Why We Should Invest in Agricultural R and D - in Australia

This is the full text of a recent speech on investing in Australian R and D.

Interestingly, no specific mention of tropical agriculture, yet this will the climate region where big gains must occur, given likely water and climate constraints in temperate Australia.


[partially sourced from Qld country Life online edition]
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The case for investing in agricultural research and development

NATIONAL Farmers' Federation chief executive officer Ben Fargher has challenged the government to expand its probe into rural R&D. Here is his address to the Australian Institute of Agricultural Science and Technology national conference.

At face value, investing in R&D is a no-brainer, or should be.

You would expect the National Farmers’ Federation (NFF) to support the Rural Research Development Cooperation system, and we do.

We’re sick of it being reviewed and governments - state and federal - need to stop the cuts and spend more money on agricultural R&D. Simple as that!

Or is it?

The rationale for this position? I dare say you would well expect me to outline today the recent rural RDC evaluation report showing the outstanding return on investment – an $11 return on every research dollar spent.


I could cite a list of examples of new tools that farmers have taken up on the back of R&D, and rattle off the average 2.8% per year productivity growth farmers have achieved over the past 30 years.

I could also tie this in with projections for Australia having 36 million people by 2050 – with world population growth tipped at 9 billion… not to mention a growing global food crisis that has many of our trading partners in, well, crisis mode.

I think these things are important but I suspect you already know about them.

The problem is many people in the broader community don’t.

And when we are trying to get governments to put policy and funding in place against a list of other priorities it’s the community’s view that matters not necessarily ours!

So today I want to probe deeper into this issue and try to make sense of the whole research system.
These are important and complex questions that we, as agricultural industries, need to think about much more than we have in the past. That goes for NFF as well.

Before being able to make a case for investing in agricultural R&D I think we, as people involved in the farm sector, need to look at this issue in the context of a vision for the future of Australian agriculture and the individual commodities within it - and then look at where R&D is required in relation to that vision.

R&D for R&Ds sake is hard to explain, even harder to sell and what’s the point anyway.

As a colleague Dennis Hussey would remind me, R&D is a means to an end not an end in itself!
A whole-of-industry and government strategy is required to address this vision for Australian agriculture.

NFF has been talking about the need for an overarching strategic vision for some time. The Corish Report “Creating our Future” in 2006 laid a foundation for it, we have attempted to paint a picture in our own NFF Strategic Plan and other groups, such as the Australian Food and Grocery Council, have been talking a lot recently about the need for a food industry policy in Australia.

So are we all clear on our vision and is it a collective one?

I must say that it’s not only the Government’s responsibility to provide this vision; it’s ours to create and articulate. But let’s not let the government off the hook either.

In an election year it is an opportunity to ask all sides of politics… what is their vision for our agricultural industries and communities? Have they even thought about it?

We need a clear vision, with clearly defined responsibility for research endeavours because we have serious challenges to face.All too often when we are under immense pressure, be it personally, in business or industry wide, we look inward for survival.

Well, we have been under pressure. It is testament to our farmers’ resilience given the pressure they have been under during this prolonged drought.

But we need to look outwards.

We need to look outwards at and consider the consequences of the petering out of the benefits of the “green revolution” in the 1960s and 70s and the declining trend in productivity growth in many parts of our agricultural industries.

We often cite the fact that Australian farms have consistently achieved average productivity growth of 2.8%-a-year for 30 years, but as John Kerin reminded us in an articulate speech at the Outlook conference last week, ABARE has revised downwards its estimate of long term productivity growth since 1953 to about 2% per year.

This decline in productivity growth has come at a time when Australia is seeing declines in rural R&D funding, as well as a redirection of funding away from productivity-related research.

Government will argue that R&D funding on the whole has gone up, but if we consider research intensity, or spending as a proportion of our output; it has fallen by over one-third since the mid-1980s.

The loss of Land and Water Australia (LWA) and reduced funding to the Rural Industries Research and Development Corporation (RIRDC) from the 2008-09 budget were felt by the agricultural industries, and the impact of this decision will remain with the industries for years to come. While domestic funding is being cut, international agricultural R&D contribution is being massively boosted.
The international rationale is sound.

