The fruits and vegetables subsector shows great dynamism despite lack of government support compared to other subsectors within agriculture. To further realize the potential of the fruits and vegetables sector, one promising instrument is investment in research and development (R&D). The government is the primary source of funding for agricultural R&D efforts due to the "public good" character of such kind of research. However, the Philippines lags behind its neighbors in Asia in terms of agricultural research investment. Moreover, current R&D investments are skewed toward traditional commodities. This paper assesses the prospective impact at the industry level of fruits and vegetables R&D using the ACIAR-PCAARRD horticulture project as case study. An economic surplus model running on a spreadsheet is used to evaluate measures of project worth for R&D investment. Application of the model shows the high social returns from raising investments in horticulture R&D.
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