R&D the catalyst for growth

27 Apr, 2005 08:45 PM

THE Australian grains industry has been averaging productivity gains of 3.2 per cent in the past 20 years, but about half of it has come from economies of scale, such as larger land holdings and bigger and better machinery.

This begs the questions how much more land is required to keep a cropping operation sustainable, and how much more can be gained from new equipment.

An alternative is to extract more from research and development.

While grain researchers have been making good contributions to on-farm productivity in comparison to dairy, beef and wool in the past 20 years, are they good enough to help grain growers deal with the continuing price squeeze?

Agriculture Department acting executive director Rob Delane said the trend in prices received over prices paid was not getting better, and there didn't seem to be any immediate prospect of the trend changing.

He said there could be serious regional implications if farmers could gain increased productivity and efficiency through economies of scale.

"The grains industry is under acute pressure this year due to market pressures, exchange rate levels and cost increases," he said.

"If we are to share in grain sector wealth in WA, we have to generate more of it, and faster than we are now.

"Bankwest, Planfarm, and other farm business benchmarking analyses show if you are in the Bankwest top 25pc you will be able to cope with that pressure better than if your business is performing at average or below-average levels."

Mr Delane said researchers in the Australian grains industry could pat themselves as they contributed significantly to wheat yield increases, which were higher than in the US, Canada and EU.

"While our researchers are doing a good job, the question is whether the research and development sector is doing well enough," he said.

Mr Delane said a report by ABARE, using the three Australian production zones defined by GRDC, indicated productivity growth in WA had been at 3.5pc in the past 21 years, compared to 3.2pc in south eastern Australia and 3.0pc for the northern region.

He said those figures represented a great achievement locally, but asked was it good enough.

Mr Delane said other research by the GRDC had found grain-growing productivity was at 3.2pc, of which 1.7pc came from research and development.

He said 0.7pc came from improved varieties, while 1pc came from other R&D generated technology and management improvements, other than new varieties.

"The question is, if that cost price squeeze continues unabated, is a 1.7pc contribution from new technology enough," he said.

"My argument is that R&D has to deliver more than 1.7pc."

Mr Delane said the newly established Agricultural Research Institute, involving the Agriculture Department and Curtin and Murdoch Universities and the University of Western Australia, aimed to help growers increase productivity.

"We must utilise such collaborative initiatives," he said.

"We must improve on them and identify other ways of developing and transferring the best technology and management methods onto as many grain farms, and other parts of the supply chain, as early as possible.

"It is what our increasing national collaboration in areas such as barley, oat and pulse breeding, and molecular plant breeding technology is about.

"It is also what the Crop Updates are about, getting the latest results to agribusiness and producers as early as possible."



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