RIRDC ANNUAL OPERATIONAL PLAN 2007-2008

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RIRDC ANNUAL OPERATIONAL PLAN
2007-2008

Portfolio One – New Rural Industries

General Manager
Dr Roslyn Prinsley
Ph: 02 6272 5227
Fax: 02 6272 5877
roslyn.prinsley@rirdc.gov.au

Contents

New Rural Industries – Overview
1.1 New Plant Products
1.2 New Animal Products
1.3 Asian Food
1.4 Essential Oils and Plant Extracts
1.5 Rare Natural Animal Fibres
1.6 Tea Tree Oil
1.7 Wildflowers and Native Plants
1.8 Bioenergy, Bioproducts and Energy

New Rural Industries – Overview

Portfolio Goal

To provide the knowledge for diversification in Australia’s rural industries

Portfolio Strategies
To invest in R&D for new rural industries:

That have significant market opportunities

Where Australian industry is likely to have a competitive advantage

That are attractive to producers for expansion

Portfolio Success Measures
We will know that we are successful when:

Sector five-year plans meet milestones and deliver on objectives

Knowledge is generated that meets the needs of rural industries

There is a high level of support from industry and government stakeholders

There is informed uptake of new technologies and industries

Background
Pressure on Australian agriculture to diversify
There are strong and growing pressures on Australian agriculture to diversify – declining terms of trade for commodities, increasing low-cost commodity competitors and structural change driven by water reform and climate change risk. New rural industries are a critically important part of Australian agriculture’s response to these drivers.

Value to Australia’s Economy
New rural industries provide substantial benefits to Australia. In 1960, 16% of total agricultural GVP was from industries other than milk, meat, grains, wool and sugar. However, by 2005, new industries formed 29 % of total agricultural GVP. These included new rural industries such as canola, wine and cotton.

The value of 27 of Australia’s emerging new rural industries is estimated to be $673m and to contribute 2.2% of the gross value of farm production. Over 60% of farmers now have multiple enterprises, accounting for over 70% of the value of agricultural output.

New rural industries’ importance to agriculture and rural Australia
This portfolio endeavours to develop new rural industries which provide farmers with new markets to meet changing consumer needs and fashions, increase grower profitability and access sustainable production alternatives. New rural industries are also sought and supported which bring opportunity, diversity and resilience to rural Australia.

Challenges and Opportunities
Australian farmers have adopted many new rural industries, including significant crops such as cotton, lupins and canola. While a proportion of new rural industries grow to become such major industries in their own right, others fail completely, while some remain small niche industries. This is because new rural industries face similar challenges to established rural industries such as the achievement of suitable product quality and yields and compliance with food safety, quality control and occupational health and safety and biosecurity requirements. However, they have considerably less resources to meet these requirements than do established rural industries. Unlike established rural industries, they also need to concurrently develop a cohesive industry organisation, new markets and supply chains. Specific challenges include:

Building human capacity for industry development and research
There is a shortage of leaders who can take an industry from a small scale group which lacks a cohesive structure but has latent potential to an emerging and competitive industry with a highly prospective future. There are also not enough volunteers with the capacity to support properly functioning industry bodies. Research capacity for rural industries is declining at a time when the need for rural R&D to underpin further productivity growth and diversification is more urgent than ever. These have been identified as critical issues for the development of new rural industries.

Water
Availability of water in many parts of Australia limits the development of some industries and favours the development of high value and water efficient new crops. RIRDC will seek to identify and develop new rural industry opportunities for high value and water efficient crops as well as opportunities in northern Australia.

Energy and climate change
Energy is a key input to agricultural production that is under increasing price pressure. Bioenergy may have a substantial, but as yet uncertain, place in Australia’s energy mix and RIRDC is well-placed to contribute R&D to this issue. Cost effective alternative fuel technologies and feedstocks are required which both maximise reduction of CO2 emissions, decrease energy costs, and increase energy efficiency and security. A new bioenergy and bioproducts industry which replaces fossil fuel products should benefit farmers looking for profitable diversification options. A new bioenergy and bioproducts industry also has scope to reduce production of greenhouse gases.

RIRDC’s challenge is to work with new rural industries to achieve their goals and meet these challenges through research and development where appropriate.

Key R&D Issues

Understand consumer needs to inform new industry development and direction

Communicate and collaborate with industries to identify research priorities and to ensure their adoption

Improve quality of products and support development of sustainable and productive production systems

Assist new rural industries to ensure that products and systems meet safety standards

Support research and development to improve processing, storage and marketing

Foster the development of new products and industries

Strengthen development of new rural industries by supporting creativity, innovation and research capacity and capability

Assist regional development and rural wealth creation

Key Deliverables for 2007–08
The portfolio proposal for 2007–08 will deliver:

A new program in bioenergy, bioproducts and energy

develops new industry options for farmers and regions
addresses carbon sequestration goals
addresses fuel security needs
provides a forum for research and industry networking and industry development
develops a new research and commercialisation program in "methane to markets"
improves energy efficiency

A strategic review of how RIRDC supports R&D for new rural industries and further work to improve data availability

Three new five-year plans for renewed programs which are developed on the basis of strong industry partnership evidenced by voluntary contributions–

Essential Oils
Wildflowers and Native Plants
New Plant Products

Four programs continuing to meet five-year plan goals and milestones

New Animal Products
Asian Foods
Rare and Natural Fibres
Tea Tree Oil

1.1 New Plant Products

Research Manager:

Mr John Oakeshott

Ph: 02 6272 5472

Fax: 02 6272 5877

John.oakeshott@rirdc.gov.au

Objectives
To facilitate the development of new rural industries based on plants or plant products that have commercial potential for Australia

Strategic plan and internet accessibility
This program has separate five-year R&D plans for native foods, culinary herbs, longan and olives, which are accessible at http://www.rirdc.gov.au/programs/npp.html. In 2007–08 strategic plans for the New Plant Products Program and Native Foods will be developed.

