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Rural Industries Research & Development Corporation |
Rural Industries Research & Development Corporation
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Shaping the Future is
the corporate newsletter of RIRDC. It is distributed quarterly by direct
mail to over 4,000 researchers, industry, government, farmers, libraries
and consultants. Contributions are welcome.
Phone (02) 6272 4539,
Fax (02) 6272 5877, Editor: Martin Field, ph (02) 6272 4735. email:Murray.Hansen@rirdc.gov.au
In this issue:
Analysis
puts new rural industries to the test
A
word from the Managing Director - 24th November, RIRDC’s 10th birthday
Atlas
maps fodder industry
Business
Plan builds on export dreams
Diversified
farmers get their claws into freshwater cray
RIRDC
Rural Women’s Award 2001 closes on 31 October
Clever
plantations put trees to work
Professional
regulations inhibiting rural growth
DNA
fingerprinting for Olives
Welfare
issue ‘layed’ to rest
Medicinal
herbs export opportunities
Organic
approach to food conferenceAnalysis puts new rural industries to the test
The financial potential of eleven new agricultural enterprises has been analysed in The New Rural Industries Financial Indicators Volume II.
The report lifts the lid on the financial drivers of emerging industries, giving farmers and investors an insight into the potential, and pitfalls, of new ventures.
Agricultural consultants and resource economists Hassall & Associates used a systemised model to analyse each industry, providing preliminary indicators of financial viability, benchmarking the industry against wine grapes as a successful enterprise and treasury bonds.
Red deer, Alpaca, Dairy goats, Emu, Culinary herb, Medicinal herb, Persimmon, Durian, Jojoba, Sesame and South African Proteaceae (Protea flowers) were the industries analysed.
Dairy goats performed well in the Financial Analysis
All returned various levels of positive returns from marginal to very favourable. The two herb industries, Dairy goats, Emu and Durian returned the best results in the three indicators – benefit cost ratio, net present value and internal rate of return.
The research is designed to provide important information to prospective investors using a hypothetical enterprise to give an insight into the potential or otherwise of these industries.
It highlights what happens if prices drop dramatically or yields aren’t what were expected and also shows the possible volatility which can also mean large gains as prices increase, market access improves and management is upgraded.
It is the second analysis with eight industries going under the microscope last year.
Hassall and Associates economics director Michael Clarke said the research matched an individual industry’s performance against set criteria developed after a review of financial evaluation methods used in other industries. Chardonnay wine grapes acted as a benchmark rural industry and treasury bonds was benchmarked as a financial investment. Mr Clarke said a three-stage model acted as a pointer to investment. Stage one is a broad analysis to ensure the concept’s fundamental components and criteria are in place.
Stage
two is more comprehensive, identifying prospects that are worthy of commercial
advancement.
"The third stage is the acid test and involves inputs specific to the development of a project and can only be made by the individual proponents prior to commercialisation," Mr Clarke said.
"As an investment tool it is a strong indicator, not a crystal ball, and potential investors need to consider their personal circumstances very carefully."
The New Rural Industries – Financial Indicators Volume II is available for $20 by phoning RIRDC on 02 6272 4819 or can be ordered from the RIRDC secure site www.rirdc.gov.au
A
word from the Managing Director -
24th
November, RIRDC’s 10th birthday
The Corporation commenced operations on 1 July 1990 with a program to develop small industries that may have otherwise struggled to get off the ground and fund multi-industry research with a high potential pay-off for rural Australia but would not be funded by individual R&D Corporations acting alone.
The broad mission was "to enhance the sustained economic contribution of agricultural industries to the national economy" and it is much the same today.
We exist to help new industries develop and ensure the smaller established industries we represent continue to prosper.
The Corporation has not stood still, evolving and developing along with the rural industries we represent, from billion dollar chicken meat and horses to single operators with an idea and vision.
Along the way, I believe we have made some significant contributions to rural and regional Australia.
A quick look back through history lists hundreds of new industries. Some have started small and prospered slowly, building information and markets. Others have literally taken off, only to crash as investors have overlooked fundamentals in the industry in the search for instant results.
Fortunately we are seeing some of these industries undergoing resurgence as solid markets are built and development continues. Like any industrial sector we need the input of new ideas, systems and products – and some industries have not reached first base, but provided impetus to keep developing the agricultural sector.
