Grains Research and Development

Corporation

Annual Operational Plan 2014–15

The Grains Research and Development Corporation is a statutory authority established to plan and invest in research, development and extension (RD&E) for the Australian grains industry.

Its primary objective is to drive the discovery, development and delivery of world-class innovation to enhance the productivity, profitability and sustainability of Australian grain growers and benefit the industry and the wider community.

Its primary business activity is the allocation and management of investment in grains RD&E.

GRDC VISIONA profitable and sustainable Australian grains industry, valued by the wider community.

GRDC MISSIONCreate value by driving the discovery, development and delivery of world-class innovation in the Australian grains industry.

GRDC VALUESWe are committed and passionate about the Australian grains industry.

We value creativity and innovation.

We build strong relationships and partnerships based on mutual trust and respect.

We act ethically and with integrity.

We are transparent and accountable to our stakeholders.

ContentsExecutive summary.........................................................................................................................................2

The GRDC....................................................................................................................................................2

Investment strategy......................................................................................................................................2

Annual operational plan................................................................................................................................4

Performance ................................................................................................................................................4

Income and expenditure ..............................................................................................................................4

1 The GRDC....................................................................................................................................................5Purpose........................................................................................................................................................5

Legislation....................................................................................................................................................5

Funding........................................................................................................................................................5

Structure.......................................................................................................................................................5

Relationships................................................................................................................................................7

Planning and reporting.................................................................................................................................9

2 Investment approach................................................................................................................................10Business environment................................................................................................................................10

Strategy......................................................................................................................................................11

Priorities......................................................................................................................................................12

Process.......................................................................................................................................................14

Communication and extension...................................................................................................................16

Evaluation...................................................................................................................................................16

3 Goals and performance measures .........................................................................................................17Investment themes.....................................................................................................................................17

Theme 1—Meeting market requirements...............................................................................................17

Theme 2—Improving crop yield.............................................................................................................20

Theme 3—Protecting your crop.............................................................................................................23

Theme 4—Advancing profitable farming systems..................................................................................26

Theme 5—Improving your farm resource base......................................................................................29

Theme 6—Building skills and capacity...................................................................................................32

Cross-theme investments.......................................................................................................................34

Enabling business functions.......................................................................................................................35

Corporate objectives...................................................................................................................................38

4 Estimated income and expenditure........................................................................................................39Income........................................................................................................................................................39

Expenditure................................................................................................................................................39

Reserves....................................................................................................................................................41

Payments to Grain Producers Australia.....................................................................................................41

Expenditure to meet Australian Government research priorities................................................................41

Executive summaryThe GRDCThe Grains Research and Development Corporation (GRDC) is a statutory authority established to invest in R&D and related activities to benefit the Australian grains industry and the wider Australian community. Because effective delivery is critical to achieving benefits of R&D outcomes, the GRDC invests in research, development and extension (RD&E) activities.

The GRDC’s primary objective is to drive the discovery, development and delivery of world-class innovation to enhance the productivity, profitability and sustainability of Australian grain growers and benefit the industry and the wider community.

The GRDC is principally funded by an industry levy and Australian Government contributions. Its investment portfolio covers 25 leviable crops, spanning temperate and tropical cereals, coarse grains, pulses and oilseeds.

A board of directors governs the GRDC, while the corporation’s business activities are led by the Senior Leadership Group. Regional and national advisory panels—comprising grain growers, agribusiness practitioners, scientists and the GRDC’s executive managers—advise the GRDC Board on RD&E priorities, and provide an effective interface with stakeholders.

The GRDC’s investment activities are managed across three operational business groups: Research Programs, Commercial, and Regional Grower Services. The operational business groups are supported by the enabling functions of the Corporate Services business group and the Strategy unit.

Part 1 of this document provides more information on the GRDC’s role, funding, structure and way of doing business.

Investment strategyThe GRDC’s Strategic R&D Plan 2012–17 provides a template to ensure that the GRDC will invest in RD&E in a sustainable manner, balancing long-term and short-term, high-risk and low-risk, and strategic and adaptive research needs, over the five years from July 2012 to June 2017.

The five-year strategy is informed by consultation with grain growers, representatives of government and research partners, and other relevant stakeholders. The plan embraces the principles, strategies and implementation plan set out in the Grains Industry National Research, Development and Extension Strategy, and integrates them with the identified priorities of Australian grain growers and the Australian Government.

The Grains Industry National Research, Development and Extension Strategy is one of more than 20 industry sector and cross-sectoral strategies devised under the National Primary Industries RD&E Framework to improve the efficiency and effectiveness of RD&E capability by strengthening collaboration and coordination between the Australian Government, state governments, research institutions and industry. The GRDC’s Strategic R&D Plan 2012–17 also takes into account the priorities of other cross-sectoral research strategies in areas with relevance to the grains industry—for example, climate change; water use in agriculture; soils; and plant biosecurity.

The Australian Government’s key priorities for rural RD&E are set out in its Strategic Research Priorities and Rural R&D Priorities. The government’s National Innovation Priorities are also relevant to grains industry RD&E.

The outcomes of the Strategic R&D Plan 2012–17 are delivered through five corporate strategies:

Create value

Coordinate nationally

Deliver regionally

Connect globally

Engage with growers and industry.

Those strategies are integrated with stakeholders’ RD&E priorities through six themes for RD&E investment:

1. Meeting market requirements

2. Improving crop yield

3. Protecting your crop

4. Advancing profitable farming systems

5. Improving your farm resource base

6. Building skills and capacity.

Part 2 of this document provides more information on the Strategic R&D Plan 2012–17 and the GRDC’s approach to RD&E investment.

Figure 1 provides an overview of the relationships between government and industry priorities, the GRDC’s investment themes and corporate strategies, and the GRDC’s outcome and vision.

Figure 1: GRDC performance frameworkGovernment and industry objectives

Australian Government priorities Industry priorities

Primary Industries Research and Development Act 1989

Strategic Research Priorities

Rural R&D Priorities

Grains Industry National Research, Development and Extension Strategy

Industry priorities

Increased economic, environmental and social benefits to members of primary industries and to the community in general by improving the production, processing, storage, transport or marketing of grain.

Sustainable use and management of natural resources.

More effective use of the resources and skills of the community in general and the scientific community in particular.

Development of scientific and technical capacity.

Development of the adoptive capacity of grain growers.

Improved accountability for expenditure on R&D activities.

Living in a changing environment.

Promoting population health and wellbeing.

Managing our food and water assets.

Securing Australia’s place in a changing world.

Lifting productivity and economic growth.

Productivity and adding value.

Supply chain and markets.

Climate variability and climate change.

Biosecurity.

Innovation skills.

Technology.

Improved processes to build on existing national collaboration.

Effective relationship models for private–public coexistence.

National research programs, national centres of research capacity and regional networks of applied RD&E under the ‘major-support-link’ framework.

National capability planning for human and physical infrastructure.

Better and ongoing alignment of stakeholder priorities and RD&E resource allocation.

Meeting market requirements.

Improving crop yield.

Protecting your crop.

Advancing profitable farming systems.

Improving your farm resource base.

Building skills and capacity.

GRDC RD&E investment themes

1 Meeting market requirements

2 Improving crop yield

3 Protecting your crop 4 Advancing profitable farming systems

5 Improving your farm resource base

6 Building skills and capacity

Intermediate outcomes(5 years)

Understanding market opportunities for Australian grain.

Crop and variety selection aligned with market requirements.

Crop production aligned with market requirements.

Grain harvest and storage practices aligned with market requirements.

Genetic yield potential and stability improvement of cereal varieties.

Genetic yield potential and stability improvement of pulse varieties.

Genetic yield potential and stability improvement of canola varieties.

Effective, sustainable and efficient management of weeds.

Effective, sustainable and efficient management of vertebrate and invertebrate pests.

Effective, sustainable and efficient management of cereal rusts.

Effective, sustainable and efficient management of cereal (non-rust), pulse and oilseed fungal pathogens.

Effective, sustainable and efficient management of nematodes.

Effective, sustainable and efficient management of viruses and bacteria

Biosecurity and pesticide stewardship.

Knowing what is important (key business drivers).

Planning strategically (building system benefits and rotations).

Responding tactically (individual crop agronomy).

Understanding and adapting to climate variability.

Improving soil health.

Managing water use on dryland and irrigated grain farms.

Understanding and valuing biodiversity.

Communication of sustainable production methods.

Grains industry leadership and communication.

Capacity building in the extension sector.

Capacity building in the R&D sector.

Capacity building for grain growers.

Aspirational outcomes(10+ years)

Australian grain growers maintain and increase access to current and future grain markets by aligning on-farm production practices with quality and functionality requirements.

Cereal, pulse and oilseed varieties with significant, sustained and stable improvements in water-limited yield potential over current elite varieties in key agroecological zones and across a range of seasons.

Australian grain growers managing their farms to maximise profit and reduce risk by adopting effective control of weeds, pests and diseases.

Australian grain growers managing farming systems that are able to respond and adapt to changing environment and market conditions to reduce risk and deliver an increase in profitability.

Grain growers valued for adopting practices that improve regional habitat, soil, water and atmosphere resources in a changing climate.

A dynamic Australian grains industry with the skills and capacity to continuously innovate.

GRDC corporate strategies

Create value Coordinate nationally Deliver regionally Connect globally Engage with growers and industry

GRDC Outcome

Australian grain growers utilising new information and products that enhance the productivity, profitability and sustainability of growers and benefit the grains industry and wider community.

GRDC Vision A profitable and sustainable Australian grains industry, valued by the wider community.

Annual operational planEach year, the GRDC undertakes a thorough process of consultation to identify potential investments that address the current RD&E priorities of the grains industry in each region and satisfy the GRDC’s strategic R&D objectives. That process, along with a review of the business environment and the progress of ongoing investments, shapes the RD&E investment portfolio for the following year. The result is an annual operational plan that sets out detailed investment priorities and performance measures.

This annual operational plan covers RD&E investment in 2014–15, the third year of the implementation of the Strategic R&D Plan 2012–17.

Part 2 of this document describes the GRDC’s strategic approach to investing in RD&E. This includes an overview of key factors likely to influence the business environment of the Australian grains industry in 2014–15. It also provides details of the RD&E priorities of the grains industry and government, and the process through which GRDC investments are designed to address them and deliver benefits to the wider Australian community.

Part 3 specifies the planned investments and performance measures for each investment theme, as well as objectives and performance indicators for the enabling functions and the corporation as a whole.

Performance The GRDC continually monitors its progress against the key performance indicators in the strategic R&D plan and the annual operational plan, and evaluates its effectiveness in delivering benefits to the Australian grains industry and the wider community.

