Self-sufficiency in agricultural product is one of the most important precedence in this sector and macroeconomic policy and emphases in development Plans. R&D is as suitable strategy for increasing Production and supply of agricultural product and is as remedy for Supply and Demand Gap. In this study, by using Mathematical programming optimization model for years of 1967-2007 optimal R&D expenditure in order to resolving agricultural Supply and demand gap are estimated. Result show that, in this period, in average, 32.9 percent increasing in agricultural R&D expenditure could increase 8.3 percent in agricultural Supply and agricultural Supply and demand gap ratio decreased from 1.14 to 1.08. That is, in average, 6 percent of 14 percent of agricultural Supply and demand gap can resolve by optimal R&D expenditure. So, it is purposed that according to effectiveness of current R&D on Agricultural TFP and Agricultural Demand and Supply, optimal R&D budget should be determined for achievement to optimal demand and supply gap with maximum return in Iran's annual budget law.