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Operational Report

Portfolio Structure for 2006-07 Reporting Framework Portfolio 1-New Industries Overview New Plant Products New Animal Products Asian Foods Essential Oils and Plant Extracts Rare Natural Animal Fibres Wildflowers and Native Plants Tea Tree Oil Portfolio 2-Established Industries Overview Chicken Meat Honeybee Rice Horses Fodder Crops Pasture Seeds Deer Buffalo

Portfolio 3-National Rural Issues Overview Agroforestry, Farm Forestry and JVAP Environment and Farm Management Rangeland and Wildlife Systems Organic Systems Global Competitiveness Food Integrity and Biosecur'ity Human Capital, Communications and Information Systems

RIRDC's Portfolio Structure 2006 07

 

RIRDC's Reporting Framework

 

Portfolio Overview

Portfolio 1 - New Industries

General Manager:
Dr Roslyn Prinsley
Ph: 02 6271 4120
Fax: 02 6271 4199
roslyn.prinsley@rirdc.gov.au

Portfolio Goal:
Develop new opportunities.

Portfolio Output:
To achieve a more diverse rural sector through development of new agricultural and related industries.

Portfolio Outcome:
Improved prospects and opportunities for diversification through the development of new industries in rural and regional Australia.

Overall Outcome:
To facilitate a more profitable, dynamic and sustainable rural sector.

Inputs:
Budgeted funds of $5.2m (including research expenditure of $.5m). This was financed principally through Commonwealth appropriation funds but there are also some voluntary and statutory industry contributions.

Total Expenditure
2006-07: $5.2m 2005-06: $5.9m

Background
New and emerging rural industries bring opportunity, diversity and resilience to rural Australia. Innovative diversification options are vital for Australia's rural sector as it faces ongoing structural change driven by declining terms of trade, distorted global markets and pressures on its natural resource base into new industries. Diversification is also a key to capturing opportunity. New industries provide farmers with new markets to meet changing food and fibre fashions, new medicinal and nutraceutical products and new approaches to environmentally sustainable farming.

From 1977 to 1997, the proportion of gross agricultural output arising from traditional major commodities fell from over 75% to 59%. More than 60% of farmers now have multiple enterprises, accounting for in excess of 70% of the value of agricultural output. New industries are increasingly important in Australian agriculture. They have a significant role in propelling rural economies toward their potential in this new century. Encouraging rural entrepreneurship is a key route to successful sustainable thriving communities and environmental management. Rural landscapes in Australia are also changing with almost 16.6 million hectares managed by small and lifestyle landowners. Many of these derive much of their income from non farming activities. This can reduce their financial risk in developing a new industry that may not yield immediate profits. These farmers generally manage relatively high value and highly productive land. Many are interested in exploring opportunities for new and emerging industries. Clients for new and emerging industry research include traditional farmers endeavouring to diversify, and small lifestyle landowners or entrepreneurs looking to invest in a new industry.

In 2006-07, some of the new industries investigated included cocoa, red bayberries and green tea. Olives emerged as a highly prospective industry, and RIRDC worked closely with the Olive Industry to address key constraints and opportunities.

Challenges and Opportunities
Australian farmers have adopted many new 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, many will remain small niche industries. Others will fail, for new industry development is a risky business. New industries face similar challenges to established industries such as the achievement of suitable product quality and yields and compliance with food safety, quality control, occupational health and safety, and biosecurity requirements. However, they have considerably less resources to meet these requirements than do established industries. Unlike established industries, they also need to concurrently develop a cohesive industry organisation, new markets and supply chains. For example, in 2006-07, RIRDC worked closely with the Tea Tree Oil industry to finalise the submission of a safety dossier to meet regulatory requirements in the European Union.

RIRDC's challenge is to work with new industries to achieve their goals through research and development where appropriate.

In 2006-07 RIRDC:

• developed native perennial grasses for sustainable pasture systems
• provided technical guidelines for growers interested in production of several Asian vegetables, including edamame soybean, Prunus mume and taro
• developed best management practices for the herb and spice industry

• determined harvest timing, sensory analysis and shelf life for optimal olive oil quality
• tested new techniques for quality assurance of essential oils and medicinal plant extracts
• facilitated essential oil industry development through improved information flows
• assessed consumer preference for kangaroo meat
• continued selection and breeding for disease control in rabbits
• improved processing and value adding for alpaca fibre
• diversified options for regions and landowners
• conducted research to deliver more resilient farms and regions
• improved avenues for adoption of research results
• improved research capacity for new and emerging rural industries

Key R&D Issues in 2006-07

Understanding markets

• emerging tropical fruit wines

Investigating new products

• legumes with pharmaceutical and aquaculture feedstock potential

R&D along the value chain, including production, marketing, harvesting, processing, transport and storage

• increased oil yields through breeding of tea tree

Communication and adoption

• dissemination of research information and outputs included:
• the Essential Oils newsletter, the Asian Vegetables newsletter and the Tea Tree Oil R&D newsletter
• R&D symposia, presentations and stands at industry expos such as the Olives Expo
• research projects with growers.

New Plant Products

Research Manager
Mr John Oakeshott
Ph: 02 6271 4126 Fax:
02 6271 4199
john.oakeshott@rirdc.gov.au

Research Manager (Olives and Biofuels)
Dr Roslyn Prinsley
Ph: 02 6271 4120
Fax: 02 6271 4199
roslyn.prinsley@rirdc.gov.au

Research Manager (Native Foods)
Ms Alison Saunders
Ph: 02 6271 4124
Fax: 02 6272 4199
alison.saunders@rirdc.gov.au

Key performance indicators Objective
To facilitate the development of new industries based on plants or plant products that have commercial potential for Australia.

