Rural Industries Research & Development Corporation

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Program 4
Future Agricultural Systems

• Global Competitiveness
• Resilient Agricultural Systems
• Human Capital, Communications & Information Systems

Objective: To identify key generic cross-sectoral issues confronting the rural sector and devise appropriate R&D programs that will benefit the sector and the nation.

Expenditure in 2000/2001:  $3,569,772
Compared with 1999/2000: $3,895,412

Our R&D Plan which runs until 30 June 2002 has the following performance indicators for Program 4. Some key performance achievements in 2000/2001 were as follows:
 

Program 4 Future Agricultural Systems	Performance in 2000/2001
4.1 Global Competitiveness We measured our  success by:

Establishing an R&D plan that addresses the needs of stakeholders	· The key R&D strategies have been identified via the Corporation’s strategic planning process. The needs of stakeholders are currently being met through the incorporation of steering committees in most projects.
Developing options and strategies that identify new opportunities in the marketplace and in particular, contribute effectively to the Government’s Supermarket to Asia initiative	· A major effort has been developed which is closely linked to the Government’s Supermarket to Asia initiative. This involves production of a major book which aims to identify new opportunities for the Australian food sector from a resurgent Asian market.
Identifying options and strategies for reducing trade barriers and domestic policy impediments for Australian agriculture	· A continued major effort has been devoted to development of reports, which analyse important aspects of the international trade policy environment. These have made a significant contribution to Australia’s efforts leading up to the WTO trade negotiation rounds.
Improving linkages between producers, consumers and providers of agribusiness goods and services	· Reports have been produced which have looked at: the importance of foreign ownership on the export performance of the food and fibre sector; international trends in the structure of agricultural cooperatives; and building partnerships and alliances in international food agribusiness through supply chain management.

 

Program 4 Future Agricultural Systems	Performance in 2000/2001
Research project outcomes that have enhanced export performance and culture and resulted in the removal of impediments to effective trade with Asia in the food sector	· Reports are being finalised which will provide important insights into wholesale market structures for food in China and the implications of this for Australian exporters.  · A project which is looking at developments in the Japanese food market and implications for Australian food processors.
Identifying new policies or institutional arrangements which will improve Australia’s global competitiveness	· Reports have been produced which consider the implications for agriculture’s competitiveness of: occupational licensing; market power in the food retailing and wholesaling sectors; and changes in the regulatory pricing process for infrastructure services to rural areas.
Our ability to demonstrate that average benefit–cost ratios of 10 and/or internal rates of return greater than 25 per cent can be achieved for R&D projects	· A major benefit/cost study of the Future Agricultural Systems program was undertaken in 2000/2001. This assessed in detail the nine trade policy projects which have been funded during the past four years. The study showed that this research effort is likely to have generated a rate of return on the invested funds of 49% with a benefit cost ratio of 190:1. These are well above the target rates on 25% and 10:1 respectively.
4.2 Resilient Agricultural Systems We measured our success by:
The establishment of R&D plans that address the needs of stakeholders	· The program has a five-year Research and Development Plan that was released in June 1999.
The adoption level of results from our research projects	· Emphasis on adoption and market led demand is integral to the management of the program. Publication and promotion of findings are through the Resilient Agricultural Systems communication program
Pilot trial accredited sustainable production systems in a range of industries and regions	· Published a report on the multiple use of farmwater to produce fish. · A report evaluating the re-use potential of agri-industry wastes in the Melbourne/Metropolitan region identified some opportunities particularly using by-products from food processing such as potato peelings.
Analytical processes for conceptualising/ developing new agricultural systems	· Published a report on grazing benchmarks and management in eastern Australia. Benchmarks measure the financial and ecological health of rural businesses on a regional basis in order to address property management issues in a holistic framework
The development of new agricultural systems	· Published a report on agriculture’s potential to supply raw materials for new nutraceutical, pharmaceutical and industrial products.
The development of adaptive responses and new opportunities for rural industries related to climate change and variability	· Published a report on weather and climate in farming. · Report on the application of rare earth elements to cereals showing a positive impact on physiology and productivity particularly when they are under stress of water shortage.

