Evaluating MCV, 2009-16 and into the future

Current investment in the Managing Climate Variability program (MCV) is entering its final year of funding.

Independent evaluators updated a 2013 economic evaluation of the impacts of the MCV program, doing a benefit–cost analysis for years ending 30 June 2009 to 2016.

Compared to previous investment, there was more concentrated in climate science to target improved skill in regions and seasons because farmers had identified these areas as priorities.

The total investment of $24.1 million in present value was estimated to produce total gross benefits of $160.3 million in present value, providing a net present value of $136.2 million. The benefit–cost ratio was 6.64 to 1 and the internal rate of return was 48.2%.

Of the benefits identified in the evaluation, the principal benefit was a general increase in farm profits.

You can read the summary or full report on the project page.

The same evaluators also examined the potential returns of investing 5 more years of research and development in MCV.

Previous evaluations have demonstrated attractive returns – and despite the conservative assumptions made regarding future use of improved climate forecasts, the investment criteria estimated gave favourable results.

The total investment of $13.5 million in present value was estimated to produce total benefits of $105.5 million in present value, providing a net present value of $92.0 million. The rate of return was also high, including a benefit–cost ratio of 7.8 to 1 (over 30 years, using a 5% discount rate) and an internal rate of return of 46%.

You can read the summary or full report on the project page.

This entry was posted in News.

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