Part 1 of this document describes the elements of the GRDC’s approach to reporting its performance to stakeholders, including through the annual report, the growers’ report and other publications. Part 2 describes how the GRDC’s performance is evaluated, while Part 3 sets out performance measures for 2014–15.

Income and expenditure The GRDC’s total income in 2014–15 is forecast to be $187.3 million, consisting of:

Australian Government contributions of $68.9 million

levy contributions from grain growers of $104.7 million

grants totalling $0.7 million

other income, including interest and royalties, of $13.0 million.

For 2014–15, the GRDC Board has approved an annual operating expenditure of $213.1 million (which is an increase of approximately 12.0 percent compared to the 2013–14 expenditure budget).

The GRDC is estimating an operating loss in 2014–15. This loss will be funded by the GRDC’s accumulated financial reserves.

Part 4 of this document provides details of the estimates of GRDC income and expenditure for 2014–15. The figures are indicative only. Changes in the GRDC’s operating environment may require the corporation to vary the total expenditure or specific allocations to secure its objectives.

1 The GRDCPurposeThe Grains Research and Development Corporation (GRDC) exists to drive the discovery, development and delivery of world-class innovation to enhance the productivity, profitability and sustainability of Australian grain growers and benefit the grains industry and the wider community.

The GRDC invests in research, development and extension (RD&E) and related activities across a portfolio spanning temperate and tropical cereals, coarse grains, pulses and oilseeds. This involves coordinating and funding activities; monitoring, evaluating and reporting on their impact; and facilitating the dissemination, adoption and commercialisation of their results.

The GRDC does not undertake R&D itself. Rather, it relies on other organisations that have the necessary capabilities to undertake the specialised work. As an investor in RD&E, the GRDC often partners with co-funding organisations, many of which also provide RD&E services.

The GRDC also contributes to the development of strategic national approaches to grains industry RD&E, to reduce fragmentation and duplication, and to help address industry-wide issues such as biosecurity and climate variability.

While its focus is on delivering benefits to its primary stakeholders, Australian grain growers, the GRDC also generates outcomes from investing in RD&E that benefit other participants in the Australian grains industry value chain and the wider Australian community, as well as the research community in Australia and overseas.

As part of the Australian Government’s Agriculture Portfolio, the GRDC delivers one outcome towards the portfolio’s goal of achieving more sustainable, profitable and competitive Australian agriculture, food, fisheries and forestry industries:

New information and products that enhance the productivity, competitiveness and environmental sustainability of Australian grain growers and benefit the industry and wider community, through planning, managing and implementing investments in grains research and development.

LegislationThe GRDC was established in 1990, under the then Primary Industries and Energy Research and Development Act 1989. As a result of amendments made in December 2013, that Act is now known as the Primary Industries Research and Development Act 1989.

The Primary Industries Research and Development Act provides for the funding and administration of primary industries R&D to:

increase the economic, environmental and social benefits to members of primary industries and to the community in general by improving the production, processing, storage, transport or marketing of the products of primary industries

achieve sustainable use and management of natural resources

make more effective use of the resources and skills of the community in general and the scientific community in particular

support the development of scientific and technical capacity

develop the adoptive capacity of primary producers

improve accountability for expenditure on R&D activities in relation to primary industries.

The GRDC’s management as a statutory corporation is subject to requirements of the Commonwealth Authorities and Companies Act 1997. From 1 July 2014, the Commonwealth Authorities and Companies Act will be repealed and replaced by the Public Governance, Performance and Accountability Act 2013.

FundingThe GRDC is principally funded by a grower levy and Australian Government contributions.

The levy is based on the net farm gate value of the annual production of 25 crops: wheat; coarse grains—barley, oats, sorghum, maize, triticale, millets/panicums, cereal rye and canary seed; pulses—lupins, field peas, chickpeas, faba beans, vetch, peanuts, mung beans, navy beans, pigeon peas, cowpeas and lentils; and oilseeds—canola, sunflower, soybean, safflower and linseed.

The Australian Government matches the levy up to a limit of 0.5 percent of the three-year rolling average of the gross value of

production of the 25 leviable crops.

Other sources, including interest, royalties and grants, contribute a small proportion of the GRDC’s income.

StructureThe GRDC’s operations are tailored to most effectively apply the organisation’s resources to achieve its outcomes. Through the GRDC structure, the strengths of the GRDC’s highly committed staff are enhanced by the depth of experience of its directors and the diverse knowledge and skills of its advisory panel members. All aspects of the GRDC’s performance and accountability are underpinned by robust corporate governance policies and practices.

Figure 2 sets out the organisational structure of the GRDC.

Figure 2: Organisational structure

Business groupsThe GRDC’s three operational business groups—Research Programs, Commercial, and Regional Grower Services—oversee and manage investments to achieve the outcomes determined under the GRDC’s six investment themes. The operational business groups are supported by the enabling business functions of the Corporate Services business group and the Strategy unit.

PanelsThe GRDC utilises the expertise of growers, advisers and researchers through its advisory panels: three regional panels, one aligned to each of the three grain-growing regions, and an overarching National Panel. The purpose of the advisory panels is to ensure that GRDC investments are directed towards the interests of all GRDC stakeholders and aligned with at least one of the GRDC’s six investment themes.

The GRDC Board makes decisions with the support of the National Panel, which is informed by the knowledge and experience of the three regional panels and the GRDC executive.

Regional panels

The three regional advisory panels, covering the northern, southern and western grain-growing regions of Australia, are composed of grain growers, agribusiness representatives, researchers and the GRDC executive managers, with provision for other industry experts to participate as appropriate. Panel members (other than GRDC executive managers) are contracted to carry out their roles and are not employees of the GRDC.

The regional panels develop and monitor local and regional investment priorities, identify investments that respond to the national priorities of grain growers and the Australian Government, and make recommendations to the National Panel. They work closely with grower groups and organisations, including Regional Cropping Solutions networks, in their regions.

Regional panels interact with growers, agribusiness people, researchers and other participants in the grains value chain in order to learn of emerging issues and discuss industry developments and priorities for future RD&E. They also make sure that GRDC investments are responding to local and regional needs, and that RD&E outputs are being delivered in the most effective manner to promote rapid adoption.

The regional panel members’ in-depth understanding of local needs and priorities, complemented by their knowledge of the GRDC’s investment portfolio, makes them an integral part of ensuring that GRDC investments deliver benefits regionally and locally.

National Panel

The National Panel comprises the three regional panel chairs, the GRDC’s Managing Director and the GRDC’s executive managers.

The National Panel:

considers national RD&E priorities across the GRDC’s investment portfolio, takes advice from regional panels, staff and external experts, and advances recommendations on investments to the Board

assists the Board to maintain links with grain growers, the Australian Government, state and territory governments and research partners

plays a significant role in assessing future regional requirements in RD&E capacity, and in ensuring that they are met.

Board The GRDC’s board of directors, headed by the Chair, oversees corporate governance, sets strategic direction and monitors the performance of the GRDC and the Managing Director.

The GRDC Board has combined expertise in business management strategy; corporate governance; commodity production, processing and marketing; finance; risk management; management and conservation of natural resources and the environment; R&D administration; science, technology and technology transfer; intellectual property management; and public administration.

Senior Leadership GroupThe GRDC’s Senior Leadership Group is composed of the Managing Director and the executive managers of the operational business groups and enabling business functions.

The Senior Leadership Group leads the GRDC’s business activities and advises the GRDC Board. It is responsible for implementing strategy, and for managing and evaluating the GRDC and its investments in RD&E.

RelationshipsThe GRDC works closely with Australian grain growers and the Australian Government, to ensure that their RD&E priorities are effectively addressed through GRDC investments. The GRDC also maintains strong relationships with its other stakeholders, particularly in the R&D and agribusiness sectors.

The GRDC collaborates with other Australian organisations to deliver greater benefits to grain growers. Effective partnerships enable the GRDC to leverage resources and research capability; share market knowledge, technologies and intellectual property; and reduce the risk associated with particular investments.

The GRDC also builds strong relationships with organisations overseas, both to broaden the resources available to the Australian grains industry and to access international RD&E efforts that offer potential benefits, such as food security, for the wider Australian community.

CommunicationThe GRDC continually seeks to enhance communication exchange to and from the corporation, to assist stakeholders to adopt new uses and sources of timely, relevant grains information. The curation and integration of effective information sources for growers is a key priority. Mechanisms that are growing in importance include online integrated information packages, such as GrowNotes, and the GRDC’s social media presence.

New tools add value to existing mechanisms such as the GRDC’s Regional Cropping Solutions networks, which provide essential on-the-ground linkages between growers, farming systems groups, agribusiness and researchers. These networks and their appointed facilitators link growers’ local RD&E needs with the nation’s agricultural researchers in a streamlined, targeted and responsive way, in harmony with the Grains Industry National Research, Development and Extension Strategy, and enable the GRDC, through its regional panels, to proactively respond to regional issues in a timely manner. The Grower Solutions Groups in the Northern Region play a similar role.

Direct communication with growers and their advisers is also facilitated by the GRDC’s advisory panels and managers of grower services in the Northern, Southern and Western regions.

The GRDC also exchanges information and ideas with growers through Grain Producers Australia (GPA), the grains industry’s representative organisation as defined under the Primary Industries Research and Development Act 1989, and a wide range of representative bodies such as farming systems groups and state farmers’ organisations. Representative groups for particular industry sectors also liaise with the GRDC, through the National Agribusiness Reference Group.

The GRDC works closely with its portfolio department, the Department of Agriculture, and interacts with various federal and state government agencies. The Primary Industries Standing Committee of the Primary Industries Ministerial Council, in which the GRDC participates, provides a key conduit for liaison with government agencies as well as CSIRO and the university sector.

Other opportunities to communicate with the GRDC include:

personal contact, through field days, forums, conferences and other activities

education and training channels, such as the GRDC Grower Updates, GRDC Adviser Updates, GRDC-supported conferences and technical workshops

GRDC stakeholder surveys

GRDC smartphone and tablet applications

the GRDC website and YouTube channel.

The GRDC also conducts roadshows to ensure industry partners and other interested parties are well informed about new developments, initiatives and processes conducted by the corporation.

CollaborationCollaboration is at the heart of the GRDC’s approach to adding value to the Australian grains industry. The majority of the GRDC’s investment in RD&E is with partners that co-fund the work and conduct many of the activities. Examples include government agencies; cooperative research centres, universities and other research organisations, including rural R&D corporations; commercial plant breeders and seed companies; agricultural companies and advisers; and grain marketers, exporters and end-users.

