Rural Industries Research & Development Corporation

Research & Development Plan for
the Rice Industry Program 1996-2001

Key Issues for the Rice Industry

Consumers and markets	Regulatory environments
Rice production technology	SWOT Analysis
The key issues to be addressed	Research objectives to meet the issues
Resources and allocation

Understanding consumers and markets

The Australian rice industry prides itself on being market rather than production driven. This reality has been facilitated by the vertical integration of the industry and by growers being provided by Ricegrowers' Cooperative Limited with regular information about consumer attitudes and market preferences.

Growers recognise that they ultimately control the attributes of the product required by the consumer and are willing to adopt new varieties and management strategies that result in the endproduct meeting consumer needs.

The industry will continue to invest in research to improve understanding of consumers and markets. This will be particularly important as world trade reform is achieved and new markets become accessible.

However, it is unlikely that RIRDC funding will be used for this activity because of the commercial sensitivity and proprietary nature of the information sought.

Market access, regulatory environments and subsidy regimes

Market access problems and competitor subsidies threaten the economic viability of the Australian rice industry.

In Australia, the deregulatory attitude of governments could lead to the demise of the orderly marketing structure that allows the rice industry and many other Australian rural industries to earn premium prices on export markets.

The industry attaches high priority to improving market access, reducing the subsidy regimes of its competitors and maintaining a framework for orderly marketing. However, these are primarily political issues and are not generally amenable to research solutions.

Rice productiontechnology for profitability and environmental sustainability

The Australian rice industry has maintained its competitiveness through development and adoption of new technology both before and after the farm gate.

Farm productivity must continue to improve, hand in hand with development and adoption of the best possible management strategies for use of land and water. Programs to ensure environmental sustainability are extremely important for rice production, owing to the crop's requirement to grow in pond water.

Environmental policy for rice growing is determined by the Rice Environmental Policy Advisory Group (REPAG) for incorporation in regional land and water management plans. These plans are a blueprint for sustainable irrigation in ricegrowing regions and would be endorsed by the State and Federal governments as well as the regional community.

Considerable financial resources are already teeing invested in RED to develop sustainable ricegrowing policies and practices.

These resources are being provided from components of water charges, annual rice environmental monitoring fees, irrigation RED levies, and from programs managed by government agencies, e.g. The MurrayDarling Basin Commission, the NSW Department of Land and Water Conservation and NSW Agriculture.

The Rice R&D Committee's approach to sustainability issues will therefore be to provide additional strategic funding, particularly through joint ventures, in areas where there maybe underinvestment.

The key issues to be addressed in the rice RED program are:

1. To identify and respond promptly to market needs.

2. To improve the profitability of rice production at the farm level.

3. To further the development of farming systems that use natural resources in a sustainable and beneficial manner.

4. To further identify, investigate and implement methods for valueadding rice and byproducts that enhance grower returns and reduce impact on the environment.

5. To develop world's best practice technology for harvesting, storing, handling, transporting, milling and processing rice.

6. To achieve rapid adoption of new and existing technology, both on and offfarm.

7. To encourage a collaborative approach to research, development and extension, and to strive for best use of both human and material resources.

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An analysis of the strengths, weaknesses, opportunities and
threats confronting the rice industry

Major strengths include:

• Single regional location with all growers participating in a cohesive, vertically integrated structure.
• Committed, technically efficient growers who can quickly adapt to produce highquality paddy rice of the types required by consumers.
• A highly efficient and innovative processing and marketing sector that is committed to adding maximum value to rice and servicing customer requirements.
• Land, water resources, and a climate well suited to the production of rice.
• A 'clean and green' production environment essentially free from pests and disease.
• A dedicated and committed work force.

Perceived weaknesses include:

• The industry depends on growing, processing and marketing of one irrigated crop-a narrow product base.
• The industry is a small player in a corrupt and volatile world market.
• The industry operates in one geographic locality that could suffer drought or other natural disaster.
• The industry's raw material-paddy rice-requires intensive use of water and land.
• 20 % of paddy rice, that is, the husk, is a lowvalue byproduct that is currently not fully utilised and creates a disposal problem.
• Dependence on a few major markets.
• Reliance on varieties that are susceptible to cold weather and introduced pests and diseases.
• Farm unit size suboptimal for economy of scale.
• Unrealised opportunities for valueadding.

Major opportunities Include:

• Developing markets from which the industry was previously excluded, such as Japan and Korea.
• Further developing niche markets, for example, basmati and jasmine rice types. Further differentiating rice into a larger range of valueadded products, such as breakfast cereals, instant rice convenience products and health foods.
• Adding value to rice byproducts, such as hulls and milling fractions.
• Utilising the industry's successful processing and marketing system to sell other valueadded irrigated products.
• Developing and evaluating new technology that could improve rice farm productivity and sustainability: for example, new plans breeding methodology, rice culture systems requiring less water, alternative crop establishment methods.
• Increasing the yield potential of Australian rice varieties.
• Achieving theoretical onfarm yield potential via more effective technology transfer.
• Further developing the industry's human resource base.
• Reducing the adverse environmental impacts of rice growing.
• Improving harvesting, storage, handling and transport.

