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| Rural Industries |
Operational Activities
Operations Summary and Key Statistics
In 1994-95, the Corporation financed some 450 projects in its 23 program areas ranging in value from $5,000 to $250,000pa and in duration from less than 12 months to four years. A year by year comparison of projects considered and financed by the Corporation is profiled in Figures 3 and 4.
Figure 5
FINANCING RIRDC R&D ACTIVITIES IN 1994-95
| Source of Funds for RIRDC Projects | % |
| Commonwealth appropriation | 25 |
| Industry research levies | 9 |
| Commonwealth matching dollars | 8 |
| Interest and other | 6 |
| Other industry funding | 11 |
| Research organisation funds | 41 |
| Deployment of Corporation funds | |
| Research programs | 92% |
| Communication | 1% |
| Corporate | 3% |
| Administration | 4% |
| Research Programs (92%) comprised of: | |
| RIRDC | 73% |
| Chicken Meat | 8% |
| Eggs | 5% |
| Tobacco | 6% |
| Dried fruits | 7% |
| Honeybee | 1% |
Industry Meetings
The Corporation had two meetings with representatives
of its prescribed industry organisation, the National
Farmer's Federation, during the year. In September
1994, in Perth the Chairman Mr Tim Sholtz, and member
Mrs Shirley Thorn of NFF's Agricultural Science and
Education Committee met with RIRDC's Board to receive
a report on RIRDC's 1993-94 activities and plans for
1994-95. Issues arising in discussion included appropriate
balance between longer term strategic and applied research
and appropriate performance indicators for longer term
strategic research for RIRDC, matching commonwealth
$ for $ support for smaller rural industries and cross
commodity R&D collaboration.
In April 1995, the Board met with NFF president Mr Donald McGaughie and Executive Officer Mrs Julie Austin in Canberra. Issues discussed included the possibility of NFF establishing a special sub-group with cross committee representation to interact more effectively with RIRDC on the broader, more strategic and philosophical issues facing the sector and the resulting R&D needs and priorities, NFF support for new and emerging industries which were not necessarily NFF members and inter-Corporation collaboration on cross commodity R&D.
In addition, Corporation Directors and staff meet with RIRDC's many associated industry stakeholders to discuss industry developments and strategic plans, R&D needs and priorities, financing of R&D and other industry initiatives and to report progress on R&D programs.
Review and Evaluation
Program review and evaluation is linked into an integrated
planning cycle within RIRDC. At the corporate level,
RIRDC's R&D investment portfolio of R&D programs
is critically reviewed each two years, individual R&D
program plans are reviewed each four years (or more
frequently if necessary) and the progress and outcomes
of R&D projects are monitored and evaluated on
an ongoing, day to day basis. The 1994 analysis of
the R&D portfolio several programs have been rerated
and four programs in the multi-industry activities
portfolio were combined and reduced to two programs.
Reviews of the Deer, Essential Oils and Plant Extracts, Climate Change, Horses, Fodder Crops & Animal Feeds, and Pasture Seeds programs were undertaken (or were in progress) in collaboration with industry stakeholders.
Programs scheduled for review in 1995-96 include Cashews; New Animal Products; and Education, Extension & Information Systems.
Cost Benefit Analysis
Cost benefit analyses are used extensively by the Corporation
to assess 'return on investment' in research. It is
a key component of the Corporation's 'Portfolio Analysis'
and of project assessments. The technique is also
used to assess the benefit to industry of completed
R&D projects.
Ten Corporation projects undertaken in Western Australia over the period 1988 to 1994 were selected for assessment in 1995. These projects yielded a cost/benefit return to the RIRDC investment ranging from zero, for a project which led to an industry decision not to pursue export developments for West Australian grown potatoes, to a cost/benefit ratio of 29 for a project which led to industry adoption of a new technique for measurement of goat fibre.
Table 1
Benefit Cost Analyses Results from a Selection of Completed
RIRDC Projects in WA
| PROJECT DESCRIPTION | BENEFIT COST RATIO | NET PRESENT VALUE |
| Cineole production | 4.1 | $0.14M |
| Emu processing and product development | 5.3 | $2.40M |
| Goat fibre measurement | 29 | $3.40M |
| Hay export to Japan | 20 | $5.40M |
| Lucerne Rhizobia | 2.8 | $0.14M |
| Potato exports | < 1 | NA |
| Flowers - post harvest quality | 1.4 | $0.13M |
| Deer - supplementary feeding | 2.3 | $0.13M |
| Kondinin survey | 5.9 | $0.16M |
| Kondinin publication - Cut and Dried | 4.2 | $1.00M |
NB: The above results are indicative of the estimated returns which will accrue to the projects for the most likely projected outcomes.
Policy Development
With the growth of RIRDC's activities, Directors have
moved to more fully document the Corporation's policies
and procedures on wide ranging activities and functions
such as commercialisation, intellectual property,
extension and technology adoption, receipt of gifts
and hospitality, use of credit cards, and personnel
management, etc.
The policies and procedures are being documented in a format which is suitable for possible ISO 9000 best practice accreditation in the future.
New Five Year R&D Plan 1995-2000
In May 1995 the Corporation submitted a revised Five
Year R&D Plan (1995 - 2000) to the Minister for
Primary Industries and Energy which was endorsed by
the Minister on 5 June 1995. The new plan is summarised
on pages 4-5 of this report.
The revised plan is the culmination of some 18 months work by Directors and staff in close interaction with RIRDC's many industry, community and government stakeholders, and draws together several background consultant review studies for the Corporation.
