102 Agricultural Research and Produciivhy 



Table 6.6: Eslimaied Marginal Coniribulion of Research Invesimenl 

 in Indian Agriculture 



Estimated income stream generated by investment oj Rs. 1.000 (I96S) 



Notes: 



a. This can be divided into a direct contribution (10,500 in regression 2; 6,460 in 

 regression 3) and a "borrowing"' contribution (340 in regression 2; 140 in regres- 

 sion 3). 



b. This is the part of the contribution that interacts with extension. 



c. Calculated from the coefficient in regression 3, table 6.5, which implies an in- 

 come stream of Rs. 27,600 associated with a one-unit change in the extension 

 variable. In a typical slate, if one district were to have introduced its research 

 program one year earlier, the index would have increased by 1.25. It is estimated 

 that the cost of doing so was roughly Rs. 200,000. 



The amount of 7,960 rupees is the sum of own research con- 

 tribution and of the contribution of its interaction with extension 

 (table 6.6). If extension activity were zero, the income stream 

 from research investment would be reduced to 6,660 rupees. The 

 marginal income stream generated by a 1,000-rupee investment 

 in extension is not 1,300 rupees; it is 175 rupees, computed as the 

 marginal product of increasing extension spending (table 6.6), and 

 probably is realized with very little lag. It might legitimately be 

 regarded as a 17.5 percent rate of return, quite modest compared 

 to the return on research investment. 



When one state invests in research, other states in the region 

 will benefit. By these estimates a 1 ,000-rupee increase in research 

 investment in the region generates an income stream in the 

 average state in the region of 800 rupees (for regression 3). This 

 indicates that institutions such as the Indian Agricultural 

 Research Institute in New Delhi, which are not directly associ- 

 ated with a state and contribute solely through the regional effect, 

 are probably contributing a little less than the state programs. 

 (The average state research program contributes an 800-rupee in- 

 come stream to four other states.) 



