Key Elements of the 2001-2002 Plan Revenue and Expenditure for 2001–2002
Corporation's Financial Position Program Evaluation
Consultations with Industry Notification of Significant Events
Other Developments
Key Elements of the 2001–2002 Plan

Our planned expenditure for 2001–2002 is $24.9 million — down from $25.9 million in 2000–2001. Two main factors are causing this decrease:

1.        Significant lower expenditure on the Agroforestry sub-program due to lower funding from the Natural Heritage Trust. RIRDC funding to the Agroforestry Sub-program is up from $0.7 million to $1 million in 2001·2002.

2.        A budgeted surplus, in accrued terms, on RIRDC core of $437,900 compared with a planned deficit of $80,000 in 2000·2001. This action is to help strengthen the funding position of our non-levy operations as we close the 2001-2002 year.

Other highlight elements of the 2001-2002 budget framework are the inclusion of around $1 million in expected revenue from other like funding agencies towards a joint initiative on a research program to help strengthen management capacity across our rural industries, and an expanded fodder initiative based on higher industry contributions to their R&D activities. Expenditure on both elements is dependent on this revenue being received by the Corporation.

In aggregate this expenditure of $24.9 million will go to funding and oversighting research projects across more than 20 sub-programs. As in previous years this project portfolio is drawn from the corporate and sub-program five–year plans and close dialogue with our industry partners. Information on each sub-program is presented on pages 17-69 of this Plan. This is where the more detailed industry-specific information is presented, including a listing of new projects to be funded in some of 2001–2002. Our website should also be referenced for details on ongoing projects.
 
All programs are directed to one overall outcome:
  A more profitable, dynamic and sustainable rural sector.

The outputs from each of our Programs are:
  Knowledge, processes and technology that support achievement of the planned outcome.

Program 1: Prospective New Industries

Planned Outcome

Improved prospects for new industries in rural and regional Australia.

Inputs

Budgeted funds of $2,465,567. This compares with $2,397,994 in 2000·2001. This will be financed principally from Commonwealth appropriation funds but there are also some voluntary and statutory industry contributions. For 2001-2002, a separate kangaroo sub-account has been set up (p.101) with the introduction of a statutory levy for that industry.

Some Key Outputs for 2001–2002

1.1 New Plant Products

·         Key reports on a number of plant-based enterprises ranging from culinary herbs, to olives, to bushfoods and tropical fruits.

·         Wide dissemination of research outputs to existing operators and possible new entrants.

1.2 New Animal Products

·         Key reports on the production and marketing challenges facing new animal based enterprises such as kangaroos, ostriches, emus, sheep and goats milk.

·         Wide dissemination of research outputs to existing operators and possible new entrants. Specific focus on integration along the value-added chain.

Program 2: Emerging New Industries

Planned Outcome

Accelerated growth and development of emerging new rural and associated processing industries.

Inputs

Budgeted funds of $5,265,597. This compares with $6,792,022 in 2000-2001. This will be financed from Commonwealth appropriation funds, statutory levies on the deer industry, and cashmere and mohair production, matching dollar for dollar those levy funds, voluntary industry contributions and some joint funding with Horticulture Australia Limited.

The Joint Venture Agroforestry Program will receive funds from Land and Water Australia, the Forest and Wood Products Research and Development Corporation, the Natural Heritage Trust, the Murray Darling Basin Commission, the Australian Greenhouse Office and the Grains Research and Development Corporation.

Some Key Outputs for 2001–2002

2.1 Asian Foods

·         Consolidated information on production, post harvest handling and markets for a range of Asian vegetables.

2.2 Agroforestry and Farm Forestry

·         A better understanding of agroforestry systems for low to medium rainfall areas and better genetic material for these areas.

2.3 Deer

·         Improved mechanisms for extracting greater value from venison co-products and velvet antler.

2.4 Essential Oils and Plant Extracts

·         New five year R&D Plan.

·         A study on Tasmannia lanceolata (mountain pepper) which has considerable market potential as a flavour and fragrance due to its distinctive aroma.

2.5 Organic Produce

·         Identification of successful weed management practices for organic production systems.

·         A successful National Organic Conference which will be held in August 2001.