 
 

Program 4 Future Agricultural Systems	Performance in 2000/2001
Improved management of pest-related constraints and risks	· Finalised project on development of Metarhizium as a mycoinsecticide for controlling locusts and grasshoppers.
Safe use of biotechnology to improve profitability and sustainability	· Finalised a project reviewing the farm and resource management issues relating to genetically modified plants. · Undertook a project on detoxifying pyrethroid insecticides with gene/enzyme systems.
The identification of policies and institutions that are more responsive to the needs of sustainable and profitable agricultural systems	· Continued to support the development of environmental management systems (EMS). Convened a workshop of RD’s and researchers on EMS to improve understanding of the scope of current research into environmental management systems in Australia, and awareness of collaboration opportunities between researchers.
Our ability to demonstrate that average benefit–cost ratios of 10 and/or internal rates of return greater than 25 per cent can be achieved for R&D projects	· A major benefit-cost study was conducted in 2000-2001. Projects from the Resilient Agricultural Systems Sub-program that were reviewed included two projects on environmental management systems and five projects contributing to Rainman, a climate forecasting system. The EMS projects were assessed as having a benefit-cost ratio of 6.5:1 and an internal rate of return of 34 per cent. The Rainman projects had a benefit cost ratio of 6.7:1 and an internal rate of return of 29 per cent. In both cases these are above the target rates of return for the program of 25 per cent, although they are both below the target benefit-cost ratio of 10:1.
4.3 Human Capital, Communications and Information Systems We measured our success by:
The establishment of R&D plans that address the needs of stakeholders	· A new Five Year Strategic Plan has been drafted for the Farm Health and Safety component of the program following a workshop of stakeholders. · A new R&D work plan is being developed for the cooperative venture on Innovating and Developing Human Capacity in Rural Industries.
The adoption level of results from our research projects	· A number of the sub-program outputs have been released in a form aimed at improving their accessibility and uptake eg through the use of guideline booklets and websites. · High demand for the Kit for Small Town Renewal.
The increased use of the Internet and other new information and communication systems by farmers to improve farm management	· Production of a CD-ROM of Prime Notes for agricultural extension. · Use of a satellite fire monitoring program by landholders in rural northern Australia · Publication of a report on assessment of the demand for on-line services in rural Australia and the infrastructure available to support this demand. · Creation of networks by FM500 members using the Internet. · Release of a report and workshop proceedings on E-commerce case studies.
Improved communication between end users (including farmers) and researchers	· Publication of a report on stock and station agents as information providers. · Release of a prospectus for and development of a cooperative venture in innovating and developing human capacity in rural industries. · Release of a manual and tools for participatory R&D in dryland cropping areas.
The increased responsiveness of policies and institutions involved in agricultural education and communication	· Publication of a report on agriculture courses, focusing on student entry and exit attributes and industry needs.
Better practices for farm health and safety	· Publication of a report on new ways of promoting farm health and safety through analysing farmers’ perception of risk. · A successful pilot project of a creative health initiative to reduce Type 2 diabetes in rural men. · A comprehensive report on The Health and Safety of Australia's Farming Community
Up to three new rural leaders trained per year and contributing to RIRDC industries	· Two scholarships awarded for participation in the Australian Rural Leadership Program. · Continued support for leadership training via the Rural Women's Award and rural youth award, Heywire.
Up to five research post-graduates per year contribute to RIRDC industries	· Three new scholarships awarded for PhD studies in RIRDC related areas of study.
Our ability to demonstrate that average benefit–cost ratios of 10 and/or internal rates of return greater than 25 per cent can be achieved for R&D projects	· A major benefit cost study was undertaken in 2000/2001. Three projects targeting tractor and utility seats and back pain were assessed as having a benefit cost ratio of 16.4:1 and an internal rate of return of 38 per cent. These are well above the target rates of 10:1 and 25 per cent respectively.

Investment Priorities for Sub–programs of Program 4

4.1 Global Competitiveness

Objective: To identify important impediments to the development of a globally competitive Australian agricultural sector and support research that will lead to options and strategies that will remove these
impediments.

