a benefit:cost ratio of 18.5. The earlier SIRATAC had a present value of net benefits of $36 million with a benefit:cost ratio of 2.1.

The environmental consequences have not been taken into account. Much of the CSIRO cotton breeding research has been focussed on producing better adapted varieties with better resistance to pest and diseases. The research on management tools has also had a strong focus on this aspect. The result has been a significant reduction in the number of insecticide sprays and use of chemicals on established areas, providing an environmental benefit compared with what would have happened if the original varieties had continued to be used. The new varieties are also at least 11 per cent more water-use efficient. But the CSIRO research has also stimulated the expansion of both irrigated and dryland cotton, which may have meant increased use of insecticides and irrigation water depending on what alternative crops might have been grown in the absence of the research.