2.6 Rare Natural Animal Fibres

·         Development of clip preparation standards for alpaca fibre.

2.7 Tea Tree Oil

·         A range of reports that highlight the medical qualities of tea tree oil in areas such as inflammation and microbial activity.

2.8 Wildflowers and Native Plants

·         The development of new wildflowers that can be evaluated by growers and a better information base on the value/volume of wildflower exports.

Program 3: Established Industries

Planned Outcome

Maximisation of the contribution of R&D to the profitability and sustainability of the established rural industries for which RIRDC provides R&D management services.

Inputs

Budgeted funds of $9,332,401. This compares with $9,103,498 in 2000-2001. This will be financed principally by industry levies and matching dollar contributions from the Commonwealth. Fodder outlays are being expanded significantly based on higher voluntary industry contributions. Higher outlays to this sub-program are dependent upon receipt of these industry funds.

Some Key Outputs for 2001–2002

Chicken Meat

3.1   Finalisation and publication of a report on the status of the Australian poultry flock with regard to Newcastle Disease viruses.

·         Development of a generic, national environmental management system for Australian chicken meat farms.

3.2 Eggs

·         Finalisation and publication of a report on the status of the poultry flock with regard to Newcastle Disease.

·         Data on the nutritional value for poultry of a wide range of feed ingredients through the Australasian Livestock Feed Ingredient (ALFI) database.

3.3 Honeybee

·         New mechanisms to detect queen bees in managed hives.

·         Further development of the glycenic index of honey so that it can be used to provide advice for the use of honey by diabetics.

3.4 Rice

·         Release of new rice varieties that will replace a major share of current production.

·         Updates of Ricecheck and circulation to all growers prior to sowing.

3.5 Horses

·         Handbook on equine exotic diseases.

·         Discussion paper on new genetic technologies and their significance to the Australian equine industry.

3.6 Fodder Crops

·         Commercialisation of new oaten hay varieties and a new microbial inoculant for hay preservation.

3.7 Pasture Seeds

·         Improved pollination of lucerne seed through the successful introduction of leaf cutter bees and the development of appropriate management strategies.

·         Development of a set of best practice production guidelines for sub-clover seed production.

Program 4: Future Agricultural Systems

Planned Outcome

Identification of key generic cross-sectoral issues confronting the rural sector and appropriate R&D programs that will benefit the sector and the nation.

Inputs

Budgeted funds of $4,022,743. This compares with $3,350,000 in 2000-2001. This will be financed principally from Commonwealth appropriation funding. There is a component of joint funding from other RDCs including Farm Occupational Health and Safety initiatives. The 2001·2002 budget assumes that around $1 million will be raised from other funding agencies for a joint initiative on ‘Innovating and Developing Human Capacity in Rural Industries’. Spending for that activity is dependent on this revenue being received.

Some Key Outputs for 2001–2002

4.1 Global Competitiveness

·         A series of reports highlighting agricultural trade policy reform, their implications and use to support WTO trade negotiation developments.

4.2 Resilient Agricultural Systems

·         Review of farm and resource management issues related to genetically modified crops.

·         Workshop on new pharmaceutical, nutraceutical and industrial products.

·         Commercialisation of Distichlis for rehabilitation of highly saline areas for grain, turf, and grazing.

4.3 Human Capital, Communications and Information Systems

·         A farmers’ guide to the use of e-commerce in agriculture.

·         Publication and communication of a series on Options for Change for Farming People – Doing Things Differently.

Program 5: Portfolio Management

Outcome Supported

A more profitable, dynamic and sustainable rural sector. The Corporation will do this by ensuring it remains a cost-effective, leading edge investor fostering competitive advantage in rural industries.

Inputs

Budgeted funds of $3,751,756. This compares with $3,749,191 in 2000·2001. These funds allow provision for research coordination and management activities, corporate and program related communication activities and corporate/administration support in delivering the 2001–2002 Plan.

Planned Outputs

·         Support and facilitate the outputs of RIRDC’s Programs 1–4.

Some Key Outputs for 2001–2002

·         Continue to publish and distribute quality research/corporation reports.

·         Further develop our website www.rirdc.gov.au so that it is not just the key hub of our information systems with high public usage but a gateway to other relevant sites.