Major threats to be aware of include:

• Potential government policy changes that could limit the industry's ability to remain vertically integrated.
• Loss of competitiveness in Australia's markets due to imports. Nontariff trade barriers and circumvention of World Trade Organisation obligations. Potential for the 'green revolution' to increase Asian rice yields and match the increase in rice demand predicted. Imbalance of rice supply and demand caused by depressed prices in other rural industries in southern NSW. Environmental factors such as:
• limits to water extraction from rivers to enhance the instream ecosystem;
• groundwater rise further restricting rice growing in certain locations and on certain soils;
• surface water quality standards, particularly for drainage water;
• pressure to limit stubble burning and byproduct disposal; and -soil salinity and acidity.
• Increased water prices and the transfer of the resource to higher value enterprises.
• Resistance to herbicides.
• Introduction of new pests and diseases.
• Reduction in government funding of R&D.

Research objectives to meet the key issues

Further consideration of the identified key issues and the analysis of strengths, weaknesses, opportunities and threats led to the development of research objectives in ten specific areas.

Characteristics of the ten research objectives

(a) Varietal Improvement and pure seed maintenance

Varietal improvement can lead to rapid progress in addressing most of the key industry challenges. The priorities identified for the plant breeding program include: higher yielding varieties with quality meeting consumer needs; early, even maturity; cold weather tolerance; semidwarf stature; improved seeding, vigour; pest and disease resistance; salinity tolerance.

(b) Crop establishment

Vigorous seedling growth to produce an even plant stand in the range of lSO to 300 plants per square metre provides the framework for a profitable crop.

This objective seeks to develop crop soil and water management techniques to improve establishment in areas such as: seedbed preparation; seeding and seed treatment methods; control of muddy water; control of seedling pathogens and insect pests; and optimising seedling nutrition.

(c) Agronomy and crop physiology

This objective aims to optimise the rice farming system through a better understanding of the physiology and agronomy of rice and other complementary crops in the rice rotation.

The information and management practices resulting will lead to optimisation of crop inputs, ideally based on objective management systems, for improved yield and quality.

(d) Crop nutrition

This objective will develop crop nutrition strategies to optimise yield and quality. The program will focus on both macro and micro nutrients required for healthy crops and food products.

Emphasis will be placed on predicting optimum nutrient application (amount and timing) through objective soil and tissue testing as well as identifying management to improve inherent soil fertility and plant response to nutrient availability.

(e) Crop protection

This objective aims to develop integrated weed control and pest management strategies for the rice industry that are both efficacious and environmentally sustainable. Major weeds include Barnyard Dirty Dora, Starfruit, Alisma, Water Couch, and Silvertop.

Major pests include bloodworm, aquatic worms, leaf miner, aquatic snails, armyworm, and waterfowl (especially ducks).

(f) Sustainable farming systems

This objective will enhance the use of natural resources (land and water) for sustainable rice production.

It will focus on reducing groundwater accessions from rice growing, maintain and improve the quality of surface drainage water from rice, address salinisation and acidification of ricegrowing soils, and maintain and improve soil physical and chemical structure for rice production.

(g) Technology transfer and human resource development

The industry has been very successful in achieving rapid adoption of new technology because of its vertical integration and the close links between growers and the providers of rice extension services.

To ensure rapid adoption continues, the industry will place high priority on ensuring the governmentprovided extension services are of high quality and are not reduced, and that the efficiency and effectiveness of research, development and extension resource use is maintained and improved.

(h) Harvesting, storage, handling and transport

Harvesting, drying, storage, handling and transport processes impact on product quality and industry efficiency and therefore grower returns.

Ongoing R&D effort will be made in this area by staff of Ricegrowers' Cooperative Limited and, where necessary, by external agencies.

(1) Milling and processing

This objective aims to improve milling and processing operations that will add value to product and increase grower returns.

Ongoing R&D effort will be made by the staff of Ricegrowers' Cooperative Limited and external agencies where necessary

to improve whole grain millet, reduce low value milling fractions, and reduce offcoloured and damaged grains.

(I) On-product research and development

Increasing the valueadded to paddy rice, and hence increased grower returns, relies on the development of new food products based on rice entirely, or rice in mixtures with other foodstuffs. Both 'basic' and 'applied' research will be necessary.

'Basic' research is concerned with completely characterising rice and its components with no inferred application of results to the marketing of rice.

Most of the 'basic' research required will be carried out by various tertiary and specialist institutions due to the high costs and to the specialist equipment and staff required.

Applied onproduct research will be carried out by Ricegrowers' Cooperative Limited staff and external agencies where required.

For commercial reasons, specific priorities are not detailed in this plan, but they deal with the development of new and novel food and industrial products.

The matrix on the next page indicates how the key issues will be addressed by the research objectives.

Resources and allocation

The resources available to the rice R&D program are raised from the levy on rice production, combined with the Commonwealth contribution in accord with the Primary Industries and Energy Research and Development Act.

Tonnes of rice produced and the farmgate value are major variables, but around $2 million will be raised in most years.

Resource allocation has traditionally favoured projects meeting production efficiency objectives. As stated previously, sustainability R&D is funded from a variety of other sources and rice receival, storage, processing and product development R&D is carried out largely by Ricegrowers' Cooperative Limited for commercial reasons.

While it is sensible to maximise funding allocation in areas where other sources of funds are not available, the Rice R&D Committee will take a holistic approach to ensure all key issues are covered.