Strategic plan
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.

Source of funds
This program is funded from RIRDC core funds provided by the Australian Government. Preference has been given to project applications that are also supported by funds from industry sources.

Research expenditure
2006-;07: $1,461,245
2005-06: $1,475,046

• achievement of increased regional economic activity and improved rural risk management through crop diversification
• establishment of markets for new agricultural products in Australia and overseas
• acknowledgement by industry partners that research is market based
• effective strategic planning and prioritisation by industry bodies for development of research programs

Background:
RIRDC supports a diverse program of R&D within its charter of encouraging and assisting prospective industries that show evidence of being commercially viable. Industries are also supported so that they may contribute to regional development and to the national economy as a whole. ‘New industries'are defined as those which appear to have commercial potential but are not developed enough support through the work of other R&D bodies or do not attract levies or voluntary contributions at this stage. They include reexamination of crops/plants that have been tried but which now may have commercial potential due to changes in harvesting or processing technology or demand. The program has six components:

• native plant crops
• culinary herbs, spices and beverages
• extractive and fibre crops
• prospective fruit, vegetable and nut crops
• prospective grain and pulse crops
• miscellaneous crops and activities

Researching and testing new crops and their potential in the value chain as well as reexamining older plant species for current needs are seen as essential business by the Corporation. New crops increase the potential diversification of farming businesses both as a risk hedge and an environmental management tool.

Key outputs for 2006-07

• developed a high quality green tea product from the 2006-07 harvest although drought and frost reduced quantity
• developed a mechanised cocoa pod-splitter
• generated data allowing coffee growers access to a range of registered or permitted pesticides. This data includes information on chemicals suitable for use within Integrated Pest Management Systems and therefore enhances sustainability and environmental responsibility within the industry
• conducted an audit and study of alternative coffee processing techniques to generate information that can improve the quality of Australian coffee
• developed research on the efficacy of growing mustard seed (Brassica juncea) as an option for biodiesel
• collected data on watercress production and marketing in Australia for potential investors and growers
• investigated a cost-effective method of de-barking guayule which could help the industry to commercially produce a non-allergenic rubber
• provided research on food safety, and use and nutritional information to Food Standards Australia New Zealand (FSANZ) to obtain ‘traditional food status'
• published The Natural Chemistry of Australian Extra Virgin Olive Oil in four languages-English, Spanish, Traditional Chinese and Simplified Chinese
• examined, and called for more information to be provided for research into EMS and quality assurance systems for olive management
• analysed hazelnut quality and yield results from five medium term (>10 years) field sites containing 25 hazelnut varieties to develop recommendations that will facilitate the early decision process for the long-term development of the Australian hazelnut industry
• conducted a marketing study on camelina oil, mustard seed and golden linseed as potential alternative oilseeds for biodiesel
• continued research into collating information for a herbs and spices best management practices manual which will also include information to assist in developing an Integrated Pest Management program for the industry

Key outcomes for 2006-07

• utilisation, within the industry, of a mechanised cocoa pod-splitter that was developed to greatly reduce labour costs
• conducted successful small scale cocoa production trials in the Queensland Wet Tropics which have encouraged stakeholders and new growers to invest in establishing larger commercial grower trials
• determined that phytomining to extract precious metals should be further investigated
• enhanced sustainability and environmental responsibility within the coffee industry by providing and encouraging the use of data on registered or permitted pesticides
• produced information for Australian coffee growers to modify their processing factories which will help them produce better quality coffee
• produced and extracted oil from 50 tonnes of mustard seed to be evaluated in field station vehicles as an option for biodiesel
• obtained‘traditional food status', for native foods, from Food Standards Australia New Zealand forming the basis of information for compliance with international standards
• industry uptake of The Natural Chemistry of Australian Extra Virgin Olive Oil to gain international market access for Australian produced olive oil
• improved understanding of the chemistry, taste and health attributes of Australian extra virgin olive oil

Publications in 2006-07

Tea tree oil safety dossier
RIRDC has been working closely with the Australian tea tree oil industry for more than a decade on the efficacy, safety and production of tea tree oil.

Many research reports have now demonstrated tea tree oil's effectiveness as an antibacterial, antiviral and anti-inflammatory agent.

More recently, the Australian Tea Tree Oil Industry Association and RIRDC have worked closely together to develop a comprehensive safety dossier for tea tree oil. This dossier has now been submitted by industry to the Scientific Community on Consumer Products (SCCP) in Europe. It included reports on:

• a comprehensive literature review of the toxicology of tea tree oil
• stability of packaged tea tree oil
• p-cymene and peroxides as indicators of oxidation in tea tree oil
• in vitro human skin penetration of tea tree oil
• potential mutagenicity of tea tree oil
• skin sensitisation

New Animal Products

Research Manager
Dr Peter McInnes
Ph: 08 8556 7441
Fax: 08 8556 7289
mcinnes2@comstech.com

Objective:
To accelerate the development of viable new animal industries.

Strategic plan
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 and at http://www.rirdc. gov.au/pub/KangarooIndustryPlan2005-10.pdf

Source of funds
This program is funded essentially from RIRDC core funds provided by the Australian Government. Preference has been given to project applications that are also supported by funds from industry sources.

