Can rural RDCs survive another twenty-five years?

Australian Farming Institute's Mick Keogh views on the future of research

Farm Online News
Australian Farm Institute, executive director, Mick Keogh

Australian Farm Institute, executive director, Mick Keogh


Australian Farming Institute's Mick Keogh views on the future of research


AUSTRALIA’S internationally unique rural research and development corporation (RDC) model has been operational largely in its current form for the past 28 years.

There is probably an element of ‘familiarity breeding contempt’ in the current relationship between farmers and RDCs, as few farmers can remember the previous landscape or imagine what the agricultural research and development (R and D) environment would be like in Australia in the absence of RDCs.

Consequently, there is probably a tendency for farmers to downplay the benefits derived from RDCs, and to focus instead on any deficiencies.

Likewise, the RDCs may be tempted to take for granted that levy-payers will always support them.

It is easy to forget the changes that have occurred since RDCs were first established in 1989 under the Primary Industries and Energy Research and Development Act.

Then, the various state Departments of Agriculture had relatively strong research and extension resources.

In addition, the CSIRO had a much larger rural R and D portfolio. University agriculture faculties were relatively well-resourced, and had deep industry connections.

However, over the past 25 years the value of real (inflation-adjusted) resources received from government by all these organisations has declined considerably.

In contrast, the real level of funding of the rural RDCs has been maintained, as have matching Australian Government contributions.

Consequently, the various state Departments of Agriculture, the Universities and the CSIRO have become increasingly reliant on RDC funding for their agricultural R and D activities – something that is easily overlooked when considering the Australian agricultural R and D landscape.

This changing historical context is important to keep in mind when contemplating what needs to happen to ensure the RDCs continue to deliver value for the sector over the next quarter-century, specifically in relation to R and D.

It is logical to assume that change will continue.

Farm business models will further diversify while farms will increase in size and reduce in number.

Public-sector agricultural agencies will struggle for resources while private sector agribusiness corporations will become more significant in agricultural R and D.

And digital technology will become all-important.

Governments and consumers will continue to make ever-increasing demands to improve product quality, animal welfare and biosecurity outcomes and reduce environmental impacts.

How RDCs respond to these changes will largely determine their survival in the future.

The major imperative for RDCs will obviously be to maintain the strong support of levy- payers.

A group that will, of necessity, be increasingly business-oriented and objective in scrutinising the use to which their hard-earned dollars are put.

Farm businesses are much less homogenous than when RDC’s were first established and will continue to diversify over the next 25 years, meaning that RDC’s will have more disparate groups to satisfy.

They will require more straightforward, simplified and clear reporting from RDCs about the returns their R and D levy dollars are generating.

This should include information detailing the nature and value of the R and D portfolio being funded (whether basic, applied or commercial development R and D), and the amount of funding allocated to public good research or to maintain research capacity.

It should also detail the desired R and D outcomes, and the estimated value that will be returned to the industry if the R and D is successful.

This reporting should also include some key performance metrics for the RDCs. 

These should include administrative and overhead costs, staff numbers, proportion of successful and unsuccessful projects, commercialisation outcomes, collaboration projects with other RDCs, joint venture projects with the private sector and any other relevant data.

Perhaps equally as important is the need for RDCs to collectively agree on these reporting metrics, so there is a common reporting standard across all 15 RDCs now in operation.

This is not to enable a “Hunger Games”-type competition to see which RDC ‘wins’, but rather to provide standardised measures that can be tracked over time to judge trends in the performance of individual RDCs, and to make logical decisions about their continuing value.

It is somewhat ironic that many of the RDCs encourage their farmer levy-payers to get involved in benchmarking groups so they can track and improve their farm performance, yet do not apply this same logic to their own performance.

When it comes to the periodic reviews of RDCs that are required as part of a vote on future levies, there is a need for greater objectivity and independence.

Too often, this is an ‘in-house’ exercise that seems designed to produce a predetermined outcome, rather than a truly objective evaluation.

The appointment of an independent external panel with adequate resources to commission a proper evaluation of RDC performance and report objectively to levy-payers should be a minimum requirement, well in advance of any vote by levy-payers.

While implementing these performance and reporting processes may cause some unease for the RDCs, their future success depends very heavily on the support of levy-payers.

This level of transparency is simply a normal professional expectation, equivalent to that required of a listed company by its shareholders.

Undertaking measures to enhance the trust and support of levy-payers will create a very firm foundation for the future of the RDCs over the next 25 years, allowing them to continue to play a very important role in Australia’s agricultural development.

Mick Keogh is the executive director of the Australian Farm Institute.


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