Sources of funds
This program is funded by voluntary industry revenue and RIRDC core funds provided by the Federal Government. In 2005–06 close to 15% of the R&D budget was sourced from the industry and this is expected to increase and preference will be given to project applications that are also supported by funds from industry sources.

Total R&D expenditure budget $1,876,507

Background
As a conservative estimate, the GVP of the major crops within the current program is about $100 million – mainly made up from the Native Foods industry ($20 million), Herbs, Spices ($39 million), and olives (oil & table $30 million). The program covers a vast range of crops and invests in (1) products not previously grown commercially in Australia, and (2) expansion of existing products for a new market. The investment is aimed towards crops and new plant industries that are too novel for support from other R&D Corporations. This program is categorised into seven programs:

Native Foods (indigenous to Australia)

Culinary herbs, spices and beverages

Olives

Extractive & fibre crops

Fruit, vegetables and nuts

Grains and pulses

Miscellaneous crops and activities

Investment from this program is supporting new rural industries (or crops) that have the potential for diversification, differentiation, and value adding for rural producers.

Key long term strategies
Invest in R&D for new rural industries:

That have significant export or domestic market opportunities

Where Australian industry has a competitive advantage, for example in production, seasonality, or market access.

That will be attractive to producers to enter and expand the industry

Key strategies for 2007–08
The research priorities are:

Increase domestic and international demand for new plant products

International recognition of the quality, safety, reliable supply and innovation of Australian produce

Profitable and sustainable supply chain systems

Effective production and marketing decisions

Strengthening the enabling environment, industry capacity, motivation and commitment

Expected key outputs for 2007–08

Business plan for kakadu plum

Native Foods Five-year Plan

Green tea growers’ guide (updated)

Paprika oleoresin report – market potential and infrastructure for processing

Olive manual (growers’ guide)

Olive pest and diseases field guide

Tropical fruits product description language handbook

New crops website

At least one new Minor Use Permit for the herb & spice industry

New Plant Products Five-year Strategic Plan

Native foods recipe book

Expected key outcomes for 2007–08

Improved market development resulting from identification of unique selling points of main native foods;

An olive industry Environmental Management System developed and implemented

Increase rambutan production through improved management practices

Greater engagement of the tropical fruit industry with R&D through the establishment of a tropical fruit industry R&D advisory committee

Greater engagement of the green tea industry with R&D through the establishment of a R&D advisory committee

Development of a pomegranate germplasm library and a variety assurance system

Key Performance Indicators
This program deals with a diverse and complex range of industries, at various stages of development.

We will know we are successful when:

The sector five-year plans are meeting objectives

We generate knowledge that meets the needs of rural industries

There is a high level of support from industry and government stakeholders and continuing investment

We can demonstrate that RIRDC investment leads to uptake of new technologies and industries

Some specific examples, as detailed in the strategic plans for individual industries, are:

Commercially viable best-practice olive production systems that are profitable, efficient and sustainable

Native foods accepted as a traditional food by Food Standards Australia and New Zealand (FSANZ), allowing increased access to international markets

Increase in the number of permits from the APVMA for use in the herb and spice industry, leading to best practice

Increase in the number of permits from the APVMA for use in the coffee industry, leading to best practice

New projects being funded or under consideration in 2007–08 include:

Project No Title Researcher Phone

PRJ-000339 Green tea profitability and environmental assurance* Dr John Golding 02 4348 1926

PRJ-000420 Commercialising cocoa growing in north Queensland* Dr Yan Diczbalis 07 4064 1128

PRJ-000385 Technological and biological factors affecting sterols in Australian olive oils* Mr Leandro Ravetti 03 5272 9500

PRJ-000389 Characterisation of phenolic compounds in oils produced from frosted olives* Ms Claudia Guillaume 03 5272 9500

PRJ-000338 Development of golden linseed as a cash crop for the health market* Ms Margaret Campbell 08 6488 1792

PRJ-000348 Collection and selection of purslane as a commercial vegetable crop Dr Guijun Yan 08 6488 1240

PRJ-000320 Longer shelf life and consumer acceptance of watercress salad products Dr Lee Peterson 03 6248 5233

PRJ-000162 Integrated polyculture industry Ms Pia Winberg 02 4455 5518

PRJ-000342 Evaluation of edible Australian mycorrhizal fungi as food crops* Mr Michael Powell 07 5445 5421

PRJ-000356 Native legumes as a grain crop for diversification in Australia Dr Heather Clarke 08 6488 1648

PRJ-000347 Australian wild rice: A new sustainable wild food enterprise Dr Penny Wurm 08 8946 6355

PRJ-000003 Developing harvest technologies for C. australasicum (tall scurf-pea) Mr Steve Hughes 08 8303 9408

PRJ-000330 Current issues in intellectual property for the Australian rural sector Professor Brad Sherman 07 3365 6193

PRJ-000436 RIRDC Australian new crops website Dr Rob Fletcher 07 5465 4121

Note: An asterisk (*) indicates that the Corporation is still to finalise amendments to the project.

