This study constructs a multi-households CGE model of Korea in order to analyze the welfare impacts of agricultural R&D expenditure. We quantify the impacts of agricultural knowledge stock on farm output prices estimating agricultural price equations. The general equilibrium impacts of a reduction in knowledge stock are simulated under different assumptions on decay rates. It is shown that the overall welfare impact of R&D expenditure is much greater than the expenditure itself. Moreover, agricultural R&D expenditure is progressive in that its welfare impacts are larger for lower income classes. However, it is also shown that the expenditure is pro-consumers not pro-producers because farm household’s asset values decline due to the decreased farm output prices.