Program Overview

Background and Long-Term Strategy

The Australian rice industry is primarily based in the Murrumbidgee and Murray Valleys of southern New South Wales.

Over the last 20 years the number of farm businesses that have predominately grown rice have declined as the average area of the farms have increased. ABARE estimate there are currently around 1,500 rice farm businesses.

Australian rice production peaked in 2001 with over 1.7 million tonnes being produced. The amount of rice produced in 2003 to 2005 was severely affected by poor climatic conditions with only 390,000 tonnes in 2003, 528,000 tonnes in 2004 and 305,000 tonnes in 2005. Weather conditions improved in 2006 with just over 1 million tonnes being produced. However, rice production was less 167,000 tonnes in 2007 due to a return to severe drought conditions. In 2008, it is expected to be less 15,000 tonnes (less than 1% of annual average production). Rice yields averaged close to 9 tonnes per hectare over the last five-years.

GVP has fluctuated over the last five financial years due to changes in production caused by severe drought conditions in 2003, 2004 and 2005. GVP has averaged $152 million over the last five financial years, peaking at $255 million in 2005-06 (ABARE). GVP was estimated to be $23 million in 2007-08.

Prices received by rice growers are highly variable with rice paddy returns averaging $204 per tonne in 2000-01 and $299 per tonne in 2003-04. Returns averaged around $270 per tonnes in 2006-07.

Domestic per capita rice consumption has increased from 2 kg per person in the late 1970s to 11kg per person in recent years. International demand for Australian rice is also expected to increase, despite protection barriers restricting sales in a number of potential key markets.

Only 6.3% of the world's rice production is traded. This is valued at $US8.6 billion. Trade has remained limited due to self-sufficiency based production policies, high levels of subsidies for domestic production and high levels of tariffs on imports. Key exporters are Thailand, India, the United States and Vietnam.

In a normal year Australia exports approximately 80% of the annual crop (valued at $800 million to more than 80 countries including Asia, the Pacific and the Middle East). Due to drought conditions in 2005, Australia became a net importer both in value and volume. The negative trade balance was corrected in 2006 with improvements to climatic conditions.

During a ‘normal' growing season, a crop of 0.8-1.2 million tonnes can usually be expected. However, average rice production has been severely affected by water availability due to poor seasonal conditions, water prices and temperature variability during the growing season. Continued efficiency improvements to water usage will be integral to the future profitability and sustainability of the industry.

Increased collaboration and linkages with other research organisations and funding bodies is a key aim of the rice program. This was initially prompted by the first three years of drought when income was severely reduced resulting in a severe decrease in the size of the program. Greater collaboration and linkages with other funding bodies would provide some insulation from fluctuations in rice generated income. It would also provide some economies of scale in research activities by linkages with international research organisations (including the International Rice Research Institute).

With production expected to be less than 1% of normal production in 2008, levy income will be reduced to less than $236,000 in 2008-09. As a result, out year commitments cannot be covered and key research staff will not be able to be retained by the Program. It is therefore proposed that Program R&D expenditure be reduced to $990,000 (with a core contribution of $140,000 be used to supplement statutory income). This will ensure the key research staff (especially at Yanco Agricultural Institute can be retained and the key objectives of the Program can continue to be addressed.

Key Long-Term Strategies

The RIRDC Rice R&D Program invests in  research and development that will:

• provide varieties that result in increased water efficiency at the farm level and that retain the key quality attributes required to market the product both domestically and internationally
• improve crop establishment, agronomy / physiology, nutrition and protection from weeds, pests and diseases
• improve the profitability and sustainability of the rice-based farming system
• foster and achieve innovation, both on and off farm
• support ongoing Australian rice research and extension capacity
• optimise participation and develop people's potential to contribute to the industry