Australia’s R&D investment is only a small part of the global effort, so the GRDC collaborates with public and private research organisations overseas to access new technologies and intellectual property that would otherwise be unavailable to Australia. As the largest single Australian investor in broadacre agricultural RD&E, the GRDC is well placed to build links between the Australian research sector and the best research being undertaken around the world. Notable examples include the GRDC’s longstanding strategic alliances with the International Maize and Wheat Improvement Center (CIMMYT), the International Center for Agricultural Research in the Dry Areas (ICARDA) and the International Crop Research Institute for the Semi-Arid Tropics (ICRISAT).

Commercial partnershipsWhile the GRDC is a major investor in the development of new technologies benefitting Australian growers, most GRDC investments are made with one or more partners. Historically, GRDC investment partners have been public institutions such as state governments, CSIRO and universities. Increasingly, however, investment partners include a mixture of large, medium and small enterprises.

Investment partnerships with the private and public sectors are both desirable and necessary, as they can bring together complementary skills, supply market knowledge and access to proprietary technologies, and reduce the risk to the GRDC in the funding of new technologies through the provision of independent financial resources.

While the most usual path to market for commercial research products arising from GRDC investment will be through licensing to suitable partners, investments in joint ventures and companies to deliver the products are also considered, based on the merits of

business cases that demonstrate delivery of the best outcome for growers and the wider grains industry.

The changing R&D investment environment will see the GRDC’s engagement with private sector investment and commercial activities increase in 2014–15, especially in relation to wheat and barley. In addition, the GRDC will seek further engagement with the private and public sectors in the gene discovery and crop protection areas, through initiatives to address issues around herbicide resistance and disease management. The GRDC will also continue to seek access to research and new technology for product development to assist the Australian grains industry as opportunities and needs arise.

Planning and reportingThe Primary Industries Research and Development Act sets out the legislative framework for the operation of the GRDC. The GRDC also has accountability obligations under the Public Governance, Performance and Accountability Act and the annual Finance Minister’s Orders for Financial Reporting.

Table 1 summarises the key elements of the annual planning and reporting framework.

Table 1: Elements of the planning and reporting approach

Element Purpose

Annual operational plan Specifies the annual budget, resources and research priorities that give effect to the strategic R&D plan during a given financial year.

Annual procurement plan

Makes procurement information publicly available through the Australian Government’s AusTender website.

Annual report Provides information on RD&E activities and their performance in relation to the goals set in the annual operational plan and portfolio budget statements for a given financial year.

Growers’ report Provides performance information to growers on research, development and extension activities for a given financial year.

Investment plan Informs potential research partners about some of the GRDC’s new investment priorities for the next financial year and invites interested parties to submit research proposals.

Portfolio budget statement

As part of the Australian Government budget process, summarises the planned outputs, outcomes, performance information and financial statements for a given financial year.

Stakeholder report Provides information that assists Grain Producers Australia to determine whether it needs to discuss the GRDC levy rate with the Minister.

Strategic R&D plan Sets out the GRDC’s high-level goals, strategies and performance measures for a five-year period, developed in consultation with stakeholders and approved by the Minister.

This document is the third of five annual operational plans to implement the GRDC’s Strategic R&D Plan 2012–17, and is published in response to:

section 25 of the Primary Industries Research and Development Act, which requires the annual operational plan to

o describe how the activities planned for the year will satisfy the objectives and strategies outlined in the strategic R&D plan

o provide an estimate of the total amounts likely to be spent in respect of each broad grouping of R&D activities

advice from the Department of Agriculture that the outcomes, outputs and performance measures contained in the annual operational plan are consistent with the GRDC’s input to the Agriculture Portfolio Budget Statements.

The GRDC’s annual report for 2014–15 will report in detail on the GRDC’s performance in achieving the objectives of this annual operational plan.

2 Investment approachBusiness environmentTo ensure that its strategies remain relevant, the GRDC continually monitors and reviews changes in its business environment. Table 2 lists the main factors expected to influence the business environment in 2014–15, and some of their implications for the grains industry and the GRDC.

Table 2: Factors expected to influence the GRDC’s business environment

Factors Effects

New arrangements under the Primary Industries Research and Development Act 1989

As a result of amendments made to the GRDC’s enabling legislation in December 2013:

The GRDC will have the ability to carry out marketing activities, if a separate levy is agreed to and established to fund those activities.

The GRDC must establish a statutory funding agreement with the Commonwealth, to take effect before 1 July 2015. The agreement will set out the terms and conditions under which funds paid to the GRDC may be spent by the GRDC.

Implementation of the Grains Industry National Research, Development and Extension Strategy

As a leader in the implementation of the Grains Industry National Research, Development and Extension Strategy, the GRDC may be required to provide increased resources for coordination and investment to secure future RD&E capacity for the national grains R&D sector.

Changes to wheat export marketing arrangements and recommendations of the Wheat Industry Advisory Taskforce

There is potential for continued industry and political debate over wheat export marketing arrangements and provision of ‘industry good’ functions, including stocks information and quality standards, with possible implications for the role of the GRDC.

Significant changes within the global grain market, including an increase in overseas demand for Australian grain and global food security issues

GRDC-supported RD&E will underpin the ability of the Australian grains industry to respond to rising global food demand, particularly in Asia, by increasing the production of grain that meets the quality and functionality requirements of target markets.

The need to adapt to the requirements of private sector collaboration on ownership of intellectual property

The GRDC will need to strengthen its internal capacity to manage intellectual property, including patents and licences, so it can continue to engage with the private sector to bring new technologies to the Australian grains industry and ensure that the industry remains competitive internationally.

Volatility in grain prices and market requirements

Volatility in grain prices and market requirements is affecting growers’ profitability and the GRDC’s ability to forecast revenue and plan investment. This will influence the GRDC’s strategies to secure a stable levy rate, as well as its efforts to support growers in effective business and risk management strategies.

Volatility in grain production Volatility in grain production due to seasonal conditions will add uncertainty to grower profitability and GRDC revenue forecasts.

Volatility in exchange rates Currency exchange rate volatility will continue to make it difficult for growers to make planting

Factors Effects

decisions with confidence.

Reduced farm profitability Reduced farm profitability may undermine growers’ confidence in the ability of rural RD&E to deliver desired outcomes, in terms of increased farm profitability and sustainability, and may limit growers’ financial capacity to adopt the results of RD&E.

Climate variability, affecting on-farm decisions and requiring an increase in innovative tools to forecast and manage risks

Climate variability is a major threat to the Australian grains industry as it makes production levels more volatile and increases production risk. It will continue to be a major factor influencing revenue streams for growers and the GRDC.

Pressure on productivity growth rates

A long-term decline in the rate of total factor productivity growth, caused by a range of factors including rising input prices and the limiting effects of climate on yields, will heighten the need for effective RD&E to improve the efficiency of input use.

StrategyThe GRDC’s Strategic R&D Plan 2012–17 provides a template to ensure that the GRDC will invest in RD&E in a sustainable manner, balancing long-term and short-term, high-risk and low-risk, and strategic and adaptive research needs, over the five years from July 2012 to June 2017.

This plan embraces the principles, strategies and implementation plan set out in the Grains Industry National Research, Development and Extension Strategy, and integrates them with the identified priorities of Australian grain growers and the Australian Government. The five-year strategy is also informed by consultation with grain growers, representatives of government and research partners, and other relevant stakeholders.

The investment strategy is underpinned by a strategic approach to achieving the planned outcomes of RD&E that runs through all levels of the GRDC’s operations. The approach is based on five key corporate strategies, supported by the overall operational strategy and enabling strategies, as shown in Figure 3.

Figure 3: Overview of the GRDC’s strategic approach

Priorities

Grains industry prioritiesThe GRDC identified the strategic RD&E priorities of the grains industry during the development of the Strategic R&D Plan 2012–17, through:

a range of consultation meetings with Grain Producers Australia (GPA), agribusiness reference groups, grower groups, grower representative organisations and individual grain growers

activities and discussions with organisations representing the interests of particular industry sectors, such as Wheat Quality Australia, Pulse Australia and the Australian Oilseeds Federation, as well as traders and marketers in general.

The GRDC continually reviews the RD&E priorities of Australian grain growers and the wider industry, through:

interaction with growers, advisers and other industry participants, through Regional Cropping Solutions network activities as well as grower updates, adviser updates, forums and field days

consultation with the GRDC regional panels, GPA, researchers, state farming organisations and the National Agribusiness Reference Group

analysis of project reviews, project progress reports and survey results.

In addition, RD&E priorities for the grains industry supply chain post–farm gate are identified through the activities of, and GRDC discussions with, traders, marketers and organisations representing particular crop sectors. Scientific opportunities to address grains industry issues post–farm gate are also identified, through interaction with researchers and RD&E providers.

The GRDC adopted the industry’s key RD&E priorities as its themes for investment in the Strategic R&D Plan 2012–17. Table 3 shows the key industry priorities and objectives.

Table 3: Grains industry priorities

RD&E priority Objective

Meeting market requirements Understanding market opportunities for Australian grain.

Crop and variety selection aligned with market requirements.

Crop production aligned with market requirements.

Grain harvest and storage practices aligned with market requirements.

Improving crop yield Genetic yield potential and stability improvement of:

cereal varieties

pulse varieties

oilseed varieties.

Protecting your crop Effective, sustainable and efficient management of:

weeds

vertebrate and invertebrate pests

cereal rusts

cereal (non-rust), pulse and oilseed fungal pathogens

nematodes

viruses and bacteria.

Biosecurity and pesticide stewardship.

Advancing profitable farming systems

Knowing what is important (key business drivers).

Planning strategically (building system benefits and rotations).

Responding tactically (individual crop agronomy).

Improving your farm resource base Understanding and adapting to climate variability.

Improving soil health.

Managing water use on dryland and irrigated grain farms.

Understanding and valuing biodiversity.

Communication of sustainable production methods.

Building skills and capacity Grains industry leadership and communication.

Capacity building in the extension sector and the R&D sector.

Capacity building for growers.

Australian Government prioritiesThe Australian Government’s R&D priorities linked to the GRDC’s RD&E investments are the Rural R&D Priorities, announced in May 2007, and the Strategic Research Priorities, announced in June 2013.The Strategic Research Priorities have replaced the National Research Priorities that were announced in December 2002 and reflected in the development of the Strategic R&D Plan 2012–17.

Table 4 sets out the key government priorities affecting rural RD&E.

Table 4: Australian Government research priorities

Strategic Research Priorities

Challenge Priority

Living in a changing environment

1.1 Identify vulnerabilities and boundaries to the adaptability of changing natural and human systems.

1.2 Manage risk and capture opportunities for sustainable natural and human systems.

1.3 Enable societal transformation to enhance sustainability and wellbeing.

Promoting population health and wellbeing

2.1 Optimise effective delivery of health care and related systems and services.

2.2 Maximise social and economic participation in society.

2.3 Improve the health and wellbeing of Aboriginal and Torres Strait Islander people.

Managing our food and water assets

3.1 Optimise food and fibre production using our land and marine resources.

3.2 Develop knowledge of the changing distribution, connectivity, transformation and sustainable use of water in the Australian landscape.

