GRDC responds to grower levy concerns

16 Nov, 2012 01:00 AM

GRAINS Research and Development Corporation (GRDC) communication manager, Kylie Dunstan, recently spoke to Farm Weekly grains writer BOBBIE HINKLEY after a number of WA wheat growers expressed their concerns about the 0.99 per cent Federal Research Levy.

Some growers told Farm Weekly that while an extensive amount of publicity had recently been given to the 22 cent a tonne Wheat Export Australia (WEA) grower levy and the two per cent wool tax, by far the biggest levy expense on a large number of WA farm businesses was the 0.99pc Federal Research Levy compulsorily acquired on a grower's gross grain income.

Seven grain and seed commodities currently have a levy and or export charge in Australia. These included coarse grains, cotton, grain legumes, oilseeds, pasture seeds, rice and wheat.

According to the Department of Agriculture, Fisheries and Forestry the charges provide funding for research and development, plant health, residue testing and WEA programs for the grains industry.

Bobbie Hinkley (BH): The GRDC is currently contributing to 900 research projects and employing 2500 people. Some growers would argue that those figures are extreme. Is GRDC's grower levy-funded spending being spread too thinly to be able to achieve any industry-changing or tangible kind of benefit for our State's grain growers?

Kylie Dunstan (KD): GRDC receives a 0.99 per cent levy from grain growers. GRDC reports comprehensively to all stakeholders in relation to how these funds are invested to maximise returns to Australian grain growers and the broader community.

Individual growers can make an assessment of the organisation's performance and the return they get on their investment.

Recently 1200 grain growers throughout Australian were surveyed and the attitude towards paying the levy is highlighted (see graph on opposite page).

The GRDC also aims to act as a catalyst in growing and leveraging total grains R&D investment in Australia.

For example, for every dollar the GRDC invested in the Future Farm Industries program, it leveraged $2.6 from research partners.

Every dollar the GRDC invested in the Partners in Grain program, it leveraged $1.4 from research partners.

And for every dollar the GRDC invested in the Mungbean Breeding program, it leveraged $1.7 from research partners.

The majority of the GRDC's investment attracts contributions from either the research partner contracted or other agencies.

The most common sources of leverage are universities, state government departments and CSIRO. Independent economic assessment is also conducted on GRDC's investment portfolio.

In 2010/11 the GRDC undertook impact assessment studies of eight clusters of projects as part of the core business process to evaluate the impact of its R&D and report to stakeholders.

The studies assessed the economic, social and environmental benefits arising from GRDC investments. They were undertaken through an independent consultant in accordance with the guidelines developed by the Council of Rural Research and Development Corporation Chairs.

The previous GRDC investment strategy has delivered great benefits to Australian grain growers.

However in the new strategic direction GRDC aims to tighten the portfolio by providing increased investment in a more focused way.

This will see some consolidation in the number of individual projects with a shift to investment strategies focused in six key areas: meeting market requirements, improving crop yield, protecting your crop, improving your farm resource base, profitable farming systems and building skills and capacity.

BH: A quick glance at the GRDC grower report seems to show that the wheat levy contributes the most money and receives the least funding for research. WA as a contributor and receiver also seems to be short changed. What's the reason for this?

KD: The information provided in the grower report is a high level representation of how the investment portfolio is split across "cross commodity" and also by region.

By far GRDC's largest investment is in cross commodity research which looks at the farming system as a whole, like crop protection and herbicide resistance, soils and other areas critical to the profitability of the whole farming system.

A considerable proportion of this cross commodity investment benefits wheat production however is attributed to farming systems research more broadly.

Having said that GRDC's direct investment specifically in wheat has also declined due to dis-investment from wheat breeding as this is being done by the commercial sector.

GRDC invests in pre-breeding and quality for wheat specifically. In terms of investment by region, the pie charts included in the grower report show GRDC's investment in each region with research partners, not necessarily where the benefit may be had.

The GRDC is also strongly committed to and supportive of the National Grains RD&E Strategy.

RD&E delivery will have national research which can be done anywhere provided it's delivered in the relevant regions, regional delivery and local extension as well as international collaboration. GRDC invests where the best research capacity exists. There is a higher concentration of research organisations on the east coast of Australia than the west coast.

GRDC invests with the research organisations that have the skills and expertise to do the work regardless of where they are located to get the best return for Australian grain growers, for example work done in institutions like CSIRO, Waite campus, ACPFG, the Australian Cereal Rust Control Program may be undertaken in regions other than in the west but the benefits directly contribute to the western region and the results are made broadly available.

Last week GRDC also announced a major investment in AEGIC based in WA with $20m direct contribution over five years.

BH: What major challenges do WA grain growers face in the deregulated market and how do growers make the most of the opportunities presented to them via the GRDC's grower levy-funded investment?

KD: The Australian grains industry has undergone a fundamental change with the deregulation of wheat marketing. The way growers and grain marketers operate in the deregulated environment is completely different. Australian grain growers need to be positioned to take advantage of the benefits as well as mitigating the potential negative impacts of deregulation.

The globalisation of the supply chain brings a big change. Previously the industry was controlled by Australian-owned grower corporations.

Now the increased participation of large multi-nationals will bring increased competition, different demands as well as new skills, expertise and opportunities to the industry.

GRDC's mandate is quite specific and focused on R&D.

GRDC Meeting market requirements theme is focused on producing grain customers wants with quality attributes.

There are a range of activities that specifically support this theme including investments in wheat classification through Wheat Quality Australia and in malt and barley accreditation through Barley Australia, a number of specific investments that will secure the long-term competitiveness of Australian growers in relation to grain quality and a $20M investment in the Australian Export Grains Innovation Centre located in WA.

BH: What's your take on WA growers' attitude to paying the levy?

KD: GRDC is committed to ensuring that the levy investment growers make is the best possible investment they can make. Many farmers have seen the results RD&E has delivered to them on their farm in their lifetime.

GRDC needs to continue to demonstrate and deliver benefits of its investment on farm and is committed to doing that.

The fact that there is such strong support among growers to pay the GRDC levy is a real tribute to research, development and extension undertaken in Australia.

  • Farm Weekly also posed a number of questions to the Federal Department of Agriculture, Fisheries and Forestry. A response was not provided and the questions were forwarded to the GRDC by the department. Growers with concerns about the spending of levies should contact Kylie Dunstan at the GRDC on 0438 630 491. If you have any comment for Farm Weekly email
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    16/11/2012 8:08:29 AM, on Farm Weekly

    Well done to Bobbie Hinkley for raising the profile of the GRDC levy issue. No-one argues that R&D isn't important! The problem is the mandatory levy as it displaces increased productivity that would occur naturally from the private sector. The GRDC is a centralised beaucracy not with unlimited money for propaganda. Growers are continually hit with the nauseous sales pitch. Farmers hard earned money should be spent by them on R&D projects they choose. This is the test the GRDC should be subject to but one I think they would fail dismally.
    zero till
    21/11/2012 7:08:16 PM, on Farm Weekly

    You do have a choice. I am involved with RACs and local grower groups and through GRDC funding got many local R&D projects going with excellent outcomes. In NSW the ones that complain about the GRDC don't attend updates and have no interest in field days or research and are usually more sheep focused than crop.
    22/11/2012 4:09:13 AM, on Farm Weekly

    The GRDC is yet another agricultural junket taking farmers money without their consent.


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