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Rural and Regional Affairs and Transport Legislation Committee
18/10/2016
Estimates
AGRICULTURE AND WATER RESOURCES PORTFOLIO
Cotton Research and Development Corporation

Cotton Research and Development Corporation

[10:56]

CHAIR: Mr Finney and Mr Tolson, welcome to our committee.

Senator GALLACHER: This is in relation to the APVMA. As an aside, I drove over the Hay plains recently and saw the amazing amount of cotton that is being grown and blown across the road and that. Does the CRDC have concerns about a loss of expertise, in this area, if it shifts to Armidale? Is it going to impact on your viability?

Mr Finney : We do not have any current research projects with the APVMA. That is really a matter for our peak body, in terms of its consultation on matters regarding chemicals and biotechnology.

Senator GALLACHER: Has your peak body raised, potentially, any threats to your viability as an industry?

Mr Finney : I am not aware of their discussions, sorry.

Senator GALLACHER: So it is all business as normal.

Mr Finney : For us, our focus on R&D goes well.

Senator GALLACHER: How often do you have a project in that area?

Mr Finney : From time to time we might be called upon to help with permits. I know the rural industry's RDC has played a significant role in facilitating permits, and the department has a program at the moment to facilitate that. At the moment, we are not participating.

Senator GALLACHER: So there are no current or ongoing threats to your organisation.

Mr Finney : Not from a research perspective.

Senator GALLACHER: What about from an approval perspective?

Mr Finney : It would be best to leave that to the department or others to comment upon. It is outside of our relationship.

Proceedings suspended from 10:59 to 11:18

Senator BACK: Mr Finney, what research have you done on the reduced use of water and the reduced use of pesticides in cotton production?

Mr Finney : We have been doing research in those areas for some 25 years. Through that research effort we have been able to improve water use efficiency by some 40 per cent—not only through growing the yield of cotton to three times the world average but also by achieving remarkable improvements in irrigation efficiency on farm. That is what has contributed to that significant improvement in water use efficiency in the Australian cotton industry. In the pesticide area we have done a lot of research into integrated pest management and the development of biotechnology traits to stop the industry's major pest, a helicoverpa grub. We have been able to reduce pesticide use by some 90 per cent. It is a remarkable story of achievement based on that research.

Senator BACK: I have dobbed you in! I met with the speaker of the parliament of Azerbaijan two weeks ago in Baku. For whatever reason we got into a discussion about cotton production, which is quite important for them, and I mentioned that your industry had achieved these tremendous outcomes. They are going to be in Canberra tomorrow, so it is likely, Mr Quinlivan, that there might be a request through you for further information. Quite seriously, those are their two big problems: pesticide use and water use. Now can you tell us the basis on which levies are charged, the proportion of your overall spend that comes from levies and the proportion that is government money? Can you also tell us about the transparency of that whole process, please?

Mr Finney : A levy is raised for R&D on every bale of cotton that is produced.

Senator BACK: Each bale?

Mr Finney : Yes, each bale that is processed at a cotton gin, so it is 227 kilograms of lint cotton that has had the seed removed. We invest in the order of $20 million a year in research—a portfolio of some 250 research projects. We receive advice from—

Senator BACK: Before you go on, how is the $20 million made up? What is the industry contribution and what is the government's?

Mr Finney : It is matched: fifty-fifty.

Senator BACK: The funds actually go to the department?

Mr Finney : Yes. We have a significant partnership with the growers through our peak body—Cotton Australia—and advisory panel members. A recent survey of cotton growers, to which 35 per cent of the industry responded, showed that 99.6 per cent of growers knew of CRDC, 88 per cent supported our investments in R&D, and 74 per cent have input to the research direction in which we invest. Of the 26 per cent who did not respond that they had a say in CRDC investment, half of them said that they did not seek a voice—that they were happy with what was being done.

Senator BACK: Where is the next challenge? What is industry telling you about where your further funds should go? You have already racked up those achievements in pesticides and water use. Where is your next challenge?

Mr Finney : In the short term, there are some very immediate issues with threats from disease. We are addressing that through a doubling of investment. That is a key immediate issue. Next, over a 5-year to 10-year term, is digital agriculture. There is a significant opportunity for Australian agriculture in this area, and one we are proud to lead through a rural R&D for-profit program with the 15 other RDCs that was announced in round 2. We are seeking to create a foundation of knowledge about access to data, access rights and ownership rights, and to address the telecommunications challenges that come with moving data. It is a really fundamental project for the future of agriculture. We can see the opportunity to drive yield increases from where we are now to four times the world average if we can move from managing at a field level to managing every plant with sensors and data. We think that is quite possible within the next five or ten years.

Senator BACK: Are you looking at new geographic areas in Australia for the cotton industry?

Mr Finney : The growth that has been occurring in the south has been remarkable. I know there is a trial strip of cotton going in at Karnak in western Victoria this year. There have been commercial trials at Mildura.

Senator BACK: On irrigation?

Mr Finney : Yes. We are expecting significant growth in dryland production in areas north of Emerald and Clermont and east of the Namoi Valley—back across towards Scone and Warialda.

Senator RICE: Where are the offices of the CRDC?

Mr Finney : We are based in Narrabri in north-west New South Wales.

Senator RICE: Have you always been there?

Mr Finney : Yes, since inception in 1990.

Senator RICE: How many staff do you have there?

Mr Finney : We have 13.8 FTE.

Senator RICE: We have been asking the other RDCs about decentralisation. In that context, what has been your experience of being based in Narrabri?