Volatility will always be a part of new industry development. But we shouldn’t shy away from it, for the Corporation has shown that this volatility when backed by strong research, market development and dedicated groups and individuals will help produce the greatest returns.
To ensure we are hitting the right areas with research we conduct a rolling round of evaluations of projects and their outcomes.
For example, the latest round looked at new industries, and within that development of Lentil varieties and a mechanised coffee harvester, two of the original projects from 1990/91.
Both gave positive returns exceeding our targeted rates of return and benefit/cost ratios. It would be nice to take all the credit for good results, but the fact is that RIRDC has always placed great importance on working with industry. This is particularly important with the diversity of programs we have.
For example, in the Corporation’s first year it worked with the Wildflower and Lychee industries to identify research priorities that would return a long-term benefit. In Wildflowers new varieties needed to be found to continue industry growth, which at the time was valued at about $20m with exports about $7m. A wide range of species was evaluated, including some 200 from rainforests for indoor use.
In the first year alone 13 varieties of hybrid Geraldton Wax were released, 11 rainforest species were chosen for further evaluation and a new banksia cultivar was developed. This was the start of a strong breeding emphasis which is still continuing.
Geraldton Wax is now one of the key commercial wildflowers that has helped exports grow four-fold to $28m.
In 1990 Lychee had a niche domestic market, but considerable export potential. Control of fruit set and greater understanding of pest management and root rot were identified as problems that needed solving before full market development could be reached.
Consequently 1500 hybrid plants were developed for research purposes.
Backed by market research, the industry is now achieving its goal of greater product exports.
As we enter the next 10 years, we are building on past results, aiming to get research to commercialisation where the many dedicated innovators will ensure continued industry development.
Australia’s fodder industry is a quiet achiever with a gross value of production in excess of $1billion a year. Its growth over the past 10 years has relied on individual assessment and isolated statistics, rather than a comprehensive information set.
But RIRDC has now produced the first Australian Fodder Industry Production Atlas, a comprehensive compendium of statistics and information about the industry.
The atlas maps Australian fodder production patterns by defining volumes, location, nature, timing and quality of fodder produced indicating potential for trade. It also identifies major operators, and organisations involved in production, trade and servicing.
It was produced by Arthur Stubbs of Primary Tasks, who undertook extensive research and communication to build the information and statistical databases.
It is planned to continually update the atlas to provide ongoing information to industry.
More
information: Jeff Davis (02) 6272 4152.
Business Plan builds on export dreams
Ten finalists have been chosen in the RIRDC Business Plan 2000 competition and are now competing for $50,000 to help achieve their commercial vision for RIRDC research.
A winner and two runners-up, who will receive $25,000 each, will be announced at the RIRDC dinner on November 24.
The result has highlighted RIRDC’s diverse range of industries, with finalists involved in the production of truffles to the development of antibacterial honeys.
The competition was open to any research organisation, team, individual or business involved with a project funded by RIRDC since the Corporation was established in 1990. RIRDC Managing Director, Peter Core, said the Business Plan Competition had presented a unique opportunity for groups to explore the commercial potential of research previously funded by RIRDC.
"Our aim is to ensure commercial opportunities from research are developed," Mr Core said.
"It is pleasing that these 10 groups have the vision required to develop
Australian agriculture, and present diversified products to growers, processors and markets."
The 10 finalists are:
Nypa Australia, South Australia, who are commercialising technologies to develop salt tolerant plants to improve land productivity.
Awassi (Aust), NSW, who have developed production and marketing of sheep milk products, primarily specialist cheeses.
University of Melbourne, Victoria, has developed a diagnostic test used in conjunction with vaccines to improve the health of poultry worldwide.
Centre for Food Technology, Queensland, is developing Tempeh-based snack foods from soybeans.
Tasmanian Department of Primary Industries, Water and Environment, aims to supply fresh wasabi, a perennial crop used widely in Japanese cuisine, to high class Pacific Rim restaurants.
University of Tasmania and Essential Oils of Tasmania, are developing native Tasmanian Mountain Pepper as a natural product for use in food products, toothpaste and oral refreshers.