New Plant Products Budget Statement for 2007–08

1.2 New Animal Products

Research Manager
Dr Peter McInnes
Ph: 08 8556 7331
Fax: 08 8556 7289
mcinnes2@comstech.com

Objective
To accelerate the development of viable new animal industries.

Strategic plan and internet accessibility
The program has a three year R&D plan 2006–2009 which is accessible in hard copy and at http://www.rirdc.gov.au/reports/NAP/05-153.pdf . A Kangaroo Industry Plan 2005–2010 is accessible in hard copy from RIRDC and at http://www.rirdc.gov.au/pub/KangarooIndustry-Plan2005-10.pdf

Sources of funds
This program is funded essentially from RIRDC core funds provided by the Federal Government. Preference will be given to project applications that are also supported by funds from industry sources. Kangaroo and Ratite (covering ostriches) R&D are funded from this program from statutory levies plus Commonwealth contributions. Each of these R&D areas have separate sub-account budget statements.

Total R&D expenditure budget $1,377,300

Background
Over 40 animal species are the subject of new animal industry development. The estimated GVP was $250m in 2005–06 and has increased by 40% in the last five years.

In 2006–07 the Corporation funded 16 projects for different new animal industries or enterprises. These projects which include meat, skin, and milk products, are along various segments of the value added chain from production to marketing. For the very small potential industries initially R&D is directed to feasibility studies and/or the development of a business plan.

Funding includes research, development to commercialisation of native and feral animal products where enhancement of the environment and biodiversity are not threatened. Specific projects are in progress for kangaroo, emu, crocodile, turtles and snakes. Other projects continue in farmed rabbit, ostrich, camel, gamebirds, ducks, silk, sheep and goat milk.

Key long term strategies

Fund production, processing, transport, storage and marketing R&D on animal products

Assist industry and enterprise development by the Corporation’s participation at national industry meetings and facilitating integration activities across various prospective animal industries

Disseminate outputs via industry newsletters, publication of final reports, media releases and electronic communication

Strengthen development within and across industries by supporting creativity, innovation, research capacity and capability, and international linkages

Increase export values and market access

Assist in the development of business plans for some potential innovative animal industries

Increase co-funding of R&D from industry, enterprises and public sector interests

Identify commercialisation opportunities from R&D outputs

Key strategies for 2007–08

Develop greater utilisation of meat, skin and milk products by increased knowledge of science, technology, and processing new products to increase consumer acceptance and demand

Develop improved reproduction of some species by increased conception to artificial insemination, and improved breeding programs via quantitative genetics and genomics

Encourage further interaction between enterprises in the value chain by increased liaison, planning and implementing R&D

Support greater national and international linkages for industry and research personnel

Continue to commission investments in R&D addressing the 2006–09 NAP Plan and the Kangaroo Industry Plan (2005–10)

Encourage participation of post graduates and post doctorates in projects

Expected key outputs for 2007–08

Identified export opportunities for crocodile and camel skins in Italy and USA

Assessed manufactured meat products containing various amounts of kangaroo products

Continued improvement in artificial insemination conception rates in alpaca

Developed product traceability options for new meat products

Improved understanding of potential increased areas in which kangaroo can be commercially harvested, to inform Government policy considerations

Obtained a snap-shot of the meat processing capacity and operations for new rural industries

Identified chick losses in ostriches

Expected key outcomes for 2007–08

Increased production and product differentiation for rabbits

Improved rearing facilities for mating and rearing of crocodiles

Greater domestic demand for kangaroo meat for domestic consumption

Improved diets for rate of weight gain in ducks

Advances in ratite reproduction technology

Key Performance Indicators

Increase in the GVP of new animal industries
R&D outputs being used in commercial enterprises
Identification and business assessment of potential new animal industries

New projects being funded or under consideration in 2007–08 include:

Project No Title Researcher Phone

PRJ-000054
(Joint with RNF)
Advancing artificial insemination in camelids, particularly the alpaca Chris Maxwell 02 9351 4864

PRJ-000081 Management strategies to reduce ostrich chick mortality Phil Glatz 08 8303 7786

PRJ-000082 Commercial development of export markets for emerging skin industries phase 2 Brendan Goulding 07 3239 3315

PRJ-000086 Crusader improving efficiency & structure of the meat rabbit industry in Australia Kathleen Bowerman 02 6454 4052

PRJ-000089 Kangaroo meat awareness marketing outline for foodservice and consumer Mel Nathan 0413 616 683

PRJ-000303* Kangaroo and the China Free Trade Agreement John Kelly 03 6326 8639

PRJ-000309* Rational kangaroo industry entry John Kelly 03 6326 8639

PRJ-000315* Obtain perceptions of consumers & foodservice operators regarding Kangaroo meat Sarah Gutkin 02 9873 8900

PRJ-000323 Tracking crocodile skin defects - from farm to product. Grahame Webb 08 8922 4500

PRJ-000325 Innovative manufacture, installation of value adding process for farmed rabbits Robert Stout 03 5444 5520

PRJ-000327 Redclaw Selective Breeding Program John Stevenson 07 4772 2036

Note: An asterisk (*) indicates that the Corporation is still to finalise amendments to the project.