3.3 Maximise the effectiveness of the production value chain from primary to processed food.

Securing Australia’s place in a changing world

4.1 Improve cybersecurity for all Australians.

4.2 Manage the flow of goods, information, money and people across our national and international boundaries.

4.3 Understand political, cultural, economic and technological change, particularly in our region.

Lifting productivity and economic growth

5.1 Identify the means by which Australia can lift productivity and economic growth.

5.2 Maximise Australia’s competitive advantage in critical sectors.

5.3 Deliver skills for the new economy.

Rural R&D Priorities

Priority Goal

Productivity and adding value

Improve the productivity and profitability of existing industries and support the development of viable new industries.

Supply chain and markets

Better understand and respond to domestic and international market and consumer requirements and improve the flow of such information through the supply chain, including to consumers.

Natural resource management

Support effective management of Australia’s natural resources to ensure primary industries are both economically and environmentally sustainable.

Climate variability and climate change

Build resilience to climate variability and adapt to and mitigate the effects of climate change.

Biosecurity Protect Australia’s community, primary industries and environment from biosecurity threats.

Supporting the Rural R&D Priorities

Innovation skills Improve the skills to undertake research and apply its findings.

Technology Promote the development of new and existing technology.

Other national prioritiesAs described in the Strategic R&D Plan 2012–17, the GRDC’s RD&E investments are also informed by the:

priorities identified in the Grains Industry National Research, Development and Extension Strategy, and endorsed by the grains industry, governments and the RD&E sector, in April 2011

National Innovation Priorities announced by the Australian Government in May 2009

cross-sectoral research strategies developed under the National Primary Industries RD&E Framework.

The GRDC has embodied these objectives in its operations and in its themes and planned outcomes for RD&E investment.

ProcessFigure 4 provides an overview of the GRDC’s investment process. The following sections describe the six key steps in the process.

Figure 4: Overview of the investment process

GPA = Grain Producers Australia, RCS = Regional Cropping Solutions

Step 1—Identification of prioritiesThroughout the year, the GRDC improves its understanding of grains industry RD&E priorities for the year ahead. Potential issues are identified through:

interaction with growers, advisers and other industry participants, through Regional Cropping Solutions network activities such as grower updates, adviser updates, forums and field days

consultation with the GRDC regional panels, Grain Producers Australia (GPA), researchers, state farming organisations and the national and regional agribusiness reference groups

evidence from project reviews, project progress reports and survey results

identification of gaps in the investment strategies underlying each of the GRDC’s six themes

consideration of the Australian Government’s Strategic Research Priorities and Rural R&D Priorities.

All priorities are looked at as potential areas for investment in future investment cycles. Initial suggested high-level resource allocation for the year ahead of the current financial year is reported to GPA, in the form of a draft stakeholder report. Final resource allocations at the theme level are recommended to the GRDC Board in April of the following calendar year.

Step 2—Investment Planning WeekIn July/August, GRDC managers and regional panel members meet to discuss issues and investment areas that address gaps in investment strategies and the priorities identified through engagement with stakeholders.

GRDC managers then develop ‘mini prospectus’ proposals for new RD&E projects and existing projects that are due to be reviewed for further investment. The mini prospectus outlines the project’s aims, deliverables and approximate budgets. Each proposal is categorised as a national investment or a regional investment, and the appropriate procurement method (open tender, limited tender, multistage tender or direct negotiation) is identified.

The proposals are ranked by GRDC managers, taking into account the relevant five-year strategic R&D plan. The GRDC’s National Panel makes recommendations for resource allocation to frame a high-level budget. Based on procurement recommendations made during Investment Planning Week, the annual external investment plan (for the next financial year) is formulated.

Step 3—Call for tendersThe external investment plan is released in August. Investment proposals identified as suitable for competitive tender are published in the plan, which is posted on the GRDC’s website during the period of call for tenders. Tenders are evaluated against specific selection criteria to determine the preferred provider(s).

About half of the total new investments in any given year go to tender. Other projects are directly negotiated, particularly where there is limited expertise in a research area and/or there is a need for ongoing access to co-owned intellectual property.

The GRDC usually invests in partnership with the organisations that will deliver the RD&E. This means that most project investment is a combination of GRDC funding and research provider investment.

Step 4—Contracting The contracting of projects for the next financial year begins after the Board gives preliminary approval to theme allocations in September.

Step 5—Status, progress and gap review meetingIn March, GRDC managers and regional panel members meet to review and formalise the investments for the forthcoming financial year. During this meeting:

Progress on the status and development of new investments agreed to during Investment Planning Week is reviewed.

The resources being contributed to each project by the research partner(s) are assessed.

Progress in the contracting of projects is reviewed.

Actual investment that will occur in the next financial year is refined in line with the high-level budget.

Investments and refinements to budget are reflected in the drafts of the annual operational plan and stakeholder report.

Strategic gaps are assessed, along with priorities for investment identified through engagement with stakeholders, to scope potential investments for later financial years.

Step 6—Assessment of reportsIn March each year, annual progress reports on continuing investments are received and assessed by GRDC managers, in terms of both the project’s status against contract milestones and the quality of the report. The assessment process identifies issues for GRDC managers to follow up.

Payments are made to research partners for projects that have good quality progress reports and are on track to meet milestones and achieve contract outputs.

Final reports are assessed for quality of reporting and achievement of contract milestones and outputs at the end of each project (this usually occurs in September).

Communication and extensionTo realise the greatest benefit from its RD&E investments, the GRDC undertakes a range of activities to raise awareness of grains industry R&D and extend the results of GRDC-supported projects to grain growers, industry and the wider community.

Recognising that across industry there are different needs and preferences for receiving information, the GRDC uses a range of products and channels, including media; publications; the GRDC website and YouTube channel; and direct electronic distribution.

Building on the awareness generated by its communication activities, the GRDC supports the adoption of improved techniques and technology through a multifaceted approach to extension. Science writers are engaged to develop material that translates complex technical information into forms that can be applied on farm, and the GRDC invests in events, field trials, training, decision-making tools and new technologies to connect growers and advisers to the outcomes of R&D.

EvaluationThroughout the life of the Strategic R&D Plan 2012–17, the GRDC will measure, evaluate and report on the progress being made in achieving the aspirational and intermediate outcomes of each of the six investment themes.

The GRDC has developed a ‘monitoring, evaluation, reporting and improvement’ plan for each theme. Each plan includes a set of key evaluation questions that, when tested, will enable the Board and GRDC stakeholders to assess the progress made in relation to the theme. For each question, the plan identifies performance indicators and sources of data that will underpin the evaluation. Results of the ongoing performance measurement will be used to alter the investment mix where required, and to make improvements in the management of RD&E investments in order to achieve the outcomes as effectively and efficiently as possible.

The annual operational plan sets out indicators that will be used to measure the GRDC’s performance in delivering the outcomes of its investment themes and meeting its organisational objectives. Progress toward achieving those performance measures and targets is recorded through formal reporting arrangements, such as the annual report and the growers’ report, as described in Table 1.

The GRDC also continually assesses the performance of its programs and projects, including their impact on the Australian grains industry and the wider community, and regularly reports to stakeholders. In 2014–15, the GRDC will undertake evaluations that focus on the programs within the themes developed for the five-year plan, as well as evaluations of completed projects.

The impact assessment methodology uses a triple-bottom-line framework and is consistent with the Council of Rural Research and Development Corporations’ Chairs Guidelines for Evaluation. The guidelines have been endorsed by the Productivity Commission, the Australian Bureau of Agricultural and Resource Economics and Sciences, and the departments of Agriculture, Finance and the Treasury.

The GRDC also assesses its performance through stakeholder surveys that are designed to evaluate grower and research partner attitudes towards the GRDC and its performance as a research partner and investor in grains RD&E activities.

A grower survey is conducted each year to help the GRDC to assess and improve its performance, particularly in terms of ensuring that research outcomes are being communicated effectively to growers. The survey obtains detailed feedback from 1,200 growers across Australia, covering the GRDC’s three production regions and key agroecological zones.

A research partner survey is conducted periodically to measure research partner attitudes towards the GRDC. It aims to provide the GRDC with an evaluation of research providers’ perspective of their relationships with the GRDC, determining key areas of strength and weakness and identifying areas of potential improvement. A total of 300 interviews with researchers, supervisors and administrators are conducted across Australia, using Computer Assisted Telephone Interviews. A series of 18 in-depth interviews is also conducted with senior people within the research sector to facilitate a high level of discussion on partnership issues and ensure that information collected highlights areas considered to be significant by respondents.

3 Goals and performance measures Investment themesThe outcomes of the RD&E investment themes established in the Strategic R&D Plan 2012–17 are delivered by the GRDC’s three operational business groups—Research Programs, Commercial, and Regional Grower Services—supported by the enabling business functions of the Corporate Services business group and the Strategy unit.

The GRDC has determined the scope, outcomes and targets for each of the six investment themes in 2014–15. Where possible, performance metrics to track the progress of the desired practice changes for each theme have been quantified.

This section highlights examples of the RD&E investments planned for each theme. A full list of RD&E investments will be published in the GRDC’s annual report for 2014–15.

Theme 1—Meeting market requirementsThis theme describes the framework for the GRDC’s investments in grain quality and functionality to help growers maintain and expand access to markets.

Australia’s domestic and international customers seek a consistent supply of grain that is both:

a quality product that is compliant with statutory and customer-specific requirements

a functional product that performs reliably for the desired end use.

To deliver highest value to growers, the GRDC must understand the requirements and the dynamics of current domestic and export markets for feed and food grains, and those of likely future markets.

Through the ‘Meeting market requirements’ theme, the GRDC interacts closely with participants in the Australian grains value chain to better understand market requirements, particularly for quality and functionality, to enable growers to maintain or increase access to current markets and secure access to new higher valued markets.

Outcomes, budget and performance measures

Table 5 shows the 2014–15 investment budget, targets for each major practice change and the key performance metrics for Theme 1—Meeting market requirements, in the context of its intermediate and aspirational outcomes.

Table 5: Overview of Theme 1—Meeting market requirements

Theme 1—Meeting market requirements

Aspirational outcome (10+ years)

Australian grain growers maintain and increase access to current and future grain markets by aligning on-farm production practices with quality and functionality requirements.

Intermediate outcomes (5 years)

Understanding market opportunities for Australian grain—Acquisition and interpretation of information about market requirements, trends and opportunities, in order for the GRDC to make informed RD&E investment decisions and to assist

grower decisions.

Crop and variety selection aligned with market requirements—Growers use market information to select crop, variety and cropping sequence that addresses their profit and risk.