Medihoney, Queensland, is commercialising antibacterial honey for therapeutic uses, such as wound care.
Agrilink Asia Pacific, Tasmania, has established an industry for Japanese ginger, or Myoga, a traditional vegetable which can be supplied direct from Australia when out of season in Japan.
Perigord Truffles, Tasmania, has taken up the challenge to supply this French delicacy to the Northern Hemisphere.
Persimmon Export Company, South Australia, is creating a successful new industry, building on the current level of 200 growers.
More information including summaries of the 10 finalists are available from the website at www.rirdc.gov.au/businessplan.
Diversified farmers get their claws into freshwater cray
Freshwater crayfish – Yabbies, Redclaw and Marron – have become one of the farm diversification success stories of recent times.
Farmers seeking new commercial opportunities have developed the industry through the use of purpose built ponds or from harvests from traditional farm dams.
The potential for expansion over the next five years is the subject of new research which has taken a broad view of the industry nationally and found the industry has a rosy future.
Export markets have been identified to grow to 2000 tonnes a year, which combined with domestic consumption is expected to absorb increased production to 2004/05 for yabbies of 293%, redclaw (239%) and marron (381%).
The combined growth to 1589 tonnes will raise the industry value to $20.7 million, up from 421 tonnes and $5 million in 1998/99. Despite the magnitude of the predicted increases, prices received by farmers for freshwater crayfish are expected to remain relatively stable.
For redclaw and marron the predicted increase in production will be based on semi-intensive aquaculture in purpose built ponds. For yabbies the majority (72%) of the predicted increase estimated to come from increased utilisation of existing farm dams.
But
there are impediments to expansion that need to be addressed including:
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Mary Nenke, WA Rural Woman of the year 2000 is involved in all aspects of the yabby industry in WA |
The report includes statistics on current production, predicted future production and current and future prices and markets. There is also a model of enterprise profitability.
"Potential
for expansion of the freshwater crayfish industry in Australia" is $10
and available from 02 6272 4819.
| RIRDC
Rural Women’s Award 2001
closes on 31 October |
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RIRDC’s annual Rural Women’s Award is up and running with judging underway after applications closed on October 31.
The award supports rural women with a burning vision for agriculture with the opportunity and resources to make a greater contribution in their given fields, each receiving a $20,000 Bursary.
Now in its second year, is playing a pivotal role in the revitalisation of rural Australia, by capitalising on the talents and skills of rural women and encouraging their greater contribution to its decision making.
RIRDC have welcomed two new sponsors this year the Australian Womens Weekly and the Sidney Myer Fund supporting the Award, joining ABC Radio and Rural Press.
Womens Weekly will profile each of the state winners in its April edition and are the principal supporters of the Award dinner in March.
Following close of applications, the selection process will begin in earnest to decide who are the 2001 Award State and Territory winners,.
The State and Territory winners and up to two finalists from each state will attend the RIRDC National Leadership Seminar to be held in Canberra next March. The Seminar will provide participants with valuable training in leadership and management, media and presentation, along with unique networking opportunities.
More information from: www.ruralwomensaward.gov.au
Clever plantations put trees to work
Australian land managers will soon have a new tool in the battle against salinity, with the development of design guidelines for clever tree plantation systems.
The guidelines are being developed by CSIRO researchers who have undertaken the project for Australia’s Joint Venture Agroforestry Program (JVAP).
"These guidelines will help land managers take action against salinity and waterlogging in areas of Australia which are prone to land degradation," JVAP Research Manager Roslyn Prinsley said.
"The search for new methods has developed a series of designs for agroforestry systems that complement traditional agriculture so that farmers in lower rainfall areas, which are our traditional farming lands, will be able to benefit from the implementation of trees in the landscape.
Design
guidelines nominate best tree placement
"It has been difficult to give specific advice on tree planting strategies, but CSIRO’s blend of computer modelling and field experiments identified the systems that were best suited to site conditions and land management objectives.
"Put simply, the trees will be planted on sites where they will use most water, improving their growth rates and working best to reduce salinity and waterlogging. It is a win-win for land managers."
Dr Prinsley said the design studies would be available in mid-December and were the first in a series of four projects that would be developed into guideline manuals for broad use.
The
other manuals would focus on:
Dr
Prinsley said two new research updates had been also been produced which
are available free.
