Author(s)

Adam Dale¹, Elliott Currie²

¹Department of Plant Agriculture, University of Guelph, Simcoe Research Station, Simcoe, Canada.
²Department of Management, University of Guelph, Guelph, Canada.

Canadian governments have moved towards a matching funding model for agricultural research. Agricultural organizations can take advantage of this if Canadian Controlled Private Corporations are established to fund research through matching grants, tax credits and investments. A low risk options strategy is presented which uses index options and is a diagonal put spread where an in-the-money put is bought which expires in 1 to 2 years and out-of-the-money puts are sold which expire monthly. In summary, “A small Canadian Controlled Private Corporation can, for a $100,000 up front initial investment, generate at least $100,000 annually in research funding, in perpetuity”.

Tax Credits, Index Options, Research Funding, Capital Gains, Matching Funds

Dale, A. and Currie, E. (2015) An Alternative Funding Model for Agribusiness Research in Canada. Agricultural Sciences, 6, 961-969. doi: 10.4236/as.2015.69093.