Rural R&D

Stakeholders in rural industry research have until November this year to comment on a draft report of the report of the Productivity Commission (“PC”) into the future structure and funding of rural R&D corporations (“RDCs”), such as Dairy Australia, Meat & Livestock Australia, Horticulture Australia and Australian Wool Innovation – to name a few.
The economic think tank hasn’t questioned whether rural R&D is a good thing; it simply thinks it can be done more efficiently and by using a smaller proportion of taxpayer funds. The PC report also doesn’t propose swift change but says the shape and balance of funding should shift over time towards a greater commitment by the beneficiaries of the research – farmers themselves.
The biggest issue in the report is the extent to which taxpayers foot the bill for rural R&D. The Federal Government presently matches farmer or producer levy funds up to a maximum of 0.5 per cent of each industry's gross value of production, which the commission said this should be held for the next 5 years but then halved over the following 5 years.
But there are some significant structural proposals as well, with the commission suggesting some savings and better focus could be delivered through the creation of yet another R&D body - a new government-funded corporation to be called Rural Research Australia (RRA). RRA would manage and fund broader rural research that wouldn't otherwise be provided by the industry-specific RDCs, and presumably in a better way than project-level work that is done by industries on such issues. The PC wants to divert almost a quarter of the current level of government funding into RRA.
The “real” brief to the PC when they started work was to achieve savings for the federal budget, and to provide a recipe for better governance of the spending of farmer and public funding. The proposals will slash monies available to existing RDCs over years 6 to 10 of the PC’s plan by more than 30% (based on 2009 numbers) if the cuts and RRA proposals are adopted.
But the ultimate outcome of this review will come down to a balance of political judgement. The work was formally called in February 2010 by former Agriculture Minister Tony Burke in a very different climate. That was prior to the Rudd Government losing its lead in support of the populous and “running off track”, and also before the profile of regional issues got elevated through the election result. Both major parties are doing their level best to manage the impact of the regional agenda on their approach to this term of parliament, and so far little has been said about rural R&D in that context.
How do these proposals position rural industries in the long term? The biggest issue not covered in the PC report is the long-term positioning of Australian industries in the world markets for agri-products, nor addressing the immense challenges that are bearing down on several sectors due to changes in the world economic disorder, food insecurity and climatic outlook. There will be plenty to be said in the coming months by each affected industry sector to defend the important role of R&D in their worlds, but some long-term perspective on Australia’s interests need to colour and balance this dry economic debate.