The revised plan provides the Corporation with a much more relevant corporate strategy for RIRDC's current and prospective operating environment and responsibilities. Consistent with new accountability requirements for public enterprises the new plan also embodies ambitious performance goals and relevant performance measures.
National Strategy for Agricultural Research
During the year the RIRDC Chairperson represented R&D
Corporations on the Standing Committee on Agriculture
and Resource Management (SCARM) Steering Committee
which guided the development of a draft national strategy
for agricultural research. The Corporation's Managing
Director has represented R&D Corporations on the
planning committee for a national conference in late
August 1995 to follow-up on the draft strategy and
to develop action plans to implement the strategy.
PMSEC 'Food into Asia' Working Party
The Corporation Chairperson was invited by the Chief
Scientist to be a member of the government / industry
working party which developed a discussion paper for
the Prime Minister's Science and Engineering Council
and which subsequently, in 1995, presented their
conclusions and recommendations to the Prime Minister
and relevant Ministers of the Council.
AgriFood Council
Corporation staff maintain regular contact with DPIE
and DIST staff supporting the activities of the Government's
AgriFood Council to provide appropriate R&D support
where necessary and to ensure coordination of respective
activities. RIRDC agribusiness and trade research
reports have featured regularly on the Council's agenda
and the Corporation has benefited the Council by supporting
staff advice on R&D needs and priorities.
Corporation staff have also participated in Commonwealth - State agribusiness coordination meetings organised on two separate occasions by DPIE and State hosts during 1994-95. The meetings have assisted coordination of R&D effort, interagency communication and avoidance of duplication.
Incorporation of New Programs
In follow-up to Stage 1 of the Budget (ERC) Review (see above), the chicken meat, egg and honeybee industries decided to incorporate their respective industry R&D programs within RIRDC from 1 July 1995. At the same time the tobacco industry decided to establish a separate new R&D Corporation.
Corporation staff and Directors were involved in regular liaison with industry and R&D Council representatives leading up to the integration of Corporation and Council activities and, since 1 July, in their implementation. The Corporation considered the decision to merge to be of benefit to both the respective industries and to the Corporation. However, the additional geographic diversification of RIRDC program management nodes (both the chicken meat and egg industry programs will be separately managed from Sydney) will require the introduction of new corporate communication and networked information management systems.
The buffalo industry program, which also transferred to RIRDC on 1 July, resulted from an industry decision to terminate its marketing and promotion with the AMLC and to transfer its R&D levy and export charge funds from MRC to RIRDC management. The Chairman and RIRDC staff are working with this small industry on the development of an appropriately resourced small R&D program to meet its current and emerging needs.
Budget/Program Increase to $20 Million
The Corporation has developed, and the Minister has
endorsed, an R&D program budgeted at $20,076,624
in 1995-96. This represents a 28 percent increase
over the 1994-95 program budget. It is attributable
to increased program funding from industry (and in
particular the horse industry), and to the incorporation
of the chicken meat, egg and honeybee programs.
The Corporation has been able to maintain its corporate and administrative overheads below 6 percent of the total program budget but has increased its commitment to R&D program planning, review and evaluation in line with the Governments priorities and the recommendations of the external reviews (see above).
Opportunities, Threats and Plans
The Corporation continues to seek opportunities to strengthen
its R&D investment portfolio.
RIRDC's special responsibility for provision of R&D support services to small and emerging industries which are not well organised or resourced poses a cost efficiency on the Corporation's operations when benchmarked with counterpart R&D Corporations and program management competitors.
This relative cost impost is being addressed by seeking complementarity of management input effort wherever possible, by sharing costs with industry partners and by seeking to manage larger industry programs which can provide the Corporation with management systems and efficiencies of scale to offset the impact of the many small and emerging industry programs and projects.
The Corporation has also enhanced its efforts to joint venture its 'multi-industry' programs with R&D Corporation counterparts and others. This has resulted in an expanded program on agroforestry R&D with the Land & Water Resources Research & Development Corporation and the Forest & Wood Products R&D Corporation and a prospective joint venture R&D program on farmer occupational health and safety with GRDC, MRC and the IWS. Prospects for enhanced collaboration on plant pest, disease and weed control have also been investigated and a plan of cooperative action prepared for R&D Corporation's consideration. However, counterpart Corporations have rejected an invitation to join with RIRDC in a joint venture agribusiness program believing that their agribusiness priorities are best pursued individually with their industry stakeholders.
The maintenance of Commonwealth Government funding support, in the face of review after review, continues to be a major threat, or at least an uncertainty, to RIRDC's operations. The Corporation has been very successful in raising additional investment funding from industry for collaborative R&D programs but this has not been matched in corresponding Commonwealth support through the $ for $ levy matching arrangements available to counterpart R&D Corporations. As advised above, RIRDC has sought the extension of HRDC's voluntary/regional levy $ for $ matching facility to RIRDC and also more efficient mechanisms to introduce statutory industry levies for smaller industries.
The Corporation continues to see the sustainable management of Australia's natural resource base as a major challenge, and the most significant threat to Australian agriculture if we do not, and continues to seek every opportunity to sponsor innovative R&D aimed to address problem areas and to provide practical, implementable solutions.
Finally, by way of introduction, RIRDC will maintain its focus on the people in rural and associated industries and their capacity and skill to be able to seek the best information from around the world and to implement it for improved profitability and sustainability of their businesses and communities.
Last updated: 9 August 1996
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