Crop production aligned with market requirements—Growers use information on appropriate in-crop management to maximise the potential of delivering grain that meets the quality and functionality requirements of the intended customer.

Grain harvest and storage practices aligned with market requirements—Growers adopt harvest and storage practices to maximise their potential to deliver grain that meets the quality and functionality requirements of the target market.

Investment budget for 2014–15$16.3 million

Practice changes and key metrics Targets

Understanding market opportunities for Australian grain

The GRDC establishes relationships with the value chain and regulatory authorities to access information about market requirements, trends and opportunities.

Australian Export Grains Innovation Centre joint venture is established and operating appropriately.

The Australian Export Grains Innovation Centre is established in Perth and undertakes a number of activities, including conducting research, holding grower and industry workshops, and producing reports on specific export markets and the development of direct relationships with exporters, end-users and government.

The GRDC makes greater use of information on current and potential future markets to guide investment decisions.

Reports from a joint project with Grain Growers Limited help to define new investment in the ramen and white salted noodle markets of Japan and Korea.

New investments in gathering market information in key wheat markets are contracted for 2014–15.

Greater than 70% of participants in the wheat and barley crop value chains engage in the relevant variety quality accreditation processes.

Crop and variety selection aligned with market requirements

A greater proportion of growers and advisers use market information to inform crop and variety selection.

A farm survey is undertaken to provide baseline data on the use of market information by growers.

Increased interaction between grains industry participants (growers, pre-breeders, breeders and value chain participants) and regulatory authorities creates awareness of the quality and functionality market access requirements.

Investments are in place to deliver information on the quality requirements by crop type that will inform the GRDC and the breeding community for each crop.

Breeders and pre-breeders use market information to deliver varieties that meet the requirements of current and future markets.

Independent wheat variety classification is maintained.

Practical, accurate and cost-effective tools to identify wheat lines that have genes for late maturity alpha-amylase so these lines can be deselected by wheat breeders are available for delivery by 2017.

The GRDC supports both the Wheat Quality Australia wheat classification process and an improved variety accreditation process for malting barley.

The ultra-low gluten barley project has progressed to a semi-commercial stage and commercial partners are being sought.

Crop production aligned with market requirements

A greater proportion of growers and advisers use relevant market information to inform decisions about in-crop management practices.

Information packages on quality management are added to the variety-specific agronomy packages being delivered through other GRDC investments.

A greater proportion of grain growers adjust pest, weed and disease management practices to meet market requirements.

The GRDC works with Grain Trade Australia to ensure that growers are aware of the key issues regarding the delivery of grain to market specifications, including in relation to maximum residue levels, weed seeds and snails.

Grain harvest and storage practices aligned with market requirements

A greater proportion of growers use harvesting strategies that maximise the opportunity to meet the requirements of their target market.

Information packages on harvester set-up and grain moisture management are developed for inclusion in grower workshops.

A greater proportion of growers are aware of the quality and functionality of the grain delivered to their customer or entering contract storage.

90% or more of growers are aware of and interested in the benefits of measuring grain quality.

By 2016, grain specification and defect charts are available to growers and industry for all major and minor crops and are annually revised.

A greater proportion of growers use storage practices to meet market requirements and provide for the continued effectiveness of pest control measures.

At least 60% of growers storing grain on farm use sealed silos.

The GRDC uses market access information to provide growers with the harvest and storage management packages and tools to comply with market requirements.

Grain storage extension workshops, with a focus on the economics and market strategies of storing grain, are highly successful in informing growers of the best methods for managing grain in storage.

By 2017, 70% of growers are implementing quality assurance systems in response to market requirements to substantiate and manage the quality of the grain they deliver.

Investment highlights for 2014–15

This section provides a few examples of major RD&E investments that illustrate the GRDC’s focus on ‘Meeting market requirements’ in the year ahead.

Market informationIn recent years, the GRDC has placed a major focus on gathering and analysing market information in relation to the needs and preferences of the end-users of Australian grain. This work will form a crucial baseline for the GRDC’s long-term investments in grain quality and functionality.

Beginning in 2014–15, a series of projects will investigate the alignment between the functional and quality needs of customers of Australian grain and the functional and quality parameters of the grain that is being delivered. Product trends in key markets will also be analysed, as responding to changing demands through pre-breeding and breeding of improved varieties requires years of lead time.

Late maturity alpha-amylaseLate maturity alpha-amylase, a wheat defect that can result in downgrading of milling-quality grain due to starch degradation, has for decades been a major restriction to the release of new wheat varieties. Limitations of the current testing protocols have meant that wheat breeders have been able to test for expression of the defect only in the most advanced genetic material, which has led to a bottleneck in the introduction of new high-yielding and disease-tolerant varieties.

A series of new investments beginning in 2014–15 aims to deliver genetic markers that will enable wheat breeders to test lines for their propensity to display late maturity alpha-amylase far earlier in the breeding program.

Stored-grain insectsThe GRDC will progress two products for controlling stored-grain insects, from the proof-of-concept stage through to the advanced development stage. The GRDC’s ongoing investment in the control of stored-grain insects is vital to Australian grain’s maintaining its insect-free status in export markets.

Theme 2—Improving crop yieldThis theme describes the genetic approaches and associated tools and technologies that can be applied to produce varieties with increased water-limited yield potential (WLYP).

The WLYP of a variety is the maximum yield attainable when the variety is grown under average, rain-fed conditions without the limiting impacts of nutrient deficiency, soil toxicity, weed competition, insect damage and disease.

Although the actual yield that is captured on farm depends on a grower’s ability to manage the biotic and abiotic factors that contribute to yield losses (and the cost limitations of management practices), WLYP is genetically determined.

Plant breeders aim to continually improve the WLYP of crops through new varieties. However, for many crops, continued

improvements in genetic yield potential and stability are becoming harder to realise.

The ‘Improving crop yield’ theme focuses on the delivery of new crop varieties with demonstrable improvements in genetic yield potential and yield stability. Given the wide range of farming environments and crop choice, targets will be crop specific and region specific.

Outcomes, budget and performance measures

Table 6 shows the 2014–15 investment budget, targets for each major practice change and key performance metrics for Theme 2—Improving crop yield, in the context of its intermediate and aspirational outcomes.

Table 6: Overview of Theme 2—Improving crop yield

Theme 2—Improving crop yield

Aspirational outcome (10+ years)

Cereal, pulse and oilseed varieties with significant, sustained and stable improvements in water-limited yield potential over current elite varieties in key agroecological zones and across a range of seasons.

Intermediate outcomes (5 years)

Genetic yield potential and stability improvement of cereal varieties—Growers access and increase production of adapted cereal varieties with a significant yield potential and stability increase over current elite varieties.

Genetic yield potential and stability improvement of pulse varieties—Growers access and increase production of adapted pulse varieties with a significant yield potential and stability increase over current elite varieties.

Genetic yield potential and stability improvement of oilseed varieties—Growers access and increase production of adapted oilseed varieties which continue to meet target oil levels with a significant yield potential and stability increase over current elite

varieties.

Investment budget for 2014–15$39.3 million

Practice changes and key metrics Targets

Genetic yield potential and stability improvement of cereal varieties

Genetic yield potential and stability improvement of pulse varieties

Genetic yield potential and stability improvement of oilseed varieties

Breeders and industry pre-breeders increase their level of collaborating to identify and prioritise traits, tools and germplasm requirements to support target gains in yield potential and stability.

New cereal varieties have minimum yield increases equivalent to 1% per annum as measured in National Variety Trials (NVT).

New pulse varieties have minimum yield increases equivalent to 2% per annum as measured in NVT.

New oilseed varieties have minimum yield increases equivalent to 1.5% per annum as measured in NVT.

Wild Cicer lines from a 2013 mission to collect germplasm from Turkey are imported and curated to be used for Australian chickpea breeding and pre-breeding.

International wheat germplasm with potentially enhanced frost tolerance is selected and imported.

An Australian pastures genebank is established.

A new phase of the National Brassica Germplasm Improvement Program, targeting industry and breeder defined canola production traits, is developed.

An in-vitro assisted system for rapid plant generation cycle time in lentils, lupins, chickpeas and field peas is developed.

Increased number of pre-breeders develop priority traits in breeder-defined genetic backgrounds and ready-to-implement selection tools to drive rapid adoption by breeding programs.

Germplasm with tolerance to acid soils and diagnostic and gene-specific molecular markers for acid soils tolerance are developed and delivered to Australian barley breeders.

Molecular markers for salinity tolerance are developed and delivered to Australian wheat breeders.

A database of genotypes for five key wheat phenology genes for use in assessing the impact of genetic variation on heading date and crop performance is developed and delivered to Australian wheat breeders.

Increased number of pre-breeders develop priority traits in breeder-defined genetic backgrounds and ready-to-implement selection tools to drive rapid adoption by breeding programs. (Continued)

Field validated data regarding the phosphorus use efficiency of major Australian wheat cultivars and data regarding genetic control of this trait are provided to Australian wheat breeders.

Germplasm and markers for alternative Rht alleles are made available to Australian wheat breeders and barley breeders.

A phenotyping method for head loss in barley is developed and genetic variation for this trait is identified.

At least one closely linked marker for a breeder-defined priority trait is delivered to the breeding programs for field peas, chickpeas and faba beans.

Increased number of breeders and pre-breeders use accurate data analysis methods to interpret yield potential, stability and environmental data that inform selection for target production environments.

All Australian wheat breeders are provided with accurate managed environment facility data quantifying the yield potential value of a minimum of six water productivity traits in defined production environments.

All Australian canola breeders are provided with accurate data quantifying the yield potential value of shattering, heat and water productivity traits in defined production environments.

Growers and their advisers have greater access to and make greater use of accurate, regionally relevant yield potential and stability data to choose an improved variety.

New varieties currently available meet the expectations of at least 60% of growers.

40% of growers and their advisers use the NVT online data or attend an NVT field day, and of these 90% consider that the information obtained helped them in deciding which varieties to plant.

More than 20,000 crop variety guides summarising the agronomic performance characteristics (yield, disease and herbicide tolerance) of 10 commercial crops grown within the National Variety Trials system are delivered.

Two freely available online/tablet-based applications that assist growers and their advisers to interpret crop variety yield performance and disease rating results are developed and deployed.

Investment highlights for 2014–15

This section provides a few examples of major RD&E investments that illustrate the GRDC’s focus on ‘Improving crop yield’ in the year ahead.

Managed environment facilities The field environment is variable and unpredictable, but trait validation in crop lines is not complete until a trait has demonstrated its value in the field. The difficulty of evaluating complex traits in relevant field conditions has meant that many genetic traits that pre-breeders have proposed for improving crop performance have not been adopted by breeding programs for variety development.