Kangaroo R&D is funded from this program from statutory levies plus Commonwealth contributions.

Research expenditure
2006-07: $1,257,944
2005-06: $1,224,884

Key performance indicators

• growth of new and viable animal industries for food and other products
• use and adoption of new industry research outputs to meet productivity and sustainability requirements
• identification and assessment of potential new industries
• development of workshops, through chain networks and international linkage

Background
There are more than 0 prospective and emerging animal-based industries for which RIRDC receives research proposals or inquiries regarding R&D funding. The annual value at the farm gate of livestock and products traded from these industries exceeds $220 million with approximately 50 per cent traded on export markets.

In 2006-07 the Corporation funded specific projects for 15 of these industries. Other projects have objectives covering a broad spectrum of species and their products such as skin, milk and meat. Research and development is also being undertaken along the value added chain. For the very small potential industries, initially R&D is directed to feasibility studies and/or the development of a business plan.

Funding continues on the 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 and witchety grubs. Other projects continue in farmed rabbit, ostrich, dairy goat, milking sheep and silk production.

Key outputs for 2006-07

• determined the chemical composition of selected meat cuts for many developing livestock industries using analyses accepted under the Australia New Zealand Food Standards Codes
• identified production stakeholders and production data in the milking sheep and dairy goat industries in Australia and reviewed manuals on production characteristics for these industries
• reviewed the consumer assessment and consumption of kangaroo meat and researched the potential use for human consumption of kangaroo meat in minces, pies and deli manufactured products
• obtained further responses in farmed rabbits via selected breeding for important economic traits such as litter size, daily live weight gain and resistance to some diseases
• determined improved management, nutrition and processing techniques in a model for an edible snail farming enterprise

Key outcomes for 2006-07

• increased export value of crocodile skins particularly in obtaining a greater percentage of highly graded skins
• completed assessment on meat traceability systems for developing livestock industries
• increased the size of leading rabbit enterprises and the meat value due to increasing demand being greater than supply
• increased the propagation of mulberry trees, and the utilisation of new strains of silk worms improving quality and value of production

Collaboration

• RIRDC undertook extended national research with establishments from the pheasant, duck, squab and ostrich industries who contributed stock and facilities to identify and address reproductive wastage, genetic value and alternative feeding systems within those industries

Publications in 20060-07

06/06	2006 Research in Progress-New Animal Products
06/109	A Feasibility Study into the Commercialisation of Witchetty Grubs
07/06	Composition of New Meats: Analysis and nutrient of innovative meat industries
07/089	Export Markets for Skins and Leather—For Australia's camel, emu and goat industries
-	Farmed Rabbit Industry Association Newsletter
06/10	Free-range Snail Farming in Australia
06/117	New Animal Products: New uses and markets for co/by-products of crocodile, emu, goat, kangaroo
	and rabbit
06/05	Storage of Ostrich Skin

Asian Foods

Research Manager
Mr John Oakeshott
Ph: 02 6271 4126
Fax: 02 6271 4199
john.oakeshott@rirdc.gov.au

Objective:
A prosperous competitive Asian food industry in Australia, exporting to Asian markets and replacing imports in the Australian market.

Strategic plan
This program has a five-year R&D plan which is accessible in hard-copy from RIRDC and at http://www.rirdc.gov.au/ programs/af.html.

Source of funds
This program is funded from RIRDC core funds provided by the Australian Government. However, some proposals could be funded jointly by RIRDC and Horticulture Australia Limited. Preference has been given to project applications which are also supported by funds from industry sources.

Research expenditure
2006–07: $468,021
2005–06: $534 ,360

Key performance indicators

• consumer research data capable of driving grower production decisions
• number of new markets served by Australian production
• increase in volume into existing markets
• number of active grower groups
• evidence that growers and others in the value chain are changing their practices in response to available knowledge
• supermarket survey results indicating an improvement in reliability of supplies and produce quality
• number of new, highly prospective products identified

Background
The Australian Asian vegetable industry is a dynamic, growing horticultural sector whose products appeal to Australian consumers. Australian Asian vegetable production value and grower numbers more than doubled in the period 199 to 2001. Asian vegetables have also doubled their share of total Australian horticultural production.

Recently the domestic market has been an important driver of growth. Exports have also grown, but the share of production that is exported has declined recently as production has grown and competition from China, Vietnam and New Zealand has increased.

Growth in processed Asian food products has been slower, reflecting constraints such as relatively high labour costs, the lack of brand name appeal and shortcomings in marketing expertise.

With consistent nomenclature, dietary and functional food quality research and product promotion, Asian vegetables have the capacity to be recognised by the Australian population as a major fresh produce retail category.

Exporting of fresh Asian vegetables will continue to be very competitive and best returns will be achieved by a whole chain approach for boutique products that bypasses Asian central markets.

