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One of the main agricultural policies adopted by the Iranian government is agricultural research in which sugarbeet research is an old and important one. Having developed an appropriate methodology in the framework of economic surplus approach, the paper seeks to evaluate the economic returns and welfare effects in sugarbeet research activities. The benefit-cost ratio and internal rate of returns of this public investment during the study period were estimated to be 5.3 and 33.7 percent, respectively, indicating its relative efficiency as compared to other public investments. From income distribution perspective, about 174 percent of the welfare gains go to producers (74 percent of that is paid by taxpayers), more than 100 percent of that being gained by rural beet-growers. Sensitivity analysis of the results confirmed their robustness. It is concluded that the government, which intervenes because of market failure considerations, has got a poor efficiency as compared to other governments, whether in developed or developing countries. Therefore, some institutional research and innovations are needed in Iranian agricultural research system.