Trees, Water and Salt summarises the guidelines mentioned above while Products and Services from Low Rainfall Tree Production gives an insight into the opportunities for Farm Forestry in the drier regions of Australia.
More information: Dr Roslyn Prinsley 02 6271 4033 or Sharon Davis 02 9271 6671
Professional regulations inhibiting rural growth
The decline in regional service levels has been a topical item for the past few years.
But what has caused the decline? It is widely held that market forces, through policies of globalisation, deregulation and competition to promote broader economic growth are at fault.
In fact, one class of regulations, professional regulations may be accelerating the demise of small towns and remote businesses.
Professional regulation: its impact on rural Australia, is a new report by ACIL Consulting for RIRDC. It has found that in remote locations, where many services would in ordinary circumstances be relatively more costly or more scarce than in the cities, professional regulation is likely to be making a bad situation worse.
This is a threat to the competitiveness of Australian farming. Professional regulation can affect the competitiveness of rural-based industries such as agriculture on two levels - directly, by reducing the availability of purchased inputs like veterinary services, motor repairs or kangaroo harvesting, and indirectly by making life more expensive, or less convenient, for the people who live on farms and operate agricultural enterprises.
The report concludes that the indirect impost of professional regulation on agriculture in remote locations could be more significant than the direct.
Of particular concern is the artificial, regulation-induced, shortage of General Practitioners in regional areas.
ACIL says that pressure from the doctors’ professional association and Health budget concerns have led the Commonwealth Government to deliberately constrain doctor supply, a policy which falls most harshly on patients in marginal areas - places with low population density and low growth prospects.
The report is available from www.rirdc.gov.au under the Global Competitiveness sub-program heading, or in hard copy form for $10 from 02 6272 4819.
Olives continue to be one of the big growth industries in diversified agriculture and three new Olive projects have been announced for this year to meet the demand.
The University of Adelaide in conjunction with other agencies and companies, through principal investigator Professor Margaret Sedgley, will continue to select for new improved olive cultivars from wild southern Australian material. The selection will be made on the basis of oil analysis, DNA fingerprinting, propagation and field trials.
The researchers expect the project will provide a greater array of cultivars, improving yield and quality of Australian oil, and provide quality assurance for the industry.
At the University of Western Australia, Professor Stan Kailis will produce Australia’s first National Table Olive Manual.
The manual will be the prime guideline for maintaining quality and safety in the Australian table olive industry.
The project will also deliver a scientific review of the National and International literature on quality, safety and HACCP management of table olive production and publish a survey of the size scope and production methods of the Australian table olive industry.
The research will complement a growth in the table olive industry which is estimated to reach 5000 tonnes by 2005 at an estimate retail value of $80 million.
The third project, from De Barro Agricultural Consulting will evaluate water requirements of olives from seedling to pre-fruit bearing.
The project aims to increase the understanding of water use, providing a flexible protocol suitable in any soil type in any region to improve the efficient use of water resources.
Irrigation monitoring sites and a weather station will be installed following the planting of seedling olive trees equipped with a micro-sprinkler irrigation system.
It follows other RIRDC funded research by the University of Adelaide and will be the first quantified work in the area in Australia. At present the water requirements of young trees before they bear fruit is made using "rule of thumb" estimates, speculation and research from other continents. More information: David Evans, New Plants research manager, davide@orac.com.au
The welfare of laying hens is an issue of great concern to the public and to industry. Fortunately, the goals of industry and the public go hand-in-hand. It makes good business sense to ensure that hens are comfortable, well-fed, healthy and free of stress as hens will not lay as many eggs if they are unwell, stressed or not fed properly.
At
meetings in March and August 2000 the Agriculture and Resource Management
Council of Australia and New Zealand (ARMCANZ) considered issues relating
to the housing and welfare of laying hens and was noted that "there
is no ideal egg production system – they all have their strengths and weaknesses"
and
"ultimately,
any solution to animal welfare issues in relation to egg production will
require a judgement on balance having regard to the competing scientific,
economic and moral issues involved". To ensure decisions on layer hen
housing can be underpinned with accurate, objective and comprehensive scientific
data ARMCANZ has recommended that RIRDC conducts further research and development
on the key areas of:
Two
current RIRDC projects are already addressing some of the areas recommended
by ARMCANZ for future R&D: "The economic impact of changing Australian
egg production systems" (ANU-41A).
