Public sector support for rural research and development has a long history in Australia. The recent Industry Commission report i.mo research and development hu·gely accepted the contmuance of the present compulsory levy regime. backed by the research and development corporation structure. In this paper. a number of strategies for funding rural R&D are proposed. and in particular one involving volut1tUI)1 contlibutions from individual producers is developed. Such an approach has bath theoretical support and is practically feasible. Furthermore, it is suggested that it will specifically address some of the problems identified by the Industry Commission in the area of rural R&D.