It concluded financial benefits from the nine-year-old the programme have already exceeded the $272 million the Government invested to June 30.
The review by consultant Deborah Battell said forecast economic benefits of $6.4 billion to $11.1b from PGPs by 2025 by the Institute of Economic Research are likely to be achieved.
And even better results could have been delivered but for several factors, including a decline in applications.
Agriculture Minister Damien O’Connor was critical of the programme while in opposition, in 2014 calling it “an unaccountable slush fund for the National Party’s industry mates”.
Battell’s review, that he commissioned, said the programme is worthwhile.
“Taking into account the financial and non-financial benefits already achieved the likelihood of substantial future benefits and the firm and wider industry transformations taking place, the PGP has been, will be and can continue to be a worthwhile public investment.”
O’Connor said demand, especially from larger applicants, has tailed off, there had been consistent under-spending and it suffered from a lack of long-term strategy.
Last week he announced the PGP and Sustainable Farming Fund will be wrapped in to a new $40m-a-year programme, the Sustainable Food and Fibre Futures Fund, to provide money for projects delivering economic, environmental and social benefits.
The PGP programme was launched in 2009 by the National government to boost productivity, value and profitability in the primary sector, deliver economic growth and encourage private sector investment in research and development.
Its architect and now opposition agriculture spokesman Nathan Guy said the report vindicates the programme and the government investment.
Guy said O’Connor, having previously bagged the scheme, had to acknowledge it is a valuable initiative for the primary sector.
“Despite previously labelling it a slush fund for National’s mates Mr O’Connor has finally discovered the value of the PGP after spending $100,000 to have it reviewed.
“He was hoping the review he kicked off last summer would give him his much-wanted justification to destroy it but, instead, the review revealed how essential it is.”
Battell said PGPs are ideal for effecting long-term transformation or step change and supporting future investment in innovation, collaboration, capability building and culture change.
“In my view the PGP’s heyday is not over. In fact it hasn’t been reached.”
Given the challenges facing the primary sector, incentives are needed to innovate and invest instead of going for easy options.
But the money allocated since 2009 was under-spent by a third, equivalent to $145m over the last nine years.
Battell said the scheme lacked a clear and agreed long-term strategy to optimise its value and demand for large-scale projects has declined since 2013.
There are nine small programmes in the pipeline. Four of them have progressed to the contracting stage.
Battell said Transforming the Dairy Value Chain, FarmIQ and the Red Meat Profit partnership have delivered the greatest benefits but all 22 programmes have encouraged new investment, created jobs, increased exports, generated high-value products and boosted farm incomes.
Of the 22 programmes, 15 are still in progress but none is expected to start delivering economic benefits of any scale until 2020.
The report gave some examples of economic benefits to flow from programmes.
The Steep Land Harvested project was designed to find new log harvesting techniques on steep land. It cost the Government $3.7m but had returned $152m since 2010.
The logging industry had invested $80m in mechanisation and annual benefits of $129m a year are expected from lower costs and greater productivity.
Transforming the Dairy Value Chain cost the Government $76.7m but will return $2.7b by 2025.
It prompted Fonterra to invest $310m in new manufacturing, add 100 new jobs at Clandeboye and has generated returns of $60m a year from improved breeding and increased exports.
FarmIQ, a farm management software programme, cost the government $59.3m but resulted in livestock premium payments of $3.5m a year to farmers with future benefits of $1.2b by 2025.