Key outputs in 2006-07

• published a report on growing edamame soybean in Australia
• produced research on the production potential of Japanese apricot (Prunus mume) in Australia
• released a report on anti-cancer properties of a range of Asian crucifers, particularly daikon sprouts which may have up to five times the potency of broccoli sprouts
• continued investigation into taro production in Northern Australia which will include information collected from a strategic planning workshop to be held in 2007-08
• produced ten issues of the Asian Foods Newsletter which is published in four languages English, Vietnamese, Cambodian and Chinese
• conducted a literary review into Chinese medicines and the health benefits of plant products highlighting the potential to examine the agronomy of two or three medicinal plant species
• published technical guidelines on supply chains that demonstrated optimal handling and management practices when distributing Asian vegetables from the Northern Territory to southern States of Australia

Key outcomes in 2006-07

• produced good quality edamame by using an adapted cultivar in good agronomic conditions
• demonstrated that the best investment prospects for an Australian mume industry is via commercial collaboration between orchardists and Australian-based manufacturers of the Japanese plum wine (umeshu) who have supply outlets in Australia and Japan
• targeted dissemination of the monthly produced Asian Foods Newsletter to more than 700 industry participants
• demonstrated that proper handling and distribution methods will assist the rapidly growing Asian vegetable industry when shipping produce from the Northern Territory to southern Australian states
• delivered social and educational outcomes to Asian growers through employing a bilingual extension officer. Benchmarking at the start and finish of the exercise demonstrated the project's success

Publications in 200607

06/06	Asian Foods Research in Progress
07/05	Development of Prunus mume—A new tree crop for Australia
06/101	Development of Taro, Yam, Yambean and Sweet Potato Exports to Japan and USA
06/128	Health-promoting, Plant-based Products Identified Through Traditional Chinese Knowledge
06/085	Production and Marketing of Tasmanian Wasabi
06/019	Taro Production Mechanisation and Industry Development
06/128	The Health Benefits of Traditional Chinese Plant Medicines: Weighing the Scientific Evidence

Essential Oils and Plant Extracts

Research Manager
Dr Roslyn Prinsley
Ph: 02 6271 4120
Fax: 02 6271 4199
roslyn.prinsley@rirdc.gov.au

Objective:
To support the growth of a profitable and sustainable essential oils and natural plant extracts industry in Australia.

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

Source of funds
This program is funded from RIRDC core funds provided by the Australian Government. As the Corporation has been funding the program for more than three years, it expects that project applications are supported by at least 25 per cent of industry funds.

Research expenditure
2006–07: $326,690
2005–06: $243 ,420

Key performance indicators

• average industry oil yield per hectare
• availability of information for grower use
• availability of information on world production levels and trends
• extraction efficiencies
• levels of local production/ import substitution

Background
Essential oils are largely used in the food flavouring, cosmetics and fragrance industries but their use in aromatherapy and other health care areas is growing. Changing consumer preferences in favour of natural over synthetic substances have had a strong impact on pharmaceutical and cosmetic industries, which has translated into growing demand for essential oils and plant extracts.

There is increasing interest in essential oils in Australia and there are good opportunities for producing plant extracts from both native and exotic species. The current value of production of essential oils (excluding tea tree oil) is estimated to be approximately $10-11 million at the farm gate.

The Australian essential oils industry is made up of around 150 commercial producers, with production dominated by a few larger firms. Most essential oil production takes place in Tasmania, Victoria and New South Wales.

Medicinal herbs offer potential for Australian production of plant extracts. At present, about one-third of the 250 tonnes used each year is supplied from Australia.

Australia has a comparative advantage as a reliable supplier of clean, good quality, unique oils and extracts based on the use of high technology in both production and extraction. However, they must understand the needs of processors and meet well-defined quality parameters.

Key outputs in 2006-07

• developed management strategies to maximise the quality of Australian produced saffron
• identified and selected high yielding peppermint genotypes by using tip cuttings for propagation
• selected low camphor lavender clones for four commercial cultivars
• developed a strategy for producing French lavender oil conforming to the ISO standard
• finalised an extensive literature review of the plant Morinda citrifolia (noni) and its juice extract which identified the next steps in development of the production and processing systems for this new extract
• published a report providing an overview of the sandalwood industry and its research needs

Key outcomes in 2006-07

• improved flow of research information to industry
• convened a meeting of the essential oils and plant extracts industries where growers and processors discussed the importance of the need for growers to meet quality requirements for active ingredients
• published information providing new essential oil and plant extract options for growers including Agonis fragrans, astralagus and feverfew
• improved information dissemination through publishing the EOI newsletter.

Collaboration

• cash and in kind contributions were received from several companies involved to develop frontier technologies for the quality assurance of medicinal herbs.
• significant cash and in kind contributions were provided from the Natural Plant Extracts grower cooperative and the processor Essential Oils of Tasmania, to develop and communicate best practice production guidelines to growers.
• industry contributed to the development of improved processing practices for saffron

Publications in 2006-07

 
 

Rare Natural Animal Fibres

Research Manager
Dr Peter McInnes
Ph: 08 8556 7441
Fax: 08 8556 7289
mcinnes2@comstech.com

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

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

Source 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. The remaining funds come from RIRDC's core funds provided by the Australian Government. For that part of the program, preference has been given to project applications which are also supported by funds from industry sources.

Research expenditure
2006–07: $268,990
2005–06: $266,419

Key performance indicators

• improved reproduction techniques in alpaca
• improved genetics for cashmere goats
• adoption and utilisation of R&D results
• increased production benchmarking for angora goats

Background
The Program's main focus in on cashmere, mohair and 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 2005-06 was $2.825m. Compared to the previous year, in 2005-06 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 2005-06 cover many segments of the value chain, from production (alpaca, mohair, cashmere) to marketing (mohair).