New Animal Products Budget Statement for 2007–08

Kangaroo Budget Statement for 2007–08

Ratite Budget Statement for 2007–08

1.3 Asian Food

Research Manager:
Mr John Oakeshott
Ph: 02 6272 5472
Fax: 02 6272 5877
John.oakeshott@rirdc.gov.a

Objective
To provide an R&D program that supports industry in its drive to develop new products and markets and to gain competitive advantage through improving productivity.

Strategic plan and internet accessibility
This program has a five-year R&D plan, R&D Plan for Asian Foods 2005–2010, which is accessible in hard-copy and at http://www.rirdc.gov.au/programs/af.html.

Sources of funds
This program is funded from RIRDC core funds provided by the Federal Government. However, projects jointly funded by RIRDC and Horticulture Australia will gain preference along with other industry sourced funding proposals.

Total R&D expenditure budget $454,570

Background
The largest segment of this Asian Foods program, Asian vegetables, has doubled in production value in the period 1994 to 2001, with a current estimated GVP of $150m. This is estimated to be about 6% of the total Australian vegetable industry GVP ($2.4 billion). Asian vegetables comprise an estimated 1,675 growers, who are mainly from Languages Other Than English (LOTE) backgrounds, predominantly Arabic, Chinese, Vietnamese and Cambodian. Whilst having a presence in all States and Territories, one half of the industry is located in NSW. As a general rule, small-scale market gardens operate within metropolitan areas while larger commercial holdings operate in regions. Wholesale market operators have estimated in recent years the Asian vegetable industry has been growing at over 10% per annum. Whilst Australia currently exports an estimated 16% of Asian vegetable production volume, (dominated by Queensland and Western Australia), this volume is facing increasing competition from China and Vietnam. Importing of fresh Asian vegetables is insignificant.

Key long term strategies

Educating the consumer about Asian vegetables

Reliable produce supply that meets quality requirements

Improving export performance

Communications – particularly targeting growers with Languages Other Than English (LOTE).

Identifying and developing new products, both fresh and semi-processed

Key strategies for 2007–08

Improve communication among LOTE Asian vegetable growers

Assessment of market potential for freshwater and marine vegetables

Adding value to Asian vegetables

Expected key outputs for 2007–08

Product description languages and support material for minor tropical crops in northern Australia.

Establish the anti-cancer properties of Asian crucifers and daikon (white radish).

Asian Foods workshop facilitated session on future communications completed and a plan developed.

Guidelines for the development of an edamame industry in Australia

Expected key outcomes for 2007–08

Further investment in marine vegetables based on quantified information.

Further investment in the developing taro industry based on new information.

Key Performance Indicators

Asian foods continue to show increasing sales through wholesale markets

Increase in LOTE growers engaging with industry organisations

Increase in subscribers to the Asian Foods newsletter

Increase in voluntary contributions to the R&D program

New fresh and semi-processed products under investigation for development

New projects being funded or under consideration in 2007–08 include:

Project No Title Researcher Phone

PRJ-000044* Folate content of Asian vegetables Avis Houlihan

PRJ-000048* An Assessment of the Market Potential of Fresh and Saltwater Marine Vegetables Barry Lee

PRJ-000049 Improving Communication among LOTE Asian Vegetable Growers Lisa Maguire

PRJ-000418 Adding value to Asian vegetables Jenny Ekman

Note: An asterisk (*) indicates that the Corporation is still to finalise amendments to the project.

Asian Foods budget statement for 2007–08

1.4 Essential Oils and Plant Extracts

Research Manager
Dr Roslyn Prinsley
Ph: 02 6272 5227
Fax: 02 6272 5877
roslyn.prinsley@rirdc.gov.au

Objective
To support the continued development of a sustainable and profitable essential oils and plant extracts industry that has established international leadership in production, value-adding, and marketing.

Strategic plan and internet accessibility
This program has its own five-year R&D plan, accessible in hardcopy and at http://www.rirdc.gov.au/pub/essentoi.html

Sources of funds
This program is funded by voluntary industry revenue and RIRDC core funds provided by the Federal Government.

Total R&D expenditure budget$429,116

Background
World markets for essential oils and herbal medicines have been growing strongly. The increasing acceptance of alternative medicine and the search for plant based substitutes for oil based and other synthetics is supported by strong research investment in Europe and the United States. The growth in global and domestic markets provides opportunities for the Australian industry. The program represents a diverse range of crops with widely different production and market environments. The main markets for essential oils are industrial (solvents, fragrances), cosmetic and health (fragrances, topical applications), and food manufacturing (flavouring). The main markets for plant extracts are medicinal herbs (herbal medicines), phytochemicals (pharmacological), and industrial (insecticides, agri-chemicals).

