Equilibrium Displacement Models (EDMs) are useful for estimating the net benefits of agricultural R&D and the distribution of benefits between producers and other participants in the value chain. Information from these models can assist investment decisions of R&D funders. In Australia, EDMs have been developed for various livestock industries and the wine industry. An EDM is needed for the Australian grains industry. In this paper, the Equilibrium Displacement Modelling method is reviewed in the context of constructing an EDM of the Australian grains industry. Key principles and challenges are identified. As a first step a pilot EDM for the WA grains industry is constructed and presented; a prelude to building an Australia-wide grains industry EDM.