GRDC focused on profit

26 Jul, 2013 02:00 AM
Comments
1
 

WA farm consultant and Toodyay grain grower Paul McKenzie has urged growers to become more aware of where levies they pay are being spent.

Mr McKenzie announced earlier this month that he had established an organisation, iCrop Australia (ICA), that was dedicated to strengthening the financial returns of Australian grain producers.

"ICA's specific areas of interest include agriculture, compulsory levies, competition policy and rural affairs," he said.

Mr McKenzie said the Grain Research and Development Corporation (GRDC) levy was one he specifically wanted to hear from growers on.

Since announcing the formation of ICA, Mr McKenzie said he had been through data from GRDC's annual reports since 1992 and believes there needs to be scrutiny of the research organisations spending and return to the grower.

Mr McKenzie has found that the organisation's revenue had increased from $37 million to $177m over the last 20 years, while expenditure has virtually followed the same trend.

Largely the increased revenue has come from grower levies.

In 1992, GRDC received $19m from grower levies, while that figure was $98m in 2012.

But Mr McKenzie wants to know what is the actual return on investment to the grower and how is it measured?

He said a cropping business can potentially run out of liquidity in a couple of years, whereas in days gone by it might have taken 10 years.

"The consequences of things not working out according to plan are a lot more savage and a lot more short term than they have been in the past," Mr McKenzie said.

"And in light of that, almost all my clients are saying they are spending anywhere between $20,000 to $60,000 a year on levies and they are asking the question of what are they getting back for it?"

Currently GRDC is funded by a compulsory levy of 0.99 per cent of the farm gate value of all grains produced in Australia.

In addition, the Federal Government contributes funding each year calculated as 30pc of the rolling three year average of industry levies.

Mr McKenzie said there needed to be scrutiny over the GRDC's spending and how its spending was benefiting the grower.

"Every other farmers' cost gets scrutinised every year and in terms of input costs, they have been cut to the bone," he said.

"Any further cuts in those in many businesses are going to have adverse effects on productivity.

"But they (farmers) don't have any choice or any say on whether they choose to spend about one per cent of gross revenue from grain on research and development (R&D) and what R&D that money goes into and what benefits, if any, come back?

"This isn't anti-GRDC because without question improvements in bottom line financial performance on every business is essential over time.

"But what farmers are questioning is the quantum that they spend and the compulsory nature of it and the very uncertain and questionable return on investment that they make."

But GRDC managing director John Harvey defended GRDC's position saying the organisation's aim was to be the best investment growers make each year and to get them the highest possible return.

Mr Harvey said over the last 20 years the organisation's revenue and expenditure had increased but believed the challenges facing grain growers had also increased.

He said R&D was always "risky" and some projects fail.

Mr Harvey said there was a lot of scrutiny about what the GRDC was investing in, but the GRDC did a lot of consultation with groups such as Grain Producers Australia (GPA).

"With the developing of our most recent five- year plan last year our focus was on the drivers of profitability for growers across Australia," Mr Harvey said.

"We have direct engagement with growers through our panels (the Western Panel is chaired by Peter Roberts) so there is obviously a strong engagement there with growers.

"Half of our panels are made up of growers and they spend a lot of time talking with other farmers about issues and getting feedback from them about technologies, varieties and farming practices as a result of GRDC-funded projects."

GRDC also ran a survey last year and found that 75pc of respondents rated GRDC's performance as fairly to very high, which was higher than its previous survey in 2010.

"There was also a substantial increase in respondents from 67pc to 76pc who believe they have directly benefited from our research, development and extension (R, D&E)," Mr Harvey said.

"The grower survey also demonstrated a strong support for the current levy on crop production."

p Mr McKenzie is currently doing a survey of his own to complete and present to the Federal Minister for Agriculture, Fisheries and Forestry and the GRDC. To complete the survey head to www.icropaustralia.com.au

Page:
1
FarmWeekly
Date: Newest first | Oldest first

READER COMMENTS

Harry
26/07/2013 2:07:55 PM, on Farm Weekly

DAFWA's wheat & barley plant-breeding R,D&E was public-owned. Now it's InterGrain owned by WA Government 48.7%, GRDC 25.3% & Monsanto 26% with the door left ajar for a greater control by Monsanto. Like selling our souls to the devil.

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 

COMMENTS

light grey arrow
I'm one of the people who want marijuana to be legalized, some city have been approved it but
light grey arrow
#blueysmegacarshowandcruise2019 10 years on Daniels Ute will be apart of another massive cause.
light grey arrow
Australia's live animal trade is nothing but a blood stained industry that suits those who