Mr Finney : We find it to be a significant advantage to our work, particularly for the relationship with our growers. Obviously cotton is not produced everywhere in Australia, but we are centrally located to 13 cotton-growing regions from Emerald through to northern Victoria. We also have a staff member in Toowoomba and one in Emerald. We co-invest with a number of other industry partners and commercial partners in extension and have a team of some 20-odd extension people who engage with growers on a day-to-day basis. Being in Narrabri is a great help for us in our activity and in understanding growers' needs.

Senator RICE: Is cotton unusual compared with other agricultural commodities in being so geographically focused?

Mr Finney : It is unique in the sense that it is not in every part of Australia. We do not, as an organisation, do marketing, so we do not have that function. Yes, it is a small community really, of some 1,200 cotton growers, so it is easier for us to work with that industry and they are a very united industry. If your industry is well organised, I think that certainly makes it much easier for an RDC to be effective.

Senator RICE: How much travel do your staff do from Narrabri to Canberra?

Mr Finney : On occasion. I have not actually calculated the number of times I have travelled to Canberra, other than for Senate estimates three times a year. I would have to take that one on notice.

Senator RICE: If you could take it on notice. Do you have trips to Canberra to meet with bureaucrats or to meet with the minister? How frequently do you do that and what is the cost to the organisation that Canberra travel entails?

Mr Finney : The trips are infrequent. We would enjoy a meeting every few months in Canberra with other RDCs or with the department, not necessarily with the minister.

CHAIR: I am really interested in your location in Narrabri. We have heard from a number of organisations today who are in decentralisation mode. So far, largely, their experience has been positive, and so has the feedback from their members or, in this case, their growers. Let me ask the question in reverse: if you were to announce tomorrow that you were closing your office in Narrabri and moving to Canberra, what sort of reaction would you anticipate from your grower groups?

Mr Finney : I do not anticipate they would be supportive of that, given our services are particularly around R&D and regionally located. The business case for moving to Canberra is not obvious. We would consider moving to other locations if we found it problematic to continue our services because of inability to attract the right people. When you look to the future, the new skill sets are around digital agriculture and other science platforms. That would be the basis for when we would potentially look to a change in location.

CHAIR: Have you been involved directly in the industry yourself as a grower?

Mr Finney : Yes. I was involved for some 20 years in the production of cotton and agronomy of cotton as well as other crops.

CHAIR: Not being specific about your industry or any other industry, is it fair to say that you have had decades in and about the bush with people in agriculture and primary production?

Mr Finney : That is correct. Our whole team has extensive experience in working with rural industries.

CHAIR: Over that time, casting your mind back to the extent you can, would it be fair to say that, as perennial as the daisies in the desert country, people have raised the decentralisation of government services away from the capital hubs—Canberra, Sydney, Melbourne and so on—and into the bush, into provincial Australia?

Mr Finney : I am aware that it has been a theme over the period, yes.

CHAIR: If you were to develop further sites for your organisation—apart from, perhaps, any special need to engage with government—would it be likely that they, too, would be in regional or provincial centres?

Mr Finney : I still think, even if we are looking for new skills in digital agriculture, that can be in a regional basis. It does not consume all our service needs, but I anticipate it is going to be a large part of our future. In answer to your question, yes.

CHAIR: I do not want to labour on my next couple of questions, because this committee has already decided to conduct an inquiry into one particular aspect of the use of technology and innovation with drones. Has your group been contemplating the introduction of these technologies and what challenges and benefits it might bring to cotton in particular?

Mr Finney : Very much so. In our current strategic plan we identified the rise of digital agriculture, including drones and robots, new sensor technologies and data analytics. We saw all these things coming and we have been working towards understanding how we can bring new services to growers—not necessarily inventing them ourselves, because there are large commercial investments in this area globally. The drones are a component of a system. We get excited about individual things, whether they are robotics or drones, but we are really about the whole system. They are an important component of that. There is a significant level of research and commercial activity in this space, which is to be applauded.

CHAIR: The Senate passed legislation that gives the ability for an organisation like yours to know who levy payers are. Would that extend to the types of people where you would levy this on a bale of cotton?

Mr Finney : Yes. We are very positive about the opportunity to grow our database and awareness of cotton producers. As much as we have volatility from season to season, we do have a regular cohort of producers. We have a database now, but we anticipate that would add significant value to our communications efforts and would be something that is seen positively by the industry.

CHAIR: Do you see that this will bring new capacity to you—this direct and instant engagement with people in the industry?

Mr Finney : I think it would enhance our efforts. Based on our feedback from growers already, there is always room to improve, but I do not think it is going to be transformational for us.

Senator CAROL BROWN: Is access to innovative agvet chemicals a major need for your growers?

Mr Finney : As I answered previously, it is from time to time in terms of minor-use permits. Certainly the chemical usage to control minor pests is still a significant matter for our industry. That is dealt with commercially and through our peak body, Cotton Australia.

Senator CAROL BROWN: You answered some of these questions earlier. Is the impact of the relocation of the APVMA not a concern?

Mr Finney : I have no visibility of the potential impacts of that and what that might mean for our industry. As I said, we do not have any research projects with the APVMA, so I am not able to provide you with any comment.

Senator CAROL BROWN: Do you have a board, Mr Finney?

Mr Finney : Yes, we do have board.

Senator CAROL BROWN: So has the issue of the APVMA relocation been raised?

Mr Finney : No.

Senator CAROL BROWN: Thank you.

CHAIR: It would seem that we have dealt with the Cotton Research and Development Corporation. Mr Finney and Mr Tolson, thank you for your attendance and engagement. We wish you a safe journey back home to families, if that is where your destination is. There has been a change in the schedule. We will now deal with the Australian Grape and Wine Authority.