Key outputs in 2006-07

• determined genetically-based resistance to major gastro-intestinal Helminth parasites in goats producing mohair and cashmere and the relationship of such resistance with major production traits
• assisted some angora goat enterprises by distributing for testing farm management strategies and financial planning
• improved semen collection methods in alpacas reliably and consistently producing quality semen and new sperm dilution and freezing techniques provided superior post-thaw survival
• continued evaluation of cashmere sires and using other techniques high yielding artificial insemination results were a feature

Key outcomes in 2006-07\

• progressed benchmarking information comparing angora goat enterprises with similar size wool enterprises with the latter returning in 2006-07 $510 for wool and the former $80 for mohair
• determined that selling mohair by Every Goat Tested classing failed to achieve a significant premium for the ultra fine fibre but with increased microns for small sale lines a premium of $1.80 occurred over the $7.80/kg for traditional classing
• successfully tested changes in the commercial scouring of alpaca fibre to obtain a higher yield product
• improved early processing methods for alpaca fibre scouring procedures
• developed methods to remove greater amounts of dirt, grease and suint which have resulted in reduction of scouring costs and improved topmaking, spinning and dyeing colouration

Collaboration

• cashmere and alpaca producers provided semen, fibre samples, farm facilities and performance records to identify superior genotypes and benchmark productivity characteristics

Publications in 2006-07

 
 
 

Wildflowers and Native Plants

Research Manager
Dr Roslyn Prinsley
Ph: 02 6271 4120
Fax: 02 6271 4199
roslyn.prinsley@rirdc.gov.au

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

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

Source of funds
This program is funded from RIRDC core funds provided by the Australian Government. As the Corporation has been funding the program for more than three years, it expects that project applications are supported by at least 25 per cent of industry funds.

Research expenditure
2006–07: $231,366
2005–06: $264,097

Key performance indicators

• availability and utilisation of market information
• proportion of production accounted for by cultivated flowers
• return per kilogram of product
• industry involvement in product development
• availability of user-friendly production information, including return on investment data
• support for industry-driven training, workshops and networking

Background
Wildflowers (native to Australia) and Proteas constitute a substantial small agricultural industry with recent estimates putting the value of production at about $65 million a year. Several hundred small growers and a few larger growers are involved. Some even larger scale producers are probably required if Australia is to compete with the major producers of Australian wildflowers in other countries.

We have the germplasm and now we need the entrepreneurial strength to grow the industry.

The key commercial wildflowers are Geraldton wax, kangaroo paw, Thryptomene, Stirlingia and species of Banksia, Leucadendron and Protea, with species other than waxflower increasing in relative importance.

The major markets are Japan, the United States, the Netherlands, Canada, and Germany. Eucalyptus buds and foliage are also important. Opportunities exist for both the cut flower and foliage sectors plus the nursery industries in native plants. Fashion changes will demand continuing new cultivars and species.

Key outputs in 2006-07

• tendered for the commercialisation of Leptospermum varieties with Victorian Department of Primary Industries and Longford Flowers
• reported on proof of concept for sea freight (versus air freight) of wildflowers to overseas markets
• reported on new cultivars of Eucalyptus and Corymbia and produced a development and commercialisation plan
• released reports on:
• a potential new cut flower—Haemodorum coccineum
• speeding up the release of New Hybrid Leucadendrons
• developing synthetic seeds for clonal propagation of Australian plants

Key outcomes in 2006-07

• commenced development of a red flower suitable for the Chinese New Year Market
• developed a suite of new Leptospermum lines for commercialisation as cut flowers and landscape plants
• developed a suite of new Grevillea lines for commercialisation as cut flowers and landscape plants

Publications in 2006-07

Collaboration

• worked with the Industry Partnerships Program to bring industry together for both industry planning and R&D planning meetings
• worked with the Victorian DPI, Adelaide University and private companies to advance development and commercialisation strategies for new lines of wildflowers

Tea Tree Oil

Research Manager
Dr Roslyn Prinsley
Ph: 02 6271 4120 Fax: 02 6271 4199
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
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

Source of funds
This program is funded by voluntary industry revenue and matching RIRDC funds.

Research expenditure
2006–07: $34 0,351
2005–06: $417,324

Key performance indicators

• oil yield increases of up to 150%
• 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

Background
The tea tree oil industry comprises about 100 growers and is located principally in northern New South Wales and on the Atherton Tableland in Queensland. About ,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 2001-02. 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. Tea tree 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.

Key outputs in 2006-07

• finalised research for publication on the tea tree breeding program which demonstrates minimum improved yields of 70% over the industry standard
• completed, in association with industry, a safety dossier for tea tree oil and submitted it to the SCCP in Europe. It included reports on:
• a comprehensive literature review of the toxicology of tea tree oil
• stability of packaged tea tree oil
• p-cymene and peroxides as indicators of oxidation in tea tree oil
• in vitro human skin penetration of tea tree oil
• potential mutagenicity of tea tree oil
• skin sensitisation

Key outcomes in 2006-07

• demand by growers for improved seed from the breeding project
• better understanding by industry of the requirements for demonstrating safety to regulatory authorities

Publications in 2006-07

Collaboration

significant financial contribution by growers to the tea tree breeding program

• significant financial contribution by the Australian Tea Tree Industry Association to publish:
• The Development of the Safety Dossier
• a project on fabricating electronic materials from tea tree oil
• diagnostic tools for quality enhancement in tea tree oil
• significant financial contribution by companies to projects on:
• tea tree oil to prevent staphylococcal infections in dialysis patients
• effects to tea tree oil on biofilm formation
• use of tea tree oil in the decolonisation of Methicillin-resistant Staphylococcus aureus (MRSA) positive wounds

Portfolio 2—Established Industries

Overview

General Manager
Ms Margie Thomson
Ph: 02 6271 4140
Fax: 02 6271 4199
margie.thomson@rirdc.gov.au

Portfolio Goal
Adopt new technologies and systems for established industries.