Expenditure in 2000/2001: $653,300
Compared with 1999/2000: $700,892

Some Key Performance Indicators
Extent of improvement in export activities by the agricultural sector and associated enterprises.
Change in national and international policies influencing the competitiveness of the agricultural sector.
Extent of achievement of average benefit-cost ratios of 10:0 and/or internal rates of return greater than 25% of R&D projects.

- RIRDC R&D Plan 2000–2002

Background

International trade liberalisation and the general globalisation of the world economy during the past two decades has meant that all countries have had to focus attention on ensuring that their industries are globally competitive.

Many studies have highlighted the substantial benefits to the world that can be gained from trade liberalisation. Some have shown that the Australian agricultural sector in particular stands to gain billions of dollars in welfare gains from this process.

As well as being actively involved at an international level, through trade policy changes, for Australia to maximise the gains from globalisation it is crucial to ensure that domestic policies and processes are continually reviewed and effectively adapted.

While evidence of the longer-term gains from globalisation is clear, the processes involved in achieving them can often be complex and difficult to understand. They will, in many cases, present challenges that many businesses and community groups are not familiar with. They also require access to information and business institutional arrangements and practices, which many businesses have not been accustomed to in the past.

RIRDC believes that research can provide improved understanding in many areas, domestically and internationally, that will support the process of globalisation and ensure that the benefits from it are maximised and the difficulties associated with the change minimised. It believes that the nature of much of the research related to understanding the processes for the change has public good characteristics and therefore will not necessarily be undertaken if left to the private sector.

Strategies

Support analyses identifying new opportunities in the marketplace. Develop collaborative links with the Government’s ‘Supermarket to Asia’ initiative. Develop a research program supporting the development of a more globally focused competitive food sector.

Support analyses focusing on domestic impediments to industry performance, thereby enhancing export performance and an export culture, particularly in those industries, which have had a domestic focus.

Develop options and strategies improving global competitiveness of the agricultural sector by improving the current set of trade policies and therefore removing existing trade barriers.

Develop a better understanding of domestic and international markets for agricultural products when there is a clearly established market failure in the provision of such information.

Support analyses of the linkages between various stages in the producer to consumer chain and identify areas - regionally, domestically and internationally - where these linkages can be better integrated and their efficiency improved.

Evaluate other existing and alternative policies and institutions affecting the development of a globally competitive agricultural sector.

Key outputs in 2000/2001 A major book that updated information on the potential for resurgence of agribusiness in Asian markets and the implications for Australian businesses.

A series of research reports on crucial issues, which have supported several meetings aimed at progressing the next WTO round of trade policy reform negotiations. For example, the WTO meeting in Seattle and the Cairns Group meeting in Banff.

Reports on a range of domestic impediments that are potentially hindering the efficient development of agricultural industries. These included: an assessment of market power in the food processing and retailing chain; an assessment of the implications of professional regulations; analysis of trends in foreign investment in the agri-food sector and implications for exports; and an analysis of developments in the provision and pricing of infrastructure to regional Australia.

Reports on a range of institutional structures, which can have an impact on the competitiveness of the agricultural sector. These included: trends domestically and internationally in co-operative structures; and the implications of changes equity and credit financing for the rural sector.

Publications in 2000/2001

01/07	Reforming Domestic Agricultural Support Policies through the World Trade Organisation
01/057	Infrastructure Regulation – Cost methodologies and processes
01/31	Supply chain management – building partnerships and alliances in international food agribusiness
01/06	International Trends in the Structure of Agricultural Cooperatives
00/176	Improving Japanese agricultural trade policies – issues, options and strategies
00/159	Professional regulation: as impact on rural Australia
00/150	Market Power in the Australian food chain: Towards a research agenda
00/124	Solving the Problem – Banff 2000: The Political economics of agricultural reform
00/113	Foreign Investment in Australian Food and Fibre
00/94	Global Competitiveness Research in Progress 2000

Research Manager: Dr Jeff Davis

Phone:	(02) 6272 4152
Fax:	(02) 6272 5877
Email:	jeffd@rirdc.gov.au

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4.2 Resilient Agricultural Systems

Objective: To enable agricultural production systems that have sufficient diversity, flexibility and robustness to be resilient and respond to challenges and opportunities.