Production is throughout Australia, with Tasmania and the south-west of Western Australia as the major areas of production, particularly for perennials and tree crops. Large scale production is limited to a few crops, notably eucalypts, sandalwood and lavender. ABS trade data reports essential oils exports of $26.8m in 2003–04 and imports of $22.7m.

Australian species present considerable potential for new products but they often face considerable regulatory barriers and marketing difficulties. Essential oils and plant extracts offer a high value use of land and water resources that can be complementary in mixed farming systems. Essential oils from trees such as eucalyptus oil and sandalwood offer an additional product for producers growing for wood products and carbon credits. Plantation production also has environmental benefits in reducing the pressures from wild harvest such as with sandalwood and mountain pepper. Such crops can also assist in addressing dryland salinity issues when utilised in the right locations.

R&D is critical to improving the profitability of essential oil and plant extract industries. Quality is critical, and higher yields are needed to reduce costs. The competitive edge often comes from tailoring products to the exact requirements of the market which are dynamic. Species selection and breeding are important inputs, as is optimising production systems to deliver the characteristics required. New products and uses can give Australian producers a first mover advantage.

Key long term strategies

Plant breeding and species selection to maximise yield and tailor extracts to deliver characteristics with known markets
Crop agronomy and management systems to improve production efficiency, encourage scale and produce known characteristics in the final product
Proof of efficacy/safety for innovative uses of plant extracts, primarily for existing crops and Australian native species
Building skills in the research community to provide on-going R&D capacity to support industry development (with a focus on testing capabilities to meet, for example, regulatory requirements, counter safety concerns)
Development of novel crops and/or products with considerable production and market prospects
Foster communication and networking that builds industry capacity to cooperate to develop the markets, manage industry risks, and attract new entrants to build critical mass

Key Strategies for 2007–08

To develop a new five-year R&D plan for the Essential Oils and Plant Extracts Industries

To develop commercially viable techniques for the production of marketable extracts of artemisia, through the investigation of ways to maximise the yield of artemisinin, the anti-malarial compound

To develop and fine tune best practice procedures for commercial production of essential oil crops through detailed high quality crop manuals and their adoption

To develop a database of DNA fingerprints for economically important species and chemotypes of medicinal herbs to ensure quality assurance

Expected key outputs in 2007–08

A new five-year R&D Plan

Knowledge of the levels and anti-inflammatory and antibacterial properties of saponins, flavonoids, coumarins and diterpenes in Dodonaea viscose var Angustifolia

Quality assurance protocols to minimise pesticide residues in essential oils

Guidelines for increased yields from peppermint crops through improved micronutrient nutrition

Expected key outcomes in 2007–08

Improved lavender varieties available to industry

Improved flow of research information to growers

Improvement of peppermint crops through establishment of improved nutrition and nursery stock

Key Performance Indicators

Performance indicators include:

Number of varieties identified/developed/selected and the increase in yield of these varieties

Dissemination and use of information on the impact of crop management and harvesting time on the characteristics of a specific number of products

Dissemination and use of information on production systems that provide for improvements in productivity of a target level for specified crops

Number of registrations of products for use (across the range of registers) that have received support from the Program

Number of researchers and research labs providing services to the industry

Industry participation in the Industry Partnerships Program and growth in industry organisation membership

New projects being funded or under consideration in 2007–08 include:

Project No	Title	Researcher	Phone
PRJ-000013	Biotransformation of terpenes – Value adding to essential oils (Phase I)*	Dr Melissa Straffon	03 9545 2398
PRJ-000017	Aroma and flavour products from plant waste*	Professor Robert Menary	03 6226 2723
PRJ-000012	Control of plant pathogens using extracts from northern Australian plants*	Dr Shamsul Bhuiyan	08 8973 9712
PRJ-000018	Management of postharvest diseases using Australian essential oils*	Dr Elena Lazar	02 4348 1935
PRJ-000021	Develop Australian standards for oil of Australian Lavandin cultivars*	Dr Ian Southwell	02 6624 2453
PRJ-000019	Spatial analysis of plant-host relationships in tropical sandalwood	Dr Liz Barbour	08 9404 5491
PRJ-000020	Production of TALGA lavender industry newsletter	Ms Tere Bonner	07 4686 1191

Note: An asterisk (*) indicates that the Corporation is still to finalise amendments to the project.

Essential Oils and Plant Extracts Budget Statement for 2007–08

1.5 Rare Natural Animal Fibres

Research Manager
Dr Peter McInnes
Ph: 08 8556 7331
Fax: 08 8556 7289
mcinnes2@comstech.com

Objective
To facilitate the development of new and established industries based on rare natural fibres.

Strategic plan and internet accessibility
This program has its own five-year R&D plan, accessible in hardcopy and at http://www.rirdc.gov.au/programs/rnf.html

Sources of funds
Part of the funding for this program comes from statutory levies on cashmere and mohair and a voluntary contribution from the Australian Alpaca Association and a voluntary contribution from the Alpaca Research Pty Ltd. The remaining funds come from RIRDC’s core funds provided by the Federal Government. For that part of the program, preference will be given to project applications which are also supported by funds from industry sources.

Total R&D expenditure budget $322,000

Background
The Program’s main focus in on cashmere, mohair, alpaca fibre. However, camel hair and other rare fibre projects are also included in the Program.