Portfolio Output
To enhance and foster innovative rural industries through targeted investment in research and development.

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

Overall Outcome
To facilitate a more profitable, dynamic and sustainable rural sector.

Portfolio Inputs
Budgeted funds of $8.5m (including research expenditure of $7.6m). This is financed principally by industry levies and matching dollar contributions from the Commonwealth.

Total Expenditure
2006–07: $7.7m
2005–06: $8.1m

Background
The Established Industries portfolio spans the Rice, Chicken Meat, Horse, Pasture Seeds, Fodder Crops, Honeybee, Deer and Buffalo industries. Separate research programs are managed by RIRDC on behalf of these eight industries and are funded through one or more of the following sources:

• compulsory producer levies that are matched by government funds (some limited by three-year rolling formula as defined in the PIERD Act 1989)
• voluntary contributions provided by external statutory or commercial bodies
• government appropriations provided directly to RIRDC.

R&D within the Established Industries portfolio in recent years. However, generous financial grants provided by industry and/or the significant drawing down of RIRDC financial reserves allowed the key components of the Established Industries Portfolio to be maintained.

RIRDC continued its focus on support for higher yielding and improved quality crops and pastures through support for the development of improved oat varieties for hay production, definition of best practice Oaten Hay production techniques, determination of the impact of nematodes on pasture seed production, and release of techniques to support lucerne pollination with leafcutter bees. A focus on innovation and development in established industries played a key role in ensuring the commercialisation of products such as:

• the development of technologies to define and control endemic and emerging infectious and non-infectious diseases in the chicken meat industry
• the development of cold tolerant rice varieties
• the release of safe chemical controls for the small hive beetle to assist the honey industry
• the application of techniques for the artificial insemination of buffalo
• the support for producer-initiated‘strategic supply chain alliances'

The eight industries within this portfolio are committed to their RIRDC research and development program which has delivered them significant productivity, efficiency and environmental benefits over many years.

Challenges and Opportunities
To remain profitable and sustainable, while improving the condition of Australia's natural resources, remained a key challenge for established rural industries in 2006-07. The high level of competitiveness in international markets also meant that issues such as biosecurity, targeting products to enhance market access, assessment of product integrity, and animal and crop health issues needed to remain a central focus. For example:

• RIRDC funded development of higher yielding plant varieties that are linked to protecting farmers'terms of trade and have the potential to increase consumer demand
• the established industries'clean, green image is dependent on early management of pests and diseases. Several established industries including the pasture seeds, fodder crops and rice industries are vulnerable. RIRDC worked to find ways of reducing their dependence on chemicals which have potential environmental impacts
• water access was an important issue for researchers to consider, as water trading puts

pressure on smaller establishments to work smarter with an ever increasingly expensive resource. RIRDC supported projects that assist in our understanding of water balances and water efficiency in pasture and crop production

• while food safety has been a key focus of the Established Industries Portfolio for many years, maintenance of high standards of product hygiene, quality and safety are paramount to the further development of established industries. Collaboration with allied organisations identifying gaps in our current knowledge in regard to technical and production cost efficiency was a primary element of the Established Industries portfolio

Key R&D Issues in 2006-07

• development of methods and processes for long term maintenance of pasture seed germplasm
• improved understanding of fodder quality and its management
• improved protection for Australia against the entry of major honeybee pests
• enhanced preparedness for and capacity to respond to emergency disease threats for the chicken meat industry
• improved international competitiveness of the rice industry through higher yielding and improved quality varieties, which are focused on specific domestic and export consumer demands
• improved health and safety issues affecting the horse industry
• creation of producer initiated‘strategic supply chain alliances'that have the potential to increase demand and supply of Australian venison
• genetic and reproduction improvements in Australian water buffalo

Chicken Meat

Research Manager
Dr Vivien Kite
Ph: 02 6272 4152
Fax: 02 9925 0627
vivien.kite@chicken.org.au

Objective:
Through carefully focused R&D, increase sustainability and profitability in the chicken meat industry.

Strategic plan
The program has its own five-year R&D plan which is accessible in hard copy and at http://www.rirdc.gov.au/pub/ chick5yr.htm

Source of funds
This program is funded by statutory levies paid by industry participants. This levy revenue is matched on a dollar-for-dollar basis by the Commonwealth up to 0.5 per cent of the gross value of farm production.

Research expenditure
2006–07: $1,886,44 6
2005–06: $2,134 ,34 9

Key performance indicators

• improve liveability and other production outcomes
• improve performance criteria such as growth, feed conversion efficiency and breast meat yield
• improve level of uptake of environmental management systems by the industry and level of compliance with key environmental criteria
• improve adoption of and compliance with appropriate welfare standards
• improve level of uptake of on-farm and processing plant food safety programs and food safety intervention strategies

Background
Average annual domestic consumption of chicken meat is currently approximately 6kg/ person. In 2006-07, the chicken meat industry is estimated to have produced approximately 807,000 tonnes of chicken meat from 96 million birds.

NSW is the largest producer (%), followed by Victoria (28%), Queensland (19%), South Australia (9%), Western Australia (9%) and Tasmania (1%). Production has increased steadily over the past decade, with annual growth rates ranging between 0% and 7%. In 2006-07, the number of birds produced increased by .5% over 2005/06.

