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RURAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE
20/10/2010
AGRICULTURE, FISHERIES AND FORESTRY PORTFOLIO
Grains Research and Development Corporation

CHAIR —Welcome, gentlemen. How did we end up having you last? Did we put you up early in the list last time?

Mr Perrett —I had meetings in Canberra all day today.

CHAIR —So it is not our fault?

Mr Perrett —It is not your fault. We needed to be on in the evening.

CHAIR —Mr Perrett, I am very happy to hear that. Welcome, and to you too, Mr Reading.

Mr Reading —Thank you, Chairman.

CHAIR —Questions, Senator Nash.

Senator NASH —Thank you, Chair. I do reassure you that if you do not have meetings next time, Mr Perrett, we will try and get you further up the list.

Mr Perrett —Thank you.

Senator NASH —I really wanted to talk to you, as we have with some of the others, about this issue of the Productivity Commission draft report and what your response to that has been—whether you have put in a submission—and get your response to that today.

Mr Perrett —We will be putting in a submission to the Productivity Commission. We have not drafted that as yet. We have a large number of areas where we do agree with the recommendations of the Productivity Commission. But, obviously the main recommendation that we think is flawed would be where they purport to remove some of the funding which goes directly to the RDCs for the two areas that we would look at, which is government priorities and on-farm priorities, or our producer priorities. We would suggest that the government and producers get very good value from the money that they spend with GRDC and a lot of our impact analysis has shown that. A wide range of projects have been reviewed, both independently and also within GRDC, and we will continue to do that to satisfy ourselves as a board that we are getting value for the money that we invest.

There is a lot of discussion about public good, how you measure that, how you do not. Clearly, I have a view that you do get efficiencies where you invest in on-farm productivity that has a spin-off for public good and we certainly look to do a lot of that. If you look at a lot of the environmental work that we have done, there are certainly some significant public benefits. If you look at increasing productivity across the grains industry, there are certainly some major spin-offs for rural and regional Australia, but also the broader Australian economy.

Senator NASH —I would certainly agree with you there. On that public good, linking it across now to the Murray-Darling Basin plan guide and potentially there being less water to utilise in the basin, are you doing any work around utilising less water in terms of increased productivity and, if so, what are you doing in that space?

Mr Perrett —We have significant investments in what we would specify as water use efficiency in response to the—

Senator NASH —Thank you. It is very late in the day. That is exactly the term I was after. Sorry, go on.

Mr Perrett —Mr Reading can touch on that.

Mr Reading —We already spend specifically in that area about $4 million a year right across the board.

Senator NASH —Yes.

Mr Reading —Also, what is efficiency? We have done all the work in measuring the base: what farmers are getting now; the theoretical maximum in terms of millimetres of water per kilogram of grain produced. Seventy per cent of our work is somehow related to water use efficiency, whether it is genetics, whether it be farming practices.

Senator NASH —That would seem to be a very good reason to retain GRDC as they are, I would think. Anyway, I am obviously terribly worried, Dr O’Connell, seeing some of this funding just disappear out the door. Can you perhaps provide to the committee—I know you say about 70 per cent of the work—information on the work that you are doing on that water use efficiency, or certainly direct us to where it is obviously publicly available? If you could just alert the committee to that, because that is probably one of the key areas at the moment that we really need to look at—where the work is being done, where we can increase the productivity through water use efficiency, which we have been saying for some time now is the most appropriate way of doing it.

Mr Reading —We are happy to do that and also, as we have mentioned in previous discussions, the advances that have already been made—and the one we always quote is Western Australia. If you look at figures in 1969, the average in-season rainfall was 152 millimetres per season and the average yield was 400 kilos, and track that fast to 2006 and the average in-season rainfall has declined to 110 millimetres and the average yield now is over 990 kilos there. This has been ongoing for a long time and it is absolutely critical. The things that have contributed to that have been farming practices, in terms of minimum and reduced tillage et cetera, and now increasingly genetics are starting to play a role.

Senator NASH —Absolutely. Smart farmers. How many staff do you have in GRDC?

Mr Reading —Our establishment number is 54. We currently have 51.

Senator NASH —Across what range of areas do they operate?

Mr Reading —We have lines of business, and our key lines of business are farming practices, varieties, new grain products, communication and capacity building. Across that in the matrix we have our enabling functions which are corporate strategy and program support, and the admin functions, IT, HR et cetera.

Senator NASH —What would you see as your greatest challenges over the next 12 months? You are smiling, Mr Perrett.

Mr Perrett —There are always challenges and ways to—

Senator NASH —I mean that quite seriously. It is one thing to discuss where organisations such as yours are going well, but it is also very useful for the committee to understand what you see as challenges and what can be done to, I guess, meet those challenges.

Mr Perrett —Over the last 18 months or two years or more our managing director has been working very closely with the PISC agencies to put together a national R&D plan for the grains industry. That plan has been accepted by the PISC agencies and that is very pleasing to see. But it cannot be just an accepted plan; a lot of work will be needed over the next 12 months, two years, to continue to drive that, to implement that plan, to make sure we get the benefits that can flow from that. That is one of the major challenges for the GRDC—to work with the other agencies and make sure that that plan does deliver the benefits that would appear to accrue from the initial plan. That is one of the areas we will be working on.

Mr Reading —On that one, I think we have all put a lot of work into that. I think it can really set RD&E in this country off on some very exciting collaboration and cooperation together, and it is really about whether we have got the guts to do it. Another related issue is that obviously we have done a lot of work with ABARE on understanding why productivity has been declining—and that is a critical one.