The estimated GVP of alpaca, cashmere and mohair fibre in 2005–2006 was $2.825m. Compared to the previous year in 2005–2006 production remained stable for cashmere, down 12% for mohair, and up 20% for alpaca. In 2006, fibre prices increased 5% for mohair, were buoyant for cashmere and up 7.5% for alpaca.

Projects funded in 2005–2006 cover many segments of the value chain for production (alpaca, mohair, cashmere) to marketing (mohair).

Key long term strategies

Address, within budgetary limitations, published strategies and targets in the 2003–2008 R&D plan

Identify constraints and solutions hindering increasing mohair, cashmere, and alpaca production

Increase productivity on-farm by investment in reproduction and breeding research

Enhance training to increase research capability

Key strategies for 2007–08

Increase productivity by improving animal breeding innovations (alpaca, cashmere producing goats), and more successful artificial insemination rates in alpaca

Develop further benchmarking to increase production performance particularly for angora goats

Include as appropriate post-graduate in projects to increase research capacity for the rare fibre industries

Continue to encourage international linkages and overseas visits for industry representatives and researchers

Expected key outputs for 2007–08

Further evaluation of sires for the production of quality cashmere

Additional ways of communicating to increase mohair production

Knowledge of the genetics in fleece colouring in alpaca

Continued development of artificial insemination technology in alpaca

Expected key outcomes for 2007–08

Greater production from farm but less farms producing commercial quantities of alpaca fibre

Increased use of software to analyse options in mohair production

Increased use of superior sires to increase cashmere production per animal

Key Performance Indicators

Changes in the GVP of rare natural animal fibres

Improved reproduction techniques in alpaca

Adoption and utilisation of R&D results

Changes in the number of investors in the supply chain

Rare Natural Animal Fibres Budget Statement for 2007–08

Goat Fibre Budget Statement for 2007–08

1.6 Wildflowers and Native Plants

Research Manager
Dr Roslyn Prinsley
Ph: 02 6272 5227
Fax: 02 6272 5877
roslyn.prinsley@rirdc.gov.au

Objective
To improve the profitability, productivity and sustainability of the Australian wildflower and native plant industry.

Strategic plan and internet accessibility
This program has its own five-year R&D plan, accessible in hardcopy and at http://www.rirdc.gov.au/pub/wildflow.html

Sources of funds
This program is funded by voluntary industry revenue and RIRDC core funds provided by the Federal Government.

Total R&D expenditure budget $242,000

Background
Wildflowers account for 95% of Australia’s fresh flower exports. The total value of the industry was estimated at $50m (wholesale) in 2005. Australia wide it is estimated that there are some 500 growers. Growers operate in all states of Australia but there is a degree of specialisation of product in the various states, depending on climatic zones, markets and history of the industry and reflecting commercialisation of species endemic to a given state. Specialist wholesalers and exporters who deal with native flowers and wildflowers operate in most states. There are many profitable established farms and related businesses. In 2007, the industry is leaner due to the exit of mostly small scale growers who suffered from under-investment or location in marginal areas.

The wildflower industry is strongly aligned with the ‘fashion’ and ‘lifestyle’ sector where new products are in constant demand. To remain competitive on the world market, the industry needs to focus on two areas. Firstly, it must deliver quality flowers consistently. Secondly, it needs access to new products and improved varieties on an ongoing basis. While many ‘wildflowers’ originate from Australia, Australian growers account for a relatively small share of total world production. The opportunity to be the source of new and exciting products is currently underexploited. This requires long term selection of improved forms from the wild and from within plantations, as well as breeding programs. Australian wildflowers and native plants are ‘newly domesticated’ species and so there is a great deal to learn about their breeding, propagation and production systems. Many are woody species which do not attain marketable yields for some three to five years. This long lead time, compared to many traditional flower species, means that breeding and production development programs may need to continue for more than one R&D funding cycle to achieve results.

The industry has significant opportunity to capitalise on new product development, utilising our diverse range of native flora, meeting the demands of ‘fashion driven’ local and overseas buyers. This in turn will attract more investment and allow existing players to expand. On the world market, our industry’s main competitive advantage lies in its ability to source new crops and products from our diverse and unique range of endemic flora.

Wildflower growing can achieve better returns per unit area of land and per unit of water for irrigation, than many other agricultural enterprises. In addition, growing wildflowers generally requires fewer inputs of pesticides, fertiliser and water than growing traditional flowers such as roses, carnations and annuals. Many wildflower growers are well educated, own their own farms, and are often ‘sea changers’ with a significant personal interest in environmental sustainability.

Key long term R&D strategies
These are currently being developed in a consultative R&D planning process.

Key Strategies for 2007–08

To commission priority research and development from the new five-year plan

To identify means of optimising irrigation scheduling techniques for key wildflower crops

To develop and communicate commercially relevant product specifications

To continue the breeding project aimed at producing a flower for festive occasions when red flowers are not readily available at present

Expected key outputs for 2007–08 are:

New varieties and cultural and post harvest information that will enable flannel flowers and other Australian native cut flowers to be grown in protected cultivation.

A strategy for managing nutrient and irrigation levels in waxflowers with some emphasis on new hybrids to maximise growth and flower quality

Development of product specifications five foliage products in the domestic market: Stenocarpus Forest Lace, Stenocarpus Forest Gem, Lomatia fraxinifilia, Athertonia diversifolia and Grevillea baileyana.