The United Nations has issued a call-to-arms for agricultural production to increase 70% by 2050 to meet world population needs in the face of global food security. But Australia is a key part of the solution. We need to invest more here and have our farmers adapt and nuance the technology – then it can be exported and adapted to contribute to the development challenge.

While domestic funding declines, the calls on the research dollar continue to grow.

For example, the National Climate Change Adaptation Research Plan for the Primary Industries, which is currently under development, sets out an ambitious agenda additional to the research currently underway, with the assumption that it will be funded from existing sources!!

Government has also been calling on the private sector to step up to the mark and increase its contribution to rural R&D, and fill the gap left by decreased funding of extension services and declining public spending.

It’s an easy fob-off for the government. If industry won’t invest in its own future, why should the government?

But it ignores some key issues. The reality is that Australian agriculture represents a relatively small market for international agribusiness, and challenges such as regulatory hurdles and differences in state legislation increase uncertainty for these large investors.

Industry structural change, income variability as a consequence of drought and the free-rider challenge diversification of farm industries present a challenge for local companies to invest in R&D.

It is important to note that these challenges and uncertainties not only affect farmers, but they have an impact on the research community who work in partnership with the Australian agricultural industries.

The uncertainty makes it difficult for the researchers who have built a career working with Australian farmers, and a disincentive for graduates searching for a place to start their career. Again, John Kerin talked about this issue last week. Fifty per cent of our agricultural scientists and academics will retire over the next five years.

We need more than double the crop of agricultural graduates to meet those needs. That means around 2,000 graduates per year; we are currently producing 800 and that number is falling.

Finally, rural R&D is a long-term issue.

Indeed, it is good to keep timeframes like 2050 in mind when we discuss it. Evidence and experience with minimum till practices show that it takes 30 to 40 years to bring embryonic research ideas to a point where 95% of the country has put research into practice.

Let’s then assume we have a clear vision and understand well these challenges. What is the way forward?

At the NFF, we believe that a National Rural R&D Strategy needs to address:
• The complexity of the system;
• The various roles of Government;
• The innovation chain;
• Government funding;
• Industry links and the role of the rural RDCs;
• The role of the private sector and international partnerships in R&D; and
• The resources and human capital required to achieve our aims.

First, we need to recognize that the Rural R&D System is a complex one – it includes farmers; the Federal Department of Agriculture, Fisheries and Forestry; State Departments of Primary Industries; the Department of Innovation, Industry, Science and Research; CSIRO; the Cooperative Research Centers; the Universities; the National Climate Change Research Facility; Agribusiness (from small to multi-national firms); and the Rural Research and Development Corporations – of which there are 15.
The delivery of innovation is complex, and is not the responsibility of a single agency. The various organisations need to work together and coordinate their activities and resources for the whole system to work, let alone be effective or efficient.

This includes those responsible for prioritising and setting policy on rural R&D investment; those responsible for undertaking R&D; as well as groups and organisations that disseminate and use the outputs of the research.

Put simply Governments and other agencies need to get their house in order.

What are the roles of CSIRO, CRCs, RDCs, Universities and ACIAR? Where do they overlap and how can we get everyone working together?

We are optimistic that the Rural R&D Council and their role in the development of a National Investment Plan will bring some real clarity to this very convoluted area.

A National Rural R&D Strategy is needed to demystify the labyrinth of research bodies, their funding streams and ensure we – farmers, taxpayers and industry – are getting bang for bucks.

We need clarity over how these issues are to be addressed and, rather than take the ‘traditional piece-meal approach’, a truly national effort is required that clearly recognises all the contributors and ensures that they each pull their weight.

This strategy needs to address the whole R&D ‘innovation chain’, from strategic basic research, applied research, experimental development to commercialisation.

All of these elements are important and need to be jointly considered if innovations at the lab bench are to be meaningful in the farm paddock.

The Rural Research and Development Corporations need to be maintained, and recognised for the valuable role they play within the broader rural R&D system, particularly in applied research and experimental development.

The number one strength of Australia’s rural R&D system is the partnership it has built between industry and researchers, and the benefits this has brought giving scientists feedback on farmer needs. This has delivered advantages to Australian agriculture through the development of practical technologies for farmers and needs to be maintained.

I must say that backing the system does not mean we are not willing to look to improve it.