Senator NASH —What form will that take, in terms of understanding? Will there be a report? Will there be a series of papers?

Mr Reading —Yes. We have done a lot of work in the past on understanding how productivity grew in the industry. The grains industry was the stand-out case. If you look at the average over the last 40 years, it has grown at 2.3 per cent per annum. However, when you look at it in the eighties and nineties, it was growing at about four per cent, and since then it has been growing at a much lower rate; it has averaged about 0.9 per cent. When you look at the factors, we know what drove it: the flowthrough of the impacts of the green revolution, grass herbicides, the development of farming practices. More critically, we know why it has turned down.

Obviously, the eighties and nineties were relatively wet decades; the last decade has been a very dry one. Obviously, there have been flowthrough impacts. One of things that ABARE has shown is in terms of public R&D investment, a critical one, and others with near-term technologies. We have had a lot of the easy wins. We are now facing much more complicated issues such as drought and frost and we are also waiting for the impact of the new biotechnologies as they come through.

So we understand it. Now the whole idea is to focus, as the chairman mentioned, through the national RD&E strategy, on really identifying and pulling our act together across the agencies and departments, and driving productivity. We have an ambitious plan in the national RD&E strategy of within 10 years growing at 2.5 per cent per annum, which we need to be doing because growers’ terms of trade are declining at two per cent real per year.

Senator NASH —Good to see you have lost none of your enthusiasm, Mr Reading, for this.

Mr Reading —Thank you.

Senator NASH —In terms of productivity, though, is there a point at which you will hit a ceiling because farmers simply cannot get any more efficient within the current available practices? Then something new will come along so it will step up again. I am thinking about what you were saying about going to minimum tillage and all those sorts of things. So when, on farm, you have moved to that point, you have taken advantage of all the available chemicals and everything else, is there a point where farmers simply cannot do anything else to improve the efficiency at that same incline that you would obviously have at the initial point?

Mr Perrett —There is so much that we need to learn and understand. There is so much technology that we have not thought of yet that will assist us.

Senator NASH —This is my point. Until that comes on stream—

Mr Perrett —If we look at some of the work that we are doing with soils, looking at subsoil constraints, we are continually learning more; we are continually learning ways in which we can improve. If I look at my own property, the increases we are having in varieties, looking at some of the new varieties that are coming through, there are gradual improvements all the time. I do not see a big massive jump that is going to happen tomorrow, but I see gradual improvements all the time. As we bring new technologies on, we will see gradual improvements.

That is what we have to work on. It is not one fix; it is putting together a package, a myriad of things. It is the varieties; it is the farming practices; it is disease resistance. It is putting all those sorts of things into the mix and making sure that we get the balance right. The really important thing is making sure that we get the information out to the farmers and making sure they have the skills and the technologies to take advantage of all of those things. That is absolutely critical in our work.

Senator NASH —That was my next question. How do you see at the moment the GRDC’s collaboration and communication with the farming community, because it is obviously a two-way street?

Mr Perrett —I see it as very good. I see it as improving continually. We have had some issues in the past where we have seen an emergence of what we call the ‘grower groups’—farming systems groups where growers are coming together. Our communication could have been better there, but it is an evolving world where we have seen extension offices from the state departments declining in the services that are provided there, so we are seeing others, such as the private consultants and the grower groups, stepping into the gap.

We have done a lot of work recently. Our manager of practices Steve Thomas has just put out a paper, which has been exceptionally well received by those grower groups, on how we can relate to them better, how we can assist them better, and how we can utilise their expertise to deliver some of that knowledge to farm groups. Once again, we do not do everything perfectly, but we are looking at where we are making mistakes—or where we can improve things, I should say—to make sure that we do do it better in the future.

Senator NASH —Thank you.

CHAIR —Gentlemen, thank you very much.

Mr Reading —Could I make one final comment?

CHAIR —Yes, Mr Reading.

Mr Reading —It is with mixed blessings or mixed emotions—I will not say which ones they are—that this will be my last Senate estimates since being brought in—I guess, dragged in—originally for a thing called ‘single vision’. It is a pity Senator O’Brien is not here—I would like to thank him personally. I would also like to thank, obviously, Senator Colbeck in his term as parliamentary secretary, Senator Sterle, and Senator Nash for one of the things we thought was an excellent suggestion which she supported. When we were having lots of discussions about plant breeding we recommended having another session with the committee and I think that was excellent in terms of being able to provide much more detailed information on specific subjects. Thanks very much.

CHAIR —Thank you, Mr Reading. To quote a Monty Python line, I could say, ‘You lucky, lucky ...’ but I will not. On behalf of the committee, we do wish you well in your future endeavours.

Mr Reading —Thank you.

Senator COLBECK —We were just saying what an effective and good manager of one of the RDCs you have been. So you have just turned the end of the day down for us actually. All the best, but sorry to see you go. Absolutely.

Dr O’Connell —Chair, we said we would try and table answers to questions that we have got. We have got seven here. Also, clarification for Senator Nash: we had said we understood that the peer review of the ABARE work was on the MDBA website. It is not. We will now see if we can get it provided to you.

Senator NASH —Thank you.

CHAIR —That is great, Dr O’Connell. Thank you and your officers for today. Minister, thank you very much. To the secretariat and her team, thank you kindly. Broadcasting and Hansard, once again a fantastic job; thank you very much. That concludes today’s hearing. The committee now stands adjourned.

Committee adjourned at 10.58 pm