·         Follow up the user survey completed in April/May 2001.

·         Complete an evaluation of a set of completed projects for Program 2 ‘Emerging New Industries’.

·         Maintain a significant investment in vocation related staff training.

The Corporation's Revenue and Expenditure for 2002–2002

The 2001–2002 Plan is framed around total Corporation revenue of $24.6 million. This is made up of a Commonwealth general appropriation of nearly $11.5 million, statutory levy and associated Commonwealth matching revenue of $8 million and other external income of around $5.1 million.

The proposed expenditure in 2001–2002 is $24.9 million. In aggregate terms, the key expenditure areas are as follows:
 
Research and Development
$m
As % of total expenditure
Prospective New Industries
2.46
9.9
Emerging New Industries
5.26
21.7
Established Rural Industries
9.33
37.5
Future Agricultural Systems
4.02
16.1
Program Development
0.08
–
Research Coordination and Management
1.60
6.4
Communications and Consultation
0.35
1.4
Functional Support Areas
$m
As % of total expenditure
Corporate
0.52
2.1
Communications
0.35
1.4
Administration
0.88
3.5

The Corporation's Financial Position

On an accrued basis the reserves held by the Corporation at the end of June 2001 and the end of June 2002 are estimated/forecasted as follows:
 
 
RIRDC
Core ($)
Sub-Accounts ($)
Consolidated

($)
Estimated 
end June 2001
(1,659,946)
6,619,892
4,959,946
Forecasted 
end June 2002
(1,222,046)
5,905,870
4,683,824

On a cash basis, the figures are as follows:
 
 
RIRDC
Core ($)
Sub-Accounts ($)
Consolidated
($)
Estimated 
end June 2001
300,000
5,605,013
5,905,013
Forecasted 
end June 2002
300,000
4,887,797
5,187,797

Where a sub-program is funded by statutory levies or significant external income, separate industry sub-accounts are held. Details begin on page 90. Nearly all of these sub-accounts hold reserves, which are forecast to be around $5.9 million at the end of June 2002. This is down from $6.6 million at the end of June 2001.

For RIRDC Core (the remainder), the forecast reserves are negative in accrued terms and just positive in forecast cash terms ($300,000). It will be tight but, in the view of the Board, the reserves set out in the above tables should be sufficient for 2001–2002 operations given the risk profile of the Corporation. In making this judgment, Directors are aware that industry-funded reserves cannot be used to underpin the financial viability of the non-levy based accounts and note that the 2001-2002 budget is structured to generate a surplus in RIRDC core non-levy based activity of $437,900.

Program Evaluation

This Plan sets aside funds to continue our rolling program of ex-post project evaluations. Details are on page 78. In 2001–2002 a set of projects in Program 2 will be evaluated. This follows the Program 4 evaluations done in 2000–2001. The results of these evaluations will be presented in the Annual Report for that period. However, in short, they show rates of return for the 18 evaluated projects ranging from 29 to 49 percent and benefit/cost ratios ranged from 7 to 190.

Consultations with Industry

Prior to finalising the Plan, the Corporation consulted with the following industry organisations:

·         National Farmers’ Federation

·         Australian Chicken Meat Federation Incorporated

·         Australian Egg Industry Association

·         Deer Industry Association of Australia

·         Ricegrowers’ Association of Australia

·         Australian Honey Bee Industry Council

·         Australian Horse Industry Council

In the case of the National Farmers’ Federation, consultations were on the total Plan and, in the case of the others, on those parts of the Plan that related directly to them.

Notification of Significant Events

The Corporation has reviewed this Plan in terms of section 15 of the Commonwealth Authorities and Companies Act 1997, which defines a particular class of proposal as ‘significant’ and notifiable to Ministers. The Corporation confirms, in the context of section 15, that there are no ‘significant’ proposals in this Plan that should be drawn to the attention of Ministers.

Other Deveoplments

While not in the same category as s.15 CAC Act notification, the Corporation advises that this year’s budget figures at pp.7-12 do not include the Dried Fruits Research and Development Council. This Council is being integrated into Horticulture Australia Limited.

 RIRDC ANNUAL OPERATIONAL PLAN  2001 - 2002 - CONTENTS PAGE