Improved and more detailed agronomic, market and economic information available to industry concerning foliage species which is relevant to tropical and subtropical growing areas.

Australian wildflower and native plants program R&D plan for 2007–2012

Expected key Outcomes for 2007–08

New varieties of Leptospermum and Leucadendron are available for use by industry.

Key Performance Indicators

Evidence of new product development activities

New value added products

Industry involvement in product development

Availability of user-friendly production information

Support for industry-driven training, workshops and networking

New five-year R&D Plan setting out goals, strategies and performance measures

New projects being funded or under consideration in 2007–08 include:

Project No	Title	Researcher	Phone
PRJ-000331	Quality Specifications for Australian wildflowers	Bettina Gollnow	02 4640 6437
PRJ-000336	Determining Optimum Irrigation Scheduling Techniques for Key Wildflower Crops	John Okello	07 3824 9516

Note: An asterisk (*) indicates that the Corporation is still to finalise amendments to the project.

Wildflowers and Native Plants Budget Statement for 2007–08

1.7 Tea Tree Oil

Research Manager
Dr Roslyn Prinsley
Ph: 02 6272 5227
Fax: 02 6272 5877
roslyn.prinsley@rirdc.gov.au

Objective
To support the continued development of an environmentally sustainable and profitable Australian tea tree oil industry that has established international leadership in marketing, value-adding, product reliability and production.

Strategic plan and internet accessibility
This program has its own five-year R&D plan which is due for review this year. The current plan is accessible in hardcopy and at http://www.rirdc.gov.au/pub/tto5yr.htm

Sources of funds
This program is funded by voluntary industry revenue and RIRDC core funds provided by the Federal Government.

Total R&D expenditure budget fo

Background
The industry comprises about 100 growers and is located principally in northern New South Wales and on the Atherton Tableland in Queensland. About 3,000 hectares of cultivated tea tree grows in these locations. In 2005–06, 522 tonnes of oil were sold, more than double the volume sold in 2001/2. Gross value of production is about $12 million. The market for tea tree oil in the cosmetic and personal health areas is maturing with the oil no longer being sought for its novelty value. Oil is a component of a very wide range of personal health care, cosmetic and animal care products. There is also one rural industrial use of tea tree oil now commencing and at least two known pending industrial uses. About 90% of Australian tea tree oil is exported, principally to North America and Europe. Currently production in other countries is not significant, however this could change as the price increases.

The key challenge for the industry is to continue to improve profitability and increase demand. Reducing costs of production is not only important as a potential contributor to restoring profitability but also to maintaining Australia’s competitive advantage against the rest of the world. The yield from the improved seed offers significant potential for lowering costs. On the production side, continued work on breeding superior genetic material remains a priority. The challenges on the demand side are to identify new markets or enhance existing markets that will require large quantities of oil. Building on recent R&D achievements, particularly relating to safety and efficacy, and exploring new options for new applications of tea tree oil are means of attaining these goals. This requires a long-term approach with continued seed funding to demonstrate the oil’s capability and stimulating research by others. It is necessary to demonstrate to potential users and regulatory authorities that tea tree oil is safe and effective. This requires a high level of communication to potential users and authorities as well as the development of new information regarding the impact and safety of tea tree oil. The Safety Dossier developed for the European Scientific Committee on Consumer Products is being designed so that it can be used, to the maximum extent possible, to meet regulatory requirements of other countries and Directives.

Key long term R&D strategies

Enhance production systems to maintain the competitiveness of Australian growers

Identify regulatory regimes and market barriers and enhance the ability of the industry to meet safety standards

Demonstrate proof of concept/efficacy for innovative applications of tea tree oil

Foster communication that increases understanding, encouraging greater use of tea tree oil

Strategies for 2007–08

Increase yields through breeding to provide Australian industry with a competitive advantage

Investigate the efficacy of tea tree oil and develop new products

Address relevant safety issues in the tea tree industry

Expected key outputs for 2007–08

The development of plasma polymerised thin films from Australian Tea Tree Oil; an assessment of the electrical and optical properties of these polymer thin films; and test results of the polymer thin films for applications in the electronics industry

An assessment of the effects of tea tree oil on the formation of damaging biofilms by several different micro-organisms

An assessment of tea tree oil as a beneficial treatment for decolonisation of MRSA positive chronic wounds

Expected key outcomes in 2007–08

Improved seed from the breeding program

Uptake of improved seed from the breeding project by growers

Better informed product development and new products available for commercialisation

Key Performance Indicators

Oil yield increases of up to 150%, compared with the industry standard, by 2010–11

Level of uptake of improved genetic material

Level of new information available in peer reviewed journals on safety, efficacy and mode of action that originates from research funded by the program

Evidence of new product development activities

New value added products

New projects being funded or under consideration in 2007–08 include:

Project No	Title	Researcher	Phone
PRJ-000002	Use of tea tree oil against buffalo flies in cattle*	Mr Lex Turner	07 5464 8749
PRJ-000005	Effects of tea tree oil on microbial adhesion*	Professor Tom Riley	08 9346 3690
PRJ-000009	Anticancer activity of Melaleuca alternifolia (tea tree) oil*	Professor Tom Riley	08 9346 3690
	New and improved bioenergy crops	Michael Djordjevic

Note: An asterisk (*) indicates that the Corporation is still to finalise amendments to the project.

