R&D is as an important source of productivity growth in New Zealand and Australian agriculture. In this paper trends in public investment in R&D and in productivity growth are reviewed. Investment in R&D has been flat in both countries until an upturn in recent years in New Zealand. Nevertheless research intensity in Australia appears to have been higher than that in New Zealand. Productivity growth is also likely to have been higher. We review recent analyses and tentatively conclude that returns to investments in domestic research in both countries are likely to have been in the order of 15 - 20%.