In 2010, the GRDC established three managed environment facilities to assess particular traits in a field environment and thus facilitate the adoption of promising germplasm by Australian breeding programs.

The facilities host projects to characterise advanced water productivity traits in wheat under realistic field conditions. They are located at sites representing the main environment types encountered by Australian wheat growers: Narrabri in northern New South Wales, Yanco in southern New South Wales, and Merredin in Western Australia.

Through the manipulation and monitoring of soil water status, the facilities enable the assessment of water productivity traits across multiple genetic backgrounds. Each facility manages soil moisture stress through targeted irrigation and the effects of heat stress through variable sowing dates. Field trials are monitored continuously for weather variables and changes in soil water and canopy temperature, which aids in decisions guiding irrigation scheduling and sampling times. Standardised protocols for an essential core set of measurements ensure that phenotyping for yield and other traits is consistent across sites and seasons.

Since the facilities were established, data has been collected on a number of traits, including transpiration efficiency, canopy temperature depression, carbohydrate remobilisation, early vigour, reduced tillering, enhanced heat tolerance, and ear morphology. The year 2014–15 will be the final year of evaluation for these traits. Traits shown to deliver significant improvements in water limited yield relative to the yield of regional elite varieties will be offered to all Australian wheat-breeding programs.

National Frost InitiativeFrom July 2014, the GRDC will more than double its national investment in frost research, through the National Frost Initiative. The

new investment will focus on addressing frost R&D priorities identified by the GRDC’s Regional Cropping Solutions networks, through genetics, management and environmental prediction.

The initiative’s genetics research will develop plant-breeding tools to shift Australian cereals towards the more tolerant end of the frost spectrum. It will also import and test selected wheat germplasm from international collections to identify lines that have better frost resistance under Australian conditions than current Australian wheat varieties. Lines with target levels of resistance will be used as a source of genes to be incorporated into Australian wheat varieties to increase their frost resistance.

The initiative will also investigate the potential for management practices or products to reduce the impact of frost. For example, preliminary research has indicated that reducing stubble could increase the heat radiated from the ground overnight, keeping the crop warmer and reducing frost damage. This component of the initiative will also investigate the use of plant growth regulators to delay flowering and reduce frost risk and the use of spray-on compounds to reduce frost damage.

The third component of the initiative will involve mapping frost events at the farm scale and predicting the impact of frost events. In-paddock temperature loggers and other spatial temperature measuring methods will be used to map soil temperature differences during frost events. The results will be used to develop tools that inform growers of the location and severity of frost events in the landscape, enabling them to plan and manage risk and make appropriate post-frost decisions.

Genetic improvement of canolaThe National Brassica Germplasm Improvement Program was established in 2007 to improve the uptake of pre-breeding research outputs in new canola varieties and to ensure that Australian-specific constraints to canola production are addressed. The program develops advanced canola germplasm with:

improved drought tolerance

improved heat tolerance

resistance to pod shattering

resistance to and tolerance of blackleg disease.

In 2014–15, the GRDC will lead the development of the second phase of the program, a canola pre-breeding initiative involving three pre-breeding organisations and all Australian canola breeding programs. The development of this initiative will accelerate the transfer of research outputs to growers.

Theme 3—Protecting your cropThis theme aims to develop cost-effective control options that prevent pests, weeds and diseases from causing crop yield and quality losses, and increase growers’ profit.

Existing control measures for pests, weeds and diseases require ongoing review in light of:

potential and actual incursions of exotic pests

changes in regulation of pesticide use and access

the need to

o reduce the cost and increase the speed of delivery of resistant and tolerant varieties

o manage herbicide and pesticide resistance

o provide ongoing stewardship of gene technology and pesticide products to support long-term access.

The ‘Protecting your crop’ theme develops the cultural, chemical and genetic options available to manage key pests, weeds and diseases in each region. Management options need to take into account cost-effectiveness, resilience of control strategies and flexibility to fit different farming systems.

Outcomes, budget and performance measures

Table 7 shows the 2014–15 investment budget, targets for each major practice change and key performance metrics for Theme 3—Protecting your crop, in the context of its intermediate and aspirational outcomes.

Table 7: Overview of Theme 3—Protecting your crop

Theme 3—Protecting your crop

Aspirational outcome (10+ years)

Australian grain growers managing their farms to maximise profit and reduce risk by adopting effective, sustainable and efficient control of weeds, pests and diseases.

Intermediate outcomes (5 years)

Effective, sustainable and efficient management of weeds—Growers use a combination of new genetic, biological, cultural and chemical weed management tools to reduce crop losses and minimise control costs.

Effective, sustainable and efficient management of vertebrate and invertebrate pests—Growers use a combination of new genetic, biological, cultural and chemical tools to reduce crop losses and minimise control costs of vertebrate

and invertebrate pests.

Effective, sustainable and efficient management of cereal rusts—Growers use a combination of new genetic, cultural and fungicide management tools to reduce crop losses and minimise control costs of cereal rusts.

Effective, sustainable and efficient management of cereal (non-rust), pulse and oilseed fungal pathogens—Growers use a combination of new genetic, cultural and fungicide management tools to control cereal (non-rust), pulse and oilseed root and

foliar fungal diseases.

Effective, sustainable and efficient management of nematodes—New genetic, biological and cultural management tools for the control of nematodes are delivered.

Effective, sustainable and efficient management of viruses and bacteria—Growers use a combination of new genetic and cultural management tools for the control of viruses and bacteria.

Biosecurity and pesticide stewardship—Effective biosecurity and science-based support is available for pesticide and genetic technology stewardship.

Investment budget for 2014–15$37.7 million

Practice changes and key metrics Targets

Effective, sustainable and efficient management of weeds

Effective, sustainable and efficient management of vertebrate and invertebrate pests

Effective, sustainable and efficient management of cereal rusts

Effective, sustainable and efficient management of cereal (non-rust), pulse and oilseed fungal pathogens

Effective, sustainable and efficient management of nematodes

Effective, sustainable and efficient management of viruses and bacteria

A greater proportion of growers and their advisers monitor crops for pests, weeds and diseases.

New and cost-effective control methods for weeds, pests and diseases, including new chemistries and non-chemical control tactics, are delivered to the grains industry.

Breeders and pre-breeders use available genetic diversity for resistance and tolerance breeding.

Regionally validated information about the benefits (both financial benefits and benefits from avoidance

of resistance to chemicals) of integrated methods for control of weeds, pests and diseases is readily available to growers and advisers.

Growers and their advisers cost-effectively manage pests, weeds and diseases.

Increased number of growers are adopting integrated control methods.

Growers have the skills to monitor crops and correctly identify weeds, pests and diseases, as well as beneficial organisms; determine whether or not control is warranted; and select the most suitable control method when required.

A greater proportion of growers and their advisers use practices to increase pesticide longevity and reduce the risk of resistance.

More than 70% of growers are aware of integrated weed, pest or disease management practices, and 50% use some form of integrated management methods on their farm.

Breeding programs efficiently use the available genetic diversity to improve varietal resistance to weeds, pests and diseases.

Growers reduce their planting of varieties known to be susceptible to pests and diseases, including to disease vectors.

Periodic compilations of industry data demonstrate that cost savings are being achieved in the control of weeds, pests and diseases, and the GRDC and other industry participants use these compilations to guide investment decisions.

Biosecurity and pesticide stewardship

A greater proportion of growers and their advisers use surveillance and biosecurity measures to manage and prepare for incursion and containment of exotic plant pests, plants and diseases.

At least 50% of growers undertake on-farm practices to maintain or improve their biosecurity.

Growers are aware of assessments of biosecurity threats to the grains industry, adopt on-farm biosecurity measures, and know what to do in the event of an incursion.

Breeders and pre-breeders use available genetic diversity to deliver varieties resistant to high-risk biosecurity threats.

Pre-breeding programs are developing germplasm with a high resistance to identified high-risk biosecurity threats.

A greater proportion of growers and their advisers manage stewardship of pesticides and varieties to prolong pesticide effectiveness and ensure safety to health and the environment.

90% of growers undertake activities to delay the onset of or manage herbicide resistance in weed populations.

Growers and advisers have access to and use information on chemical management and plant varieties so that appropriate tactics can be implemented to manage weeds, diseases and insects; delay onset of resistance; ensure safety to health and the environment; and not adversely affect trade.

Investment highlights for 2014–15

This section provides a few examples of major RD&E investments that illustrate the GRDC’s focus on ‘Protecting your crop’ in the year ahead.

Retaining and developing pesticide optionsThe pest management needs of the Australian grains industry are changing as a result of many factors, such as pesticide resistance, regulatory activity, market access issues and registrant indifference with respect to generic pesticides. These effects are increasing pressure on the industry to secure alternative pest management options. Two GRDC-supported projects are designed to facilitate access to necessary insecticide, herbicide and fungicide options generally not available to growers via commercial manufacturers and formulators.

One project focuses on opening pathways to registration for label extensions that allow new uses of chemicals on grain crops. Since 2011–12, the project has commissioned 45 field trials of 10 chemicals on 11 different crops, and submitted 17 data packages covering 31 new use patterns to the Australian Pesticides and Veterinary Medicines Authority or registrants.

A further 10 data packages will be delivered in 2014–15. The project will also:

maintain a national database of relevant GRDC-supported pesticide research projects, to improve pesticide research coordination

maintain and update an annual priority list for pesticide–crop combinations requiring either permits or label registrations, on behalf of grains industry stakeholders.

The other project focuses on regulatory approval of minor use chemicals, securing access for growers to suitable pest management solutions not currently covered by chemical registrants. The project aims to achieve 15 regulatory approvals for needed minor uses in 2014–15, through an ongoing consultation process involving all relevant grains industry stakeholders. The project will also develop an industry plan for minor uses, including a process for prioritising tasks and communicating results to growers.

Predicting disease-induced yield loss in wheat and barleyWith ongoing support from the GRDC, significant progress has been made in the development of disease resistance and tolerance ratings for a wide range of pathogens, including foliar pathogens, crown rot, common root rot, cereal cyst nematode and root lesion nematodes, in wheat and barley varieties.

However, less has been done in terms of assessing the yield losses due to these diseases. Varieties which rank similarly in resistance and/or tolerance may vary in yield lost, and the rate of loss may also vary according to regional or seasonal conditions. The development of disease response curves indicating the potential yield losses associated with the selection of varieties is an R&D priority for growers.

In 2014–15, the GRDC will invest in research to develop robust guidelines that effectively demonstrate the production losses associated with selected foliar and root diseases in current and near-to-release wheat and barley varieties. Access to such information when making management decisions is expected to offer growers a minimum of 15 percent improvement in wheat and barley production and/or system cost efficiency.