Tea Tree Oil budget statement for 2007–08

1.8 Bioenergy, Bioproducts and Energy

Research Manager
Dr Roslyn Prinsley
Ph: 02 6272 5227
Fax: 02 6272 5877
roslyn.prinsley@rirdc.gov.au

Objectives
To meet Australia’s research and development needs for the development of sustainable and profitable bioenergy and bioproducts industries.

To develop an energy cross-sectoral R&D plan.

Total R&D expenditure budget
$1,632,000

Sources of funds
This program is funded by voluntary industry revenue and RIRDC core funds provided by the Federal Government. Funding is specifically provided by the Australian Government Department of Agriculture, Fisheries and Forestry for the Methane to Markets collaborative R&D program. Bioenergy Australia is funded by the contributions from its 54 members.

Background
Demand for alternative feedstocks for fuels, electricity, chemicals and a range of commercial products has grown dramatically throughout the world in the early years of the 21^st century. This demand is driven by the high price of petroleum, domestic government policy to promote alternatives and reduced dependence on foreign oil, as well as growing efforts to reduce net emissions of carbon dioxide, other greenhouse gases. The health benefits of biofuels as well the benefits to regional development are also often drivers. An unprecedented interest in bioenergy in both the international and national arenas, and investors and engineers keen to promote new bioenergy technologies, means that bioenergy is becoming a tangible option for the future.

Methane is the dominant agricultural greenhouse gas in Australia, with methane from livestock representing 12 per cent of national greenhouse gas emissions. Reducing methane emissions is one of the most cost-effective ways to realise immediate environmental benefits due to methane's potency as a greenhouse gas and short atmospheric lifetime. Stationary energy accounts for nearly half of total greenhouse gas emissions in Australia, while transport fuels account for about 15% of total greenhouse gas emissions in Australia and this has increased by 30% since 1990.

In a ‘bio-based economy’, utilisation of current biomass material, as well as that which could become available as a result of new plantings or production systems, has the potential to reduce Australia’s fossil fuel requirements and provide raw materials for a wide range of high value products. The concept of the Bio-refinery, in which all parts of the biomass are utilised, adds value to feedstock produced for bioenergy. Products become commercially viable when integrated with other value-added products. There is currently some global effort to combine biological and thermo-chemical processes to convert biomass to a range of products including replacements for chemicals currently produced from petrochemicals, as well as biofuels. Research effort in this arena has the potential to redefine the way we grow and process our biomass resources, as well as opening the door to different ‘greener’ products and markets.

While a new bioenergy and bioproducts industry which replaces fossil fuel products could be a boon to farmers looking for profitable diversification options, it is vital to ensure that any new large scale industry has an environmentally sustainable future. The future availability of water, for example, needs to be considered.

High fuel prices are already having an impact on agriculture, as the input costs increase for many businesses reliant on long distance transport. The outlook for petrol and diesel is one of a declining resource base coupled with increasing demand. The increased reliance on imported sources of energy also` threatens Australia’s economy, future competitiveness and national security. Farming systems have been partly buffered from increasing oil prices due to changes in the way the systems run (e.g. legumes reducing dependence on N fertilisers, minimum tillage etc) but are reaching limits and increasingly ‘energy exposed’. The challenge is to become more energy efficient and self-sufficient at a farm and regional scales.

Energy R&D was also identified at a joint R&D Corporation workshop in December 2006 as an area for potential co-investment across R&D Corporations. It is proposed that a new energy cross-sectoral R&D plan be developed by RIRDC in 2007–8 for potential co-investment in 2008–09.

Key Strategies for 2007–08

To develop a new five-year R&D plan based upon extensive consultation with industry and researchers

To explore new industry options for farmers and regions

To develop and implement the Methane to Markets collaborative R&D program (funding dependent)

To strengthen Bioenergy Australia in its research networking and coordination role

To develop a cross-sectoral R&D plan for energy

Expected Key Outputs for 2007–08

A five-year R&D plan setting out goals, strategies and performance measures

Knowledge and piloting of methane to market technologies

A national Bioenergy conference to inform industry, research and government stakeholders on the latest technical, scientific and policy developments in the area

A prospectus for cross-RDC co-investment in energy

Expected key outcomes for 2007–08

A better understanding of the potential and R&D needs for bioenergy, bioproducts and energy for rural industries.

New projects being funded or under consideration in 2007–08 include:

Project No Title Researcher Phone

PRJ-000413 Sustainable bio-diesel production from perennials on pastoral land* Dr Henry Brockman 0427 479 067

PRJ-000144 Biofuels – A beginners guide and opportunities for profitable participation* Mr Michael Clarke 02 9817 5888

PRJ-000070 Commercial potential of giant reed for pulp / paper and biofuel production* Dr Christopher Williams 08 8303 9567

New and Improved Bioenergy Crops Dr Michael Djordjevic 02 6125 3088

Note: An asterisk (*) indicates that the Corporation is still to finalise amendments to the project.

Bioenergy, Bioproducts and Energy budget statement for 2007–08

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