Expenditure in 2000/2001: $990,627
Compared with 1999/2000: $1,449,750

Some Key Performance Indicators

Number of accredited sustainable production systems being trialed.

• Extent of improvement in management of pest-related constraints and risks.
• Extent of safe use of biotechnology to improve profitability and sustainability.
• Extent of achievement of average benefit-cost ratios of 10:0 and/or internal rates of return greater than 25% for R&D projects.

- Resilient Agricultural Systems R&D Plan 1999–2004

Background

This program sponsors research and development into ways that farm based agribusiness systems can be developed and/or made both sustainable and more profitable. Resilient Agricultural Systems aims to make agricultural systems more resilient and at the same time develop commercial opportunities. As a sub-program of RIRDC’s Future Agricultural Systems Program it supports biophysically-based systems, thereby complementing the trade and human capital foci of the other two sub-programs.

Over past decades, Australian farmers have responded to Australia's declining terms of trade for many rural products by reducing costs and increasing productivity. Yet there are physical and environmental limits to the capacity of Australia's natural resources to do so - particularly in drought.

The key trends impacting on Australia’s rural industries include:

• A shift from a production-driven approach to a market-driven approach including demands by consumers for product consistency, reliability of supply, food safety, product choice, sustainability of production and most recently accreditation of production systems.
• Concern for the environment, especially the issues of water quality and quantity, soil salinity, acidification and degradation, air quality and climate change.
• Increased globalisation resulting in greater competition and growing power of transnational companies especially in food industry research, processing and marketing.
• Reduced government involvement in agriculture and rural services and increased privatisation — this includes resourcing of research.
• New technologies including a trend to patented input systems including genetic manipulation of plants and animals, precision farming and information management.
• The intensification of agriculture resulting in development of industrialised systems with increased vertical integration, a systems approach to agri-industries and implementation of industry-wide quality assurance.
• Reduction in the number of mainstream commercial farms, increasing farm size, a rise in the number of part-time farmers and significant ongoing structural adjustment in agriculture.
• Threats to the economic, social and environmental sustainability of rural and regional communities, resulting in quests to develop new businesses and ways of doing business.

Strategies

• Develop new agricultural production opportunities that are more compatible with Australia’s fragile soils and difficult climatic conditions. Assist Australian agriculture, business and policy makers to develop new agricultural industries to utilise saline land.
• Consider alternative land tenure arrangements, improved financial systems, and alternative capital structures that could address impediments to achieving sustainable agri-industry systems of critical business size.
• Identify the implications of new technology systems for agri-industry such as precision farming and genetic engineering of plants and animals.
• Provide the R&D base to underpin the development of internationally acceptable accreditation systems for sustainable agricultural production, environment management and new agri-industry systems.

This sub-program has its own five-year R&D plan, which is accessible in hardcopy and on the Internet at www.rirdc.gov.au/pub/ras5yr.htm

Key outputs in 2000/2001

• A review of agriculture’s potential to provide pharmaceuticals, nutraceuticals and industrial products.
• A report on the potential benefits of rare earths to agriculture.
• Development of a scientifically backed and operationally feasible management plan for addressing incursions of selected grouping of agricultural pests.
• Identification of biological control agents for Serrated Tussock to the stage where they can be introduced into quarantine in Australia. Investigation of the specificity of these pathogens against key Australian native and agricultural grasses.
• A report on the utilisation of wastes from agri-industries in the Melbourne/Metropolitan region by identifying, characterising and developing them as resources.

Publications in 2000/2001

01/35	Grazing Benchmarks and Management (in eastern Australian)
01/36	Development of routing DNA based diagnostic tests for Phytophthora
01/03	Nematodes as biocontrol agents of helicid snails
01/27	Biological Control of Serrated Tussock and Chilean Needle Grass
00/182	Multiple use of farmwater to produce fish
00/190	Control of Locusts and Grasshoppers – Metarhizium as a Mycoinsectide
00/173	New pharmaceutical, nutraceutical and industrial products – the potential for Australian agriculture
00/95	Resilient Agricultural Systems Research in Progress 2000
00/77	Weather and Climate in Farming
00/133	The New Rural Industries Financial Indicators Volume 2

Research Manager: Dr George Wilson

Phone:	(02) 6281 2160
Fax:	(02) 6272 5877
Email:	gwilson@awt.com.au

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4.3 Human Capital, Communications and Information Systems

Objective: To enhance human capital and facilitate innovation in rural industries and communities.