The results will be presented to growers in a several formats, including fact sheets, reports, sowing guides, the National Variety

Trials website, and novel learning formats such as the decision support system Rustman, which estimates disease incidence and yield effects and the benefits of fungicide intervention.

Managing snails and slugsSeveral exotic snail and slug species of European–Mediterranean origin have become significant pests of grain crops in Australia. Snails cause economic losses through yield loss from feeding damage, field control costs, additional harvest costs, grain value loss and receival rejection, and can threaten market access. Slugs cause yield losses from feeding damage, especially at crop establishment, and economic losses through the costs of re-sowing and field control.

In 2014–15, the GRDC will invest in research to better understand the distributions of these pest species in southern Australia. The key objective of the project is to improve the industry’s capacity to effectively control snail and slug infestations and manage rapid outbreaks.

The project will focus on:

quantifying best baiting and other chemical control practices, including by studying timing optimisation and comparing current products

delivering at least one new chemical control tool, particularly for targeting juveniles and rapid incursions

validating cultural control practices, through consulting growers about current harvest and summer control strategies

producing a decision support tool to inform management choices for cost-effective control.

The package of newly developed pest biology and management information for growers will be promoted through comprehensive, regionally focused fact sheets and at workshops in all regions.

Theme 4—Advancing profitable farming systemsThis theme aims to provide growers and their advisers with the tools to design and manage a farming system with the flexibility to adapt and respond; manage risk; and generate profit.

The ‘Advancing profitable farming systems’ theme:

ensures that research results from the other themes are integrated on farm

undertakes production agronomy research for systems development

provides an important conduit for identifying on-farm production constraints and opportunities to inform activities in other themes.

The investment strategies for this theme differ across agroecological zones and farming systems, and are a combination of:

applied farming systems research to overcome major, widespread regional constraints

short-term development and extension activities to improve technologies or practices for a target group of growers in an agroecological zone.

Outcomes, budget and performance measures

Table 8 shows the 2014–15 investment budget, targets for each major practice change and key performance metrics for Theme 4—Advancing profitable farming systems, in the context of its intermediate and aspirational outcomes.

Table 8: Overview of Theme 4—Advancing profitable farming systems

Theme 4—Advancing profitable farming systems

Aspirational outcome (10+ years)

Australian grain growers managing farming systems that are able to respond and adapt to changing environmental and market conditions to reduce risk and deliver an increase in profitability.

Intermediate outcomes (5 years)

Knowing what is important (key business drivers)—Identification and understanding of the opportunities, risks and potential impacts of key farming practices in each agroecological zone is improved.

Planning strategically (building system benefits and rotations)—Growers adopt integrated management of opportunities and constraints to increase profit and minimise risk across seasons (above the five-year rolling average).

Responding tactically (individual crop agronomy)—Gross margin generated from the major crops in each agroecological zone is increased.

Investment budget for 2014–15

$33.6 million

Practice changes and key metrics Targets

Knowing what is important (key business drivers)

Information is available in each GRDC agroecological zone about the main opportunities, constraints, and risks to farming systems.

The GRDC receives information at least annually via the regional panels.

Growers are able to quantify the gaps between potential and actual yield for wheat at the statistical local area scale and for different decile years.

A framework which defines attainable yield for three agroecological areas is developed for the Northern Region.

Data is also available in each zone about how whole-farm and farming system decisions affect those opportunities, constraints and risks.

Soil moisture measurement information, including estimation methods and system design conceptualisation, is conveyed at major regional forums.

Data revealing how whole-farm and farming system decisions affect opportunities, constraints and risks are available.

Better methods and tools are developed for comparison and ranking of the impacts of opportunities and risks on farm profit and sustainability, both short- and long-term.

A soil moisture prediction tool is developed for growers, using smartphone apps.

A greater proportion of growers and their advisers use information and tools to identify and rank constraints and opportunities to increase profit.

70% of growers place a high importance on the use of decision tools to assist them with strategic or tactical decision making.

Key issues and information gaps identified during updates are analysed.

Data showing the changes in profit, cash receipts, input costs and other financial indicators being achieved by growers who have adopted the strategic and tactical optimisation of their farming systems are available.

Planning strategically (building system benefits and rotations)

A greater proportion of growers and their advisers are aware of the actual and potential impacts of their management on the farming systems across seasons and across the farm, based on regionally validated data as well as their own records.

The capacity of growers and consultants to characterise soils for plant-available water content and measure soil water availability is increased.

Research, development and extension work related to retained stubble farming systems in south-eastern Australia is collated and analysed.

Growers implement long-term, strategic plans to take advantage of identified opportunities, manage constraints and reduce risks, while retaining flexibility to respond to unforeseen events.

More than 25% of growers have developed a whole-farm business plan which takes account of strategic opportunities, constraints and risks.

Collated information on all published documents related to crop rotation, break crops and crop sequencing is available.

Increased numbers of growers are optimising their cropping systems in response to both opportunities and constraints.

Effective management practices for opportunities, constraints and risks are developed, validated and demonstrated in each agroecological zone.

Strategic decisions and practices are tested, validated and demonstrated in each agroecological zone, and captured in regionally relevant best management practice publications.

Increased numbers of growers use and have greater knowledge of the benefits of rhizobium inoculation and best practice techniques for maximising nitrogen fixation in their cropping systems.

Responding tactically (individual crop agronomy)

An increased proportion of growers use crop-specific best management practices to optimise their tactical (within season) agronomy for each individual crop.

Growers use improved strategies to cost-effectively acquire crop inputs.

Growers have access to regionally relevant best management practice publications.

Information on plant growth regulators’ current use in Australia, product development, global usage and future roles in the Australian grains industry is available to the GRDC.

Management guidelines for newly accredited malting cultivars are available.

Robust, region-specific recommendations for varietal selection and management to maximise productivity and resource use efficiency in dual-purpose cereal and canola crops in mixed farming systems are available.

Information on safe grazing periods and grazing methodologies that reduce the impact on crop yield is offered in all major cropping regions in Australia.

Guidelines on seasonal suitability of early sowing and the management for early sown crops are developed for the Southern Region.

Investment highlights for 2014–15

This section provides a few examples of major RD&E investments that illustrate the GRDC’s focus on ‘Advancing profitable farming systems’ in the year ahead.

Integrating technical data and profit driversFarm businesses are very complex and farmers need support tools and skills in order to make use of their full suite of capabilities. Although the Australian grains industry has access to several effective decision support tools, there is a lack of integration between technical data and the profit drivers of grain growers’ businesses. As a result, growers are not achieving the full potential profit from their physical and financial resources.

The GRDC is supporting work to provide grain growers and their advisers with information and recommendations which increase their capacity to make informed decisions that directly affect business performance. The investment will provide growers with the tools and knowledge they need to integrate key profit driver technical information (including, but not limited to, agronomic, economic and risk information) into their decision-making processes.

In 2014–15, this project will identify the key profit drivers for each agroecological zone and conduct an audit of the availability and usefulness of current production and business tools.

Optimising production at the paddock level The production achieved in a grain paddock is a function of a complex system of environmental (abiotic and biotic), genetic and management interactions. Researchers, advisers and growers currently do not have the information needed to identify the relative importance of the different biophysical, genetic and management factors in determining water-limited yield under commercial paddock conditions. Growers need independent knowledge and tools to review paddock performance, prioritise constraints (in the context of yield) and validate management decisions.

In 2014–15, the GRDC will invest in research that will use novel statistical approaches to rank the contributions of individual yield-limiting factors, as well as interactions between them, under conditions experienced by grain growers. The project will use paddock-based data sets and simulation modelling to compare actual yield with predicted results. The results will be used to develop regionally specific management guidelines on ways to focus resources in order to maximise productivity at the paddock level.

The research will focus on commercially important crops for the relevant agro-ecological zones in each region:

chickpeas, sorghum and wheat in the Northern Region

barley, canola and wheat in the Southern Region

barley, canola, lupins and wheat in the Western Region.

Managing non-wetting soilsSlow and uneven water infiltration associated with soil surface non-wetting is a major and growing constraint to crop performance, particularly in the Western Region but also in parts of other regions that have sandy surface soils. The negative effects include poor crop establishment, uneven germination of weeds and increased evaporation, across a range of crops in both high-rainfall and lower rainfall environments.

Commencing in 2014–15, a new GRDC investment will support work to provide growers with a range of tools to manage non-

wetting soils in the Western Region, and to increase human capacity in this area of soils R&D by leveraging a large, long-term commitment to addressing this high-priority issue.

The project will be supported until June 2019, by which time stakeholders will have an increased understanding and knowledge of mitigation and amelioration management practices for non-wetting soils. An increase in specialist capacity will further the research and extension conveyed to growers, which in turn will improve crop establishment and the performance and health of non-wetting soils.

In 2014–15, this project will undertake a literature and current projects review and develop an extension program to inform growers and advisers of the current management options, risks and opportunities associated with overcoming the adverse effects of non-wetting soils in the Western Region.

Making effective use of micronutrientsIn 2012–13, the GRDC commissioned a study in response to a community perception that micronutrients or trace elements are being depleted in cropping systems. The study assessed the extent of deficiencies of boron, copper, manganese, molybdenum and zinc across relevant agroecological zones, identified potential risk areas for micronutrient deficiency, and made recommendations for future RD&E.

Future GRDC investment in this area will focus on making better use of micronutrients to correct deficiencies and enhance crop yield. In 2014–15, a project will be undertaken to develop clear regional guidelines to underpin the diagnosis of boron, copper, manganese, molybdenum or zinc deficiencies and provide farming systems management strategies that assist growers to overcome trace element deficiencies. The project will review and collate all historic micronutrient trials and produce a series of fact sheets for each element.

Theme 5—Improving your farm resource baseThis theme is focused on protecting and enhancing the farm’s soil, water, habitat and atmospheric resources to maintain production performance under a variable climate and to demonstrate to consumers and the wider community the sustainable nature of Australian grains production.

Australian grain growers operate in a variable climate and will be significantly affected by climate change. In addition, growers will need to react to Australian Government and international policies, programs and market expectations set in response to climate change—for example, in relation to greenhouse gas emissions.

These impacts need to be understood so that the industry can minimise risk and maximise opportunities. The issues of climate variability and change need to be factored into both seasonal and longer term farm business decisions.

Within the context of a changing climate, soil, water, habitat and atmospheric resources need to be improved across the environment in which the industry operates. Soil carbon is declining in many grains catchments, as is soil pH. Although water consumption by agriculture is being reduced and becoming more efficient, water quality in some key catchments requires further management. Native vegetation communities have become highly fragmented, affecting both biodiversity balance and the potential for exploitation as habitat for beneficial organisms.