This project will assess the socio-economic impact of changing Australian egg production systems such as the costs and benefits of possible future scenarios to industry, consumers and society.
"The assessment and development of best management practice techniques for Australian laying hens housed in conventional and alternative laying systems" (UQ-93A). This project will provide a comparison of existing housing systems via a national survey of commercial flocks and development of best management practices through quantitative research for free range, barn and cage production systems in relation to welfare, production, economics, air quality, egg quality, food safety, health and parasite control. This will provide the most comprehensive range of data ever collected on these three systems in Australia and, we believe, worldwide.
The survey will give a snapshot of these three systems in commercial practice and will provide a baseline against which progress can be measured. Controlled experiments carried out with these systems and in furnished cages simultaneously will assist in identifying areas for improvement and for further research and development efforts.
For further information contact Irene Gorman on (02) 9570 9222.
Medicinal herbs export opportunities
Diversified crops like Echinacea, Ginseng and St Johns Wort are offering Australian farmers new export opportunities.
The extracts from these plants are used broadly in the flavour and fragrance industries and medicinal, pharmaceutical and insecticidal outlets, a market in the USA alone of $3.9 billion a year.
A report by Brian Chung of Botanical Resources Australia and Keane International Marketing of Chicago, identified the growing US market for natural plant extracts as a prime opportunity for Australian products.
Mr Chung said the consumer use of herbal products in the USA had increased substantially with less than 5 per cent of the population using these products in 1991 and almost 40 per cent using them in 1998.
Total world consumption, of which 78 per cent is in the USA, Western Europe and Japan, is forecast to rise 3.5-4 per cent for the next few years.
Medicinal herb products are the fastest growing segment of the plant extract industry and in 1996-1998 sales of St Johns Wort rose 2801 per cent and Echinacea rose 140 per cent alone.
"This massive increase in consumer usage of medicinal products is a factor of increased advertising by major companies, positive press publicity, and the spin-off from the green, natural and organic sentiments in the community," Mr Chung said.
"Consumers are now driving this increased demand and acceptance for herbal products and this trend is expected to continue in the foreseeable future."
The greatest opportunities for Australian producers are likely to be in the non-food sectors of the flavour and fragrance industry, including medicinal herbs.
The report details possibilities in these markets including value-added opportunities, potential for growth, agronomic considerations, import substitution and favourable environmental climate.
But Mr Chung warned there were a number of important points that prospective growers and producers needed to consider including the importance of market establishment, quality control, the desirability of long-term agreements between producers and buyers/ processors and the unpredictability of the market.
The report Natural Plant Extracts – Export Opportunities in the USA is available from the internet at http://www.rirdc.gov.au/ reports/Index.htm#essentoils. Echinacea
Organic approach to food conference
In recognition of the growing importance of and interest in organic food production in Australia, the organic industry will next year stage its first national conference, led by RIRDC’s Organic sub-program.
The conference will be held at Darling Harbour in Sydney on 27 & 28 August 2001 and is expected to attract around 400 participants, including primary producers, research scientists, agribusiness representatives and government decision-makers,
Organisers have taken advantage of the enormous opportunity to hook into the Fine Food Australia exhibition, which is being held at Darling Harbour at the same time. Fine Food Australia showcases the latest innovations in food, drink and equipment.
This exhibition attracts 500 exhibitors from Australia and overseas, and is visited by more than 24,000 people from the hospitality industry including representative from supermarkets, convenience stores, restaurants, clubs, hotels and catering institutions.
An interesting and informative two-day program of speakers, business and plenary sessions will be held along side the food exhibition to help further unite the industry as it rises to the challenge of supplying the food and fibre of the future.
More information: Lisa Palu 026272 4404 (Monday’s only,) 0408 195 277 or email Lisa.Palu@rirdc.gov.au
RIRDC makes its research findings available through an active publishing program. There are more than 450 publications available from RIRDC. View and purchase them through our online catalogue.
Many full reports are also available free as downloadable pdf, rtf and MSWord6 documents.
Many
reports have been summarised in free RIRDC "Short
Reports".
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