Production is dominated by a small number of large, vertically integrated, privately owned enterprises. These companies typically own hatcheries, feed mills, breeding farms and processing plants spread across a number of States, and contract the growing of meat chickens to independent growers, of which there are approximately 850 nationally. Each of the major companies operating in the industry invests significant funds into in-house R&D, particularly in the areas of market research and product development, processing technologies, quality control procedures, distribution and packaging.

Australia is a very small producer of chicken in a global context. The largest international chicken producing countries are the United States (28% of world production), China (19%), Brazil (1%) and the European Union (1%). The US, Brazil, the EU and Thailand are the biggest exporters of chicken meat, holding approximately respectively 7%, 1%, 1% and 9% of the world export market.

Approximately 28,000 tonnes (less than 5% of domestic production) was exported in 2006-07, at a value of $26 million. Australia is considered to have a good bird health status compared to most countries, and is one of the few continents untouched to date by the impacts of the H5N1 strain of avian influenza. This may provide opportunities for the export of breeding stock.

The RIRDC Chicken Meat R&D Program is a major partner in the Australian Poultry CRC, which ensures a comprehensive and well coordinated research program for the Australian chicken meat industry. The RIRDC Program has been adapted to collaborate with and complement the CRC program.

To remain competitive and expand its markets, the industry recognises the need for it to continue to make significant gains in areas of technical and cost efficiency. While its record in this respect over the past fifty years has been impressive, new and more effective solutions to old problems will need to be devised to support continued industry growth and sustainability. Flock health and optimal bird nutrition and feed utilisation are critical to the productivity and efficiency of the industry. Therefore, the Chicken Meat Program will, in collaboration with the CRC, continue to seek new ways to manage these issues, particularly through the exploration of alternative approaches for manipulating gut microflora so as to deliver beneficial impacts in terms of gastrointestinal health, feed efficiency and overall flock performance.

Environmental management issues will also continue to pose many challenges for industry over coming years, and there will therefore be a growing need to monitor the industry's environmental impacts and to develop and implement management programs and technologies which reduce these impacts.

Industry participants can and do undertake significant amounts of R&D, particularly in nutritional and bird health management, processing practices and product development. However, there remains a recognised need for the more‘generic'R&D that can best be undertaken through whole of industry funding bodies such as RIRDC and the Australian Poultry Cooperative Research Centre. Industry support for the RIRDC Chicken Meat Program continues to be strong. The Australian Chicken Meat Federation has, in the past year, become much more active in the area of product and industry image management.

Key outputs in 2006-07

• developed new, highly sensitive diagnostic assays for detecting and differentiating between the seven species of Eimeria capable of causing disease in Australian poultry flocks
• clearly established the suitability of pearl millet as an ingredient in meat chicken diets
• confirmed that Australia remains free of exotic strains of infectious bursal disease virus (IBDV), including very virulent forms of IBDV, and that local strains have not undergone any major shifts in virulence or antigenicity
• new molecular tools for tracing Salmonella established and evaluated, and their value for this purpose demonstrated
• several technologies for managing odour emissions from meat chicken farms, including windbreak walls and four commercial in-shed treatments, evaluated but found to be of limited value
• clearly established the potential of several novel biological control agents for managing Darkling beetles in meat chicken houses
• potassium diformate shown to have some promise for the control of necrotic enteritis in meat chicken flocks
• rapid, highly sensitive polymerase chain reaction (PCR) tests for detecting avian influenza transferred to and validated in eight laboratories across Australia
• demonstrated that the use of whole-shed CO2 gassing of poultry flocks to be a valid and viable option for the mass destruction of poultry in an emergency disease response scenario

Key outcomes in 2006-07

• confirmed Australia's favourable status with respect to significant emergency poultry diseases
• enhanced capacity to manage flock health and food safety, resulting from the adoption of new disease management tools and practices, including the adoption of enhanced biosecurity practices
• enhanced adoption of environmental management systems by industry, leading to reduced impacts of industry practices on the environment and the industry's neighbours
• enhanced Australia's capacity to respond to an incursion of emergency poultry diseases, such as avian influenza or very virulent infectious bursal disease

Publications in 2006-07
06/069 2006 Research in Progress—Chicken Meat
07/035 Chicken Litter: Issues associated with sourcing and use
05/067 Chicken Meat Research in Progress 2005

Collaboration

• RIRDC is a core partner in the Australian Poultry Cooperative Research Centre
• worked with the Australian Government and State agencies and the poultry industry on exotic disease surveys

---

Honeybee

Research Manager
Ms Margie Thomson
Ph: 02 6271 4140
Fax: 02 6271 4199
margie.thomson@rirdc.gov.au

Objective:
To improve the productivity and profitability of the Australian beekeeping industry.

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

Source of funds
This program is funded by statutory levies paid by industry participants. This levy revenue is matched on a dollar-for-dollar basis by the Commonwealth up to 0.5 per cent of the gross value of farm production.

Research expenditure
2006–07: $43 0,663
2005–06: $313,34 7

Key performance indicators

• increase production from improved nutrition and diversification
• reduction in production losses caused by pest and diseases
• maintenance of access to melliferous resources on public lands
• pollination information disseminated widely for both beekeepers and growers
• data on effect of collection, bulk handling, storage and processing on honey quality and purity available
• level of research uptake by industry

Background
Australian honey has the reputation in the world market as being a premium quality product. It is produced over a large geographical area from a wide variety of flowering plants which, because of fluctuating rainfall patterns and the extended budding cycles of much of the honey producing flora, tend to flower spasmodically.