Expenditure in 2000/2001: $1,925,846
Compared with 1999/2000: $1,744,770

Some Key Performance Indicators

• Level of use of the Internet and other new information and communication systems by farmers to improve farm management.
• Extent of communication between end users (including farmers) and researchers.
• Number of better-practice guides issued for farm health and safety.
• Number of new rural leaders trained per year contributing to RIRDC-related industries.
• Number of research postgraduates per year contributing to RIRDC-related industries.
• Extent of achievement of average benefit-cost ratios of 10:0 and/or internal rates of return greater than 25% for R&D projects.

- RIRDC R&D Plan 2000–2002

Background

In the past, significant productivity gains in agriculture were achieved by adopting new technical products or processes. Today productivity growth requires the adoption of a range of new skills and activities in addition to new production technologies. Growth now involves investing in human skills and education, analysing and using information, developing quality systems, marketing products, financial, technical and personnel management and adapting the institutional organisation and structure of the industry. Links between farmers and the regional society in which they live are also important to the continuing development of vibrant rural communities.

The current era is known as the information age. In OECD countries, the information sector accounts for one-third to one-half of gross domestic product and of employment. Information and the skills, knowledge and systems to apply it to management are required for Australia’s rural industries to become more innovative. Innovation is necessary in order to maintain a competitive edge in today’s global markets. The better the quality of information and the more targeted and accessible it is to appropriately skilled farmers, the more successful the agricultural sector will be.

This program focuses on developing effective, accessible, client-centred information, communication and education systems and processes. It will fund underpinning R&D which will enhance the capacity of farm managers to identify, acquire and apply the skills and information needed to improve the performance of their farm businesses both in terms of profitability and sustainability.

The program also aims to enhance human capital available to rural industries through improved practices for farm health and safety, research related to social issues in rural communities and households and the provision of scholarships for rural leadership and postgraduate research.

Strategies

• Develop electronic communication systems with emphasis on responsiveness to farmers’ needs.
• Further investigate farmer education and training, particularly delivery mechanisms and the links between formal and informal sectors.
• Investigate rural social issues and issues relating to rural communities both in towns and on farms.
• Evaluate existing and alternative policies and institutions affecting the development of a more innovative rural sector.
• Support farm occupational health and safety research focusing on improved uptake mechanisms, data, hazard profiles for each commodity group and design.
• Develop research and leadership capabilities through postgraduate scholarships, support for the Australian Rural Leadership Program and support for strengthening the role and profile of rural women.

Key outputs in 2000/2001

Electronic Communications Systems

• A CD ROM of Prime Notes for Agricultural Extension.
• A report on the assessment of the demand for online services in rural Australia and the infrastructure available to support this demand.
• A report and workshop on e-commerce case studies.

Extension, education and training

Release of prospectus for a cooperative venture in Innovating and Developing Human Capacity in Rural Industries.

A report on control, innovation and strategy in farming.

Rural communities and social issues A report on what motivates rural men to improve their health status. Farm health and safety

• Establishment of the Managing Farm Safety course delivery system.
• A priority-setting workshop on agricultural pesticides and human health in Australia.
• A report on farm-related fatalities in Australia.
• A report on rural injury in central Queensland.
• A report on The Health and Safety of Australia’s Farming Community.

Leadership

• Awarded two scholarships for participation in the Australian Rural Leadership Program.
• Awarded seven bursaries in the Rural Women’s Awards.
• Identified gaps in future leadership development needs in rural and regional Australia.

