The Australian agricultural research and development (R&D) sector faces many challenges associated with the trend to increased collaborative research as promoted by the Cooperative Research Centre Program. Analysis of the results of an electronic survey of researchers involved in the sugar industry highlights economic, managerial, and sociological challenges associated with collaborative research. Researchers’ perceptions of the usefulness of a range of economic and non-economic evaluation techniques are also highlighted. It is shown that economic evaluation is appropriate for resource allocation and impact assessment purposes but is of limited value in monitoring and improving the process of collaborative research. A systems-based approach to the evaluation of collaborative R&D incorporating principles from economics, management, and sociology is promoted as an appropriate alternative that could contribute to improved efficiency and effectiveness of collaborative research activities.