This paper analyzes the returns to investments in the generation, transfer, and adoption of rice technology in Uruguay during 1965- 1985. These investments had a high payoff with an average rate of return of 52%. The use of an economic surplus model relies heavily on the estimate of the supply shift due to technical change. Given the assumptions utilized in developing and testing this model, the results are an approximation and are not definite. It is difficult to quantify the impact of technical change independent of other factors; some of the benefits are indirect and difficult to measure. Also, some of the costs attributed to the generation, transfer, and adoption of technologies are not exclusively those of activities related to the production of rice. This study quantifies the impact of a technological package based on improved seed and agronomic practices. By including two commonly omitted variables, such as public extension and private R&D, a more complete measure of the impact of technical change is obtained. More information on management and input costs would improve the analysis. The benefits generated by technical change were accrued by producers. Therefore, private support of research is justified. Moreover, the interaction between public and private R&D in the case of rice in Uruguay is a good example of complementarity and its potential impact. The study highlights the importance of having the capability to monitor events outside a country in order to introduce and adapt external knowledge in the form of genetic materials and agronomic practices. Uruguay clearly benefitted from these technological spillovers; this could not have happened without the appropriate local research capacity. The understanding of the links between this capacity and technology diffusion is a topic that deserves further analysis. (Author abstract)