In fact, at the NFF we see the Productivity Commission (PC) review as an opportunity, not a threat.
We will put a strong case to the PC and Government and engage constructively and frankly about what works well, what doesn’t and where the system needs to be improved.

Hand-in-hand with an improvement in government coordination and program delivery is the need for a National Agribusiness Strategy to address the opportunities, barriers and incentives to promote private investment by agribusiness in Australian rural R&D.

The government needs to consult with domestic and international agribusiness to understand the prospects and obstacles to private investment in rural R&D (including incentives and regulation – for example, chemical regulation, intellectual property and GMO regulation), and policies that encourage greater private participation in rural R&D.

Engagement with agribusiness can smooth the path to Australian farmers having access to innovations developed internationally, it can ensure there is a level playing field to allow agribusiness to service the needs of Australian farmers.

It should also encourage Australian agribusiness to grow, expand and maximise the investment in rural R&D.

This strategy must attract global agribusiness to develop operations and R&D partnerships here in Australia. It must be part of our national approach to ensure Australia maintains its role as an international leader in agricultural adaptation to climate change and productivity research.

Indeed, the vision should be to establish Australia as the international hub for agricultural research.

This will have benefits including leveraging funding, spill-over benefits for life-science industries, access to world-class expertise, improved profile for agricultural careers (including improved wage prospects for science graduates), and international leadership.

Australian agriculture can benefit from access to international research in a number of ways, including access to germplasm and animal genetics through private companies, as well as through the various Consultative Group on International Agricultural Research (CGIAR) research centres.

Significant research efforts are now being funded in sub-tropical regions by various international governments and philanthropic groups, such as the Bill and Melinda Gates Foundation, which could complement work being done by Australian agricultural industries.

Australia must seize and capitalize on the advantages it has in the development of sustainable agriculture and low carbon emission agricultural systems to attract the world’s ‘best minds’ to work on these issues. Benefits would flow to Australian agriculture and internationally to agriculture in developed and developing nations.

A real vision for Australian agriculture must consider and make the most of the human capital required to undertake R&D and deliver innovations for our farm sector.

Agriculture is an information intensive industry, and the role of agribusiness and international R&D programs in providing career paths, as well as access to talented scientist who can assist Australian farmers to meet the productivity challenges must be recognised. At the very least, we need to maintain our resourcing in order to retain our current crop of scientists and to attract new talent from overseas. We cannot afford to lose the IP that currently exists in this country.

For all the reasons I alluded to earlier – sound investment returns, population explosions here and overseas, a world food crisis that is ever-deepening and Australian farmers’ track record in productivity and innovation success – we should be positioning Australia as a leader to meet these challenges.

So in summary:

Australia and its agricultural research arms need a shared vision for food and fibre production.

Australia must have a national strategy for R&D investment to underpin this vision.

Through R&D, Australia can and should establish itself as world leader in efficient agricultural production and climate change adaptation.

Australia should strive to be the ‘silicon valley’ of low carbon food production, low input food production.

We need to attract the world’s ‘best minds’ to work on these issues and develop world-class teams here.

Governments do, indeed, need to invest more money in productivity-based agricultural R&D. And it needs to be brought into line with R&D in natural resource management.

We need to push through media and political apathy to explain our vision. The challenge is framing these issues and goals in terms digestible by the community… that is, language they understand, not the acronyms and jargon we like to use.

This is the challenge the NFF has set itself.

Online Comments [ as at 15 March 2010]

Not a bad speech, at bit unrealistic at times but overall ok
Posted by Bill, 13/03/2010 6:42:48 AM, on Stock Journal

I agree with the sentiments expressed by Ben but would add that not one more cent be wasted on GMO research. For all the money wasted on GMO development in Australia, what have they got to show? A toxic pea!
Posted by ggwagga, 15/03/2010 6:35:24 AM, on Stock Journal

An implicit part of this issue is that farmers have to drop their common attitudes - "pay me more", "poor me", and "I subsidise city people" and "people in Sydney don't know what it's like out here in the real world". Ben's references to R&D would have more force if farmers had adopted technology more readily and not played their attitude cards so readily. For example, why spend money on new R&D when farmers have failed to change their operations to take advantage of innovations that were available 20 years ago? There's a stockpile of technology that's rotting in the databases unused.
Posted by Long Xuyen, 15/03/2010 10:08:00 AM, on Stock Journal