About 70-80% of honey produced is from native flora, especially eucalypts growing on public, Crown leasehold and freehold land. The flora are diverse, growing as heathland and mallee eucalypts on coastal plains and in semi-arid regions of Australia, through medium rainfall to subalpine regions and rainforests of Tasmania, northern New South Wales and Queensland.

Australia produces between 20-30,000 tonnes of honey a year with an estimated gross value of production of about $65 million, although this is highly variable depending on the volume of honey produced and the price of honey.

Domestic consumption is approximately 15,000 tonnes a year and the remainder is exported in pre-bulk form, making Australia the world's fourth largest exporter of honey. It is estimated that the gross value of production, including queen and package bees, beeswax, pollen and pollination, is $65 million. In addition, the value of pollination to the Australian economy has been estimated at between $100 million and $1.7 billion.

Key outputs in 2006-07

• delivered a new Honeybee Five-Year R&D Plan for the period 2007-12
• assessed long-term flowering patterns of south-east Australian melliferous flora, including Eucalyptus, Banksia and Eucryphia species, encompassing investigation of pollen-related bee nutrition, the effects of ‘toxic'nectar inVictorian eucalypts, bogong moth visitation, and logging on nectar production
• investigated the use of high power ultrasound for candied liquid honey liquefaction and controlled creamed honey crystallisation
• produced an updated version of the RIRDC publication Commercial Beekeeping in Australia for distribution at APIMONDIA 2007 and for persons interested in the environment in which beekeeping is undertaken
• disseminated research results at beekeepers' state conferences
• provided support for the Marcus Oldham Rural Leadership Program
• delivered research to identify the most appropriate insecticides and insecticide application methods to control small hive beetle in hives which included development of the insecticidal harbourage developed in Part 1 of the project into a ready-to-use product for use by beekeepers
• reviewed literature on, and surveyed Nosema apis in Australia

Key outcomes in 2006-07

• improved disease management and reduced chemical use, as part of the beekeeping
• industry quality assurance program, to safeguard the quality and image of honey
• improved protection for the Australian beekeeping industry to guard against the entry into Australia of major honeybee pests, especially varroa mite
• improved management processes to control possible introduced pests such as the small hive beetle
• better understanding of the impact of logging on nectar-producing trees, especially some types of eucalypts
• identified pollen substances that are attractive to honeybees and meet their nutritional requirements

Collaboration

• The RIRDC Honeybee R&D Program held a Honeybee Linkages Workshop in Canberra in April 2007 to discuss future honeybee pollination R&D and education and training requirements for the honeybee industry. Delegates came from a broad industry base including the honeybee industry, horticultural, pasture seeds, and grains industries, research and development service providers, state and Australian Government representatives, and university research centres. This led to a successful application for funding assistance through the Advancing Australian Agriculture Program to address issues identified at the Workshop
• RIRDC held a Pollination Workshop to allow all the related industries to outline the opportunities and threats the industry faces in the future, and gain support for additional funding on important projects.

Publications in 2006-07

07/009	2006 Research in Progress Honeybee
07/059	Commercial Beekeeping in Australia (Second Edition)
07/056	Honeybee Five-Year Plan 2007-2012
07/067	Honeybee Industry Linkages Workshop April 2007
07/099	The Future Development of the Australian Honeybee Industry—Submission to the House of
	Representatives Agriculture Fisheries and Forestry Committee Inquiry
07/028	Transmission of American Foulbrood (AFB) Disease of Honeybees Through Replacement of Queen bees

Honeybee Industry Linkages Workshop 23-24 April 2007
In April 2007, RIRDC convened a workshop that for the first time brought together representatives from:

• industries that are reliant on honeybee pollination
• research and development service providers
• state and Australian Government representatives
• university research centres

Two main threats to the honeybee industry and pollination services include a reduction in access to native flora to support honey production and the potential for an incursion of Varroa mite. The mite, a major parasite of bees found in most areas of the world except Australia, is likely to decimate the honeybee industry if it gains entry to the industry.

The workshop led to Government funding for RIRDC to develop a business plan for an entity that represents all interests and beneficiaries across the value-chain to ensure a coordinated and collaborative approach to the pollination industry.

Honeybee pollination is a strong contributor to Australia's agricultural output. It assists some crops to reach maturity, raises yield and quality in others, reduces flowering time (and in turn decreases risks, water used and pesticides needed), and in some cases has had a beneficial effect on soil fertility.

If honeybee pollination stopped completely then large losses would be felt across Australian agriculture, particularly in the horticultural sector where 65% of horticultural crops require pollination services from honeybees

Insecticidal control of small hive beetle project
The small hive beetle is an introduced bee-hive pest causing hive losses and reduced productivity for beekeepers on Australia's eastern seaboard. Beekeepers may use oil traps to kill beetles in hives or permethrin soil drenches to control larvae in the soil; however, both are laborious, need regular attention and are of limited effectiveness.

This RIRDC research refines the insecticidal harbourage developed during a previous project into a ready-to-use product for beekeepers. The resulting device is actively sought out by adult beetles and is both user-friendly and safe for beekeepers, their bees and honey. Beetle infestations in hives at three western Sydney apiaries were reduced by 90-96% over six weeks with no detrimental effects on hive productivity or bee health.

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