Agricultural R&D in many developing countries plays an important economic role. However, to sustain successful agricultural R&D requires adequate, reliable funding and sound management and governance. In many developing countries, generating reliable flows of R&D funds and ensuring their proper management are major challenges. This paper uses a case study in Papua New Guinea to illustrate these problems in agricultural R&D and outlines possible solutions. The main solution of fund diversification and commercial activity by the R&D provider, a practical success in the Papua New Guinea case study, could have wider applicability to other industries and other developing countries. The structural solutions provide more security of funding, lessen impacts of possible corruption and provide commercial incentives for R&D effort.