Scholarships Awarded three new scholarships for PhD studies in RIRDC-related areas of study. Publications in 2000/2001

01/16	FM 500: Global networks and adoption of the web
00/138	New ways of promoting farm health & safety
00/185	E-commerce in Rural Areas – Case Studies and Workshops
00/177	Unmet demand for online services in rural Australia
00/149	The New Environment for Agriculture - Fostering the relationship between private and public extension
00/157	What motivates rural men to improve their health status?
00/147	Connecting the Country
00/132	A manual of tools for participatory R&D in dryland cropping areas
00/131	Determinants of Australian Family Farm Growth
00/138	New ways of promoting farm health and safety through analysing farmers’ perceptions of risk
00/130	Rural Communities and Rural Social Issues: Priorities for Research
00/127	Stock and Station Agents as Information Providers
00/104	Agriculture Courses: Student Entry and Exit Attributes and Industry Needs (SR83)
00/99	Agricultural Statistics – Needs, Benefits, Costs
00/180	The safe use of farm chemicals by market gardeners of non-English speaking background
00/96	Human Capital, Communications & Information Systems Research in Progress 2000
S00/022	Liability Law – Impact on Research and Development
S00/080	Farmers conduct ‘virtual experiments’ on the internet
S00/101	Fatalities on Australian Farms 1989-1992

Research Manager: Dr Roslyn Prinsley

Phone:	(02) 6272 4033
Fax:	(02) 6272 5877
Email:	roslynp@rirdc.gov.au

Contact for RIRDC Scholarships:

Mr Claudio Ciuffetelli
Manager, Business & Finance
 

Phone:	(02) 6272 4656
Fax: Email:	(02) 6272 5877 claudioc@rirdc.gov.au

Contact for Australian Rural Leadership Program:

Mr John Quantrill

Phone:	(02) 6281 0680
Fax:	(02) 6285 4676
Email:	arlp@iacom.com.au

Contact for Rural Women’s Award:

Ms Edwina Clowes

Phone:	(07) 5476 1211
Fax:	(07) 5476 1311
Email:	Clowesedwina@bigpond.com

Next Steps
Our program for 2001/2002 is captured in our Annual Operational Plan that was approved by the Federal Government in June 2001. This Plan is based on an annual investment of around $25 million put into the key R&D issues identified by the Corporation and its key stakeholders. These funds will go to more than 600 projects across a wide range of rural industries. This is our core business and will continue to be our essential focus in 2001/2002.

Within that broad statement, there are a number of specific initiatives that we will take towards a more profitable and sustainable rural sector.

• Holding a major conference in August on Organic Agriculture and its potential for contributing to more sustainable farming practices.
• Development of a stronger group of rural leaders via our funding in the Australian Rural Leadership Foundation, the Nuffield Foundation and the Rural Women's Awards.
• Continued promotion of the results of our research findings via newsletters, short reports, publications and further development of our website.
• Consolidated information on production post harvest handling and markets for a range of asian foods.
• A better understanding of agroforestry systems for low to medium rainfall areas and better genetic material for these areas.
• Improved mechanisms for extracting greater value from venison co-products and velvet antler.
• Identification of successful weed management practices for organic production systems.
• A range of reports that highlight the medical qualities of tea tree oil in areas such as inflammation and microbial activity
• The development of new wildflowers that can be evaluated by growers and a better information base on the value/volume of wildflower exports.
• Finalisation and publication of a report on the status of the poultry flock with regard to Newcastle Disease.
• Development of a generic, national environmental management system for Australian chicken meat farms.
• Provision of data on the nutritional value for poultry of a wide range of feed ingredients through the Australasian Livestock Feed Ingredient (ALFI) database.
• 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.
• New mechanisms to detect queen bees in managed hives.
• Further development of the glycemic index of honey so that it can be used to provide advice for the use of honey by diabetics.
• Publication of handbook on equine exotic diseases.
• Discussion paper on new genetic technologies and their significance to the Australian equine industry.
• Commercialisation of new oaten hay varieties and a new microbial inoculant for hay preservation.
• 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.
• A series of reports highlighting agricultural trade policy reform, their implications and use to support WTO trade negotiation developments.
• Commercialisation of Distichlis for rehabilitation of highly saline areas for grain, turf, and grazing.
• A farmers’ guide to the use of e-commerce in agriculture.

These are some of the initiatives that will be undertaken in 2001/2002. They all come from different angles but all are focused on one central outcome — a more profitable, dynamic and sustainable rural sector.

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