In addition, as consumers are becoming more interested in how the food they buy is produced, the grains industry needs to be able to communicate its commitment to good stewardship. The ‘Improving your farm resource base’ theme assists growers, across the industry and as individual producers, to demonstrate that they are using chemicals and fertiliser wisely and caring for the land.

Outcomes, budget and performance measures

Table 9 shows the 2014–15 investment budget, targets for each major practice change and key performance metrics for Theme 5—Improving your farm resource base, in the context of its intermediate and aspirational outcomes.

Table 9: Overview of Theme 5—Improving your farm resource base

Theme 5—Improving your farm resource base

Aspirational outcome (10+ years)

Grain growers are valued for adopting practices that improve regional habitat, soil, water and atmosphere resources in a changing climate.

Intermediate outcomes (5 years)

Understanding and adapting to climate variability—Farm business plans provide the flexibility to respond to the risks and opportunities of a changing and variable climate.

Improving soil health—Soil health is improved and soil, nutrient and chemical losses are reduced.Managing water use on dryland and irrigated grain farms—Water use efficiency, quality and availability are improved on

dryland and irrigated grain farms that manage the risk of off-farm impacts, including soil, nutrient and chemical run-off, and

dryland and irrigated salinity.Understanding and valuing biodiversity—Biodiversity is managed on farm for ecosystem services (such as habitat, amenity,

pollination and profitability).Communication of sustainable production methods—Markets and the broader community recognise the environmental

credentials of grain farm businesses.

Investment budget for 2014–15$13.9 million

Practice changes and key metrics Targets

Understanding and adapting to climate variability

Growers integrate weather data with other resource inputs to predict, plan and assess farm performance.

Growers factor into their long-term planning the potential effects of climate change.

Growers use improved seasonal forecasts and tools to manage their farm business in response to climate variability.

A range of farming system options to respond to climate variability and change are developed and tested for each major grain-growing region.

Growers seek information about the possible impacts of long-term climate changes on crop growth patterns and adopt enterprise and crop decisions and agronomic practices required to optimise profit and manage risk.

60% of growers consider the potential effects of climate change on their farm business when making long-term decisions.

Increased number of growers use seasonal forecasts, local climate data and decision tools to help predict and plan likely crop and farming system performance, and in their tactical (seasonal) decisions.

Growers seek information about potential mitigation strategies to reduce on-farm greenhouse gas emissions, and adopt them where feasible.

Researchers incorporate farm-scale data in the improvement of climate and weather modelling.

Increased number of growers are aware of their farms’ greenhouse gas emissions profiles and are adopting appropriate mitigation strategies.

Improving soil health

Growers adopt agronomic practices that improve the chemical, physical and biological health of the soil for sustained productivity.

60% or more of growers undertake activities to improve the condition and productive capacity of their soils.

Growers understand and manage the impact of farming practices on soil health in order to maintain or increase productive potential.

Growers increase the extent and quality of ground cover to improve soil health and minimise loss.

Increased number of growers regularly measure the health (productive capacity) of their soils and incorporate the information into their land use and cropping decisions.

Growers are aware of and are adopting management practices that will maintain and improve their soils’ productive capacity and minimise losses due to erosion.

Managing water use on dryland and irrigated grain farms

Growers manage water quantity and quality on farm to improve efficiency of water use.

Increased number of growers regularly measure soil moisture to set target yields and determine optimum levels of crop inputs (including irrigation water).

Growers implement appropriate and efficient practices that minimise adverse impacts on surface and groundwater quality leaving the farm.

At least 65% of growers use nutrient budgeting to better match application with anticipated crop needs.

Increased number of growers assess groundwater levels to avoid the risks of waterlogging and salinity.

Increased number of growers test the quality of water used on farm (including for stock or for spraying) and of water leaving the farm.

Understanding and valuing biodiversity

Growers and their advisers recognise the potential benefits of biodiversity in the landscape to their farming systems.

Growers understand the likely effects of alternative land-use decisions based on sound data, and use this to make assessments of land capability and use.

Growers integrate the management of vegetation with high biodiversity value to meet farm business objectives (e.g. managing frost, providing shelter, accessing emerging carbon markets, managing salinity, applying area-wide integrated pest management or maintaining lifestyle objectives/farm aesthetics).

Growers develop and adopt vegetation management plans for their farms to assist crop production (e.g. through maintaining beneficial insects or using windbreaks), or to access additional sources of farm income (e.g. from agroforestry or carbon farming).

Growers use vegetation plans to assist in identifying and conserving areas of native vegetation important for local or regional biodiversity, production benefits, or farm amenity.

Communication of sustainable production methods

Growers recognise themselves as sustainable food producers rather than bulk commodity producers.

Growers communicate their responsible use of farm inputs and the natural resource base to the broader community.

Growers understand, calculate and communicate the carbon and water footprint of the products they produce.

Increased number of growers adopt quality assurance, environmental management systems or other stewardship approaches to assist them in meeting market requirements, enhance their recognition as producers of quality products, and meet community expectations of sustainable land use.

Growers are aware of and actively participate in catchment management plans and programs.

Investment highlights for 2014–15

This section provides a few examples of major RD&E investments that illustrate the GRDC’s focus on ‘Improving your farm resource base’ in the year ahead.

National strategy for soilsSoil is a vital resource with which growers work to produce their crops. Australian soils are often highly weathered and shallow and can be constrained in fertility, structure and biology. The improvement of the chemical, physical and biological health of the soil is fundamental to achieving a profitable and sustainable grains industry that is valued by the wider community.

The GRDC, along with government agencies, rural industry representatives, R&D providers and other rural R&D corporations, has agreed to participate in the National Soil Research, Development and Extension Strategy. The strategy was launched in March 2014 and aims to:

improve effectiveness of co-investment to generate and apply new knowledge

improve quality, availability and access to soil data and information

improve communication and exchange of soil knowledge

adopt a national approach to building future skills and capacity

collaborate on development and use of physical infrastructure.

Aligned with this framework, in 2014–15 the GRDC will commence significant new investments, and continue ongoing investments, in response to growers’ identified priorities for soil measurement and management R&D. Importantly, the soil data collected will be fed into the Australian Soil Resource Information System so that it is available to improve the communication and exchange of soil information.

Non-wetting soilsThe GRDC has a range of investments in R&D to help growers manage the effects of poor water infiltration associated with non-wetting soils, which are a major constraint to crop performance in the Western Region and other areas that have sandy surface soils. In 2014–15, a new project will develop manuals summarising the experiences of growers and researchers in applying current approaches to managing non-wetting soils, to form the basis of extension and training on practices such as clay spreading, delving, spading and inversion of soils. The manuals will incorporate both the positive and the adverse implications to the soil system so that growers can make informed management decisions.

Soil compactionSoil compaction caused by the movement of heavy machinery across fields is having a negative effect on grain yield in some circumstances. A new GRDC investment in 2014–15 will develop a combination of prevention and mitigation strategies to minimise the yield losses caused by compaction in the Western Region. Five field trials (one in each port zone of Western Australia) will be established, with the aim of demonstrating the tools available for the management of soil compaction. The results will be publicised to improve grower and adviser knowledge through field days, workshops and a ute guide.

Controlled traffic farmingControlled traffic farming (CTF) systems can be an effective management approach for preventing soil compaction, but the rate of adoption of CTF in the low-rainfall zone of the Southern Region has been poor. In 2014–15, the GRDC will support a project to prepare detailed guidelines for implementing CTF in the low-rainfall zone, taking into account the production environment, scale of operation, financial constraints, and access to necessary resources and support, such as GPS systems, technical and mechanical support for machinery and electronics.

Subsoil constraintsSubsoil constraints such as salinity, sodicity, acidity, alkalinity or toxic levels of elements such as boron, chloride and aluminium are significant constraints to crop production, especially in the Western Region. The economic management of these constraints presents a major opportunity to improve grain farm profitability.

In 2014–15, the GRDC will invest in the development of improved diagnostic systems and technologies that:

enable the nature and the extent of subsoil constraints to be identified and documented

define regional and soil type differences

provide information on the spatial variation of constraints at a statistical local area scale.

Ultimately, tools will be developed to assist growers to manage their inputs with a realistic understanding of yield potential as constrained by subsoils. This will include tools for soil identification and zonation in variable rate fertiliser treatments, and will draw on the use of reference soil information in the Agricultural Production Systems Simulator (APSIM) and the Yield Prophet model and tool.

Theme 6—Building skills and capacityThis theme is focused on generating leadership, innovation and education in the grains sector.

To compete and succeed internationally, the Australian grains industry needs a highly skilled and motivated workforce, including growers, advisers, researchers and managers. The industry has identified several critical challenges:

the grains industry and farming are becoming increasingly complex, with many types and sources of information that growers need to make decisions

the number of appropriately skilled researchers and advisers being trained to replace the current generation is inadequate—this is compounded by a large number of experienced people reaching retirement age

agricultural careers are not traditionally attractive to potential candidates

the grains industry lacks a whole-of-industry approach to building skills and capacity

growers are time-poor and face succession-planning changes

the uptake of technology often requires substantial technical support.

Through the ‘Building skills and capacity’ theme, the GRDC has identified opportunities to focus its investment to address these challenges.

Outcomes, budget and performance measures

Table 10 shows the 2014–15 investment budget, targets for each major practice change and key performance metrics for Theme 6—Building skills and capacity, in the context of its intermediate and aspirational outcomes.

Table 10: Overview of Theme 6—Building skills and capacity

Theme 6—Building skills and capacity

Aspirational outcome (10+ years)

A dynamic Australian grains industry with the skills and capacity to continuously innovate.

Intermediate outcomes (5 years)

Grains industry leadership and communication—The Australian grains industry has the leadership and communication capacityto proactively engage with the broader Australian community.

Capacity building in the extension sector—Australia has a skilled agricultural extension sector with access to appropriately skilled people.

Capacity building in the R&D sector—Australia has world-class R&D personnel with the appropriate skills to meet current and future needs of the Australian grains industry.

Capacity building for grain growers—Growers recognise the benefits to their businesses of acquiring additional skills and knowledge and hence the value of their participation in training and continuous learning.

Investment budget for 2014–15$9.9 million

Practice changes and key metrics Targets

Grains industry leadership and communication

An increased number of industry participants are engaged in regional and national leadership roles in the Australian grains industry.

At least three Nuffield scholars are from the grains industry each year.

Leadership positions within the Australian grains industry can be filled with minimal delay by candidates who have the skills, knowledge and experience required.

The grains industry communicates information about potential career opportunities to secondary and tertiary students and their parents and career advisers.

The GRDC invests in a number of initiatives that promote, and prepare students for, the diverse range of career opportunities available in the grains industry.

The grains industry publicises how it benefits the wider community.

The GRDC invests in a number of programs that promote a greater awareness of the role and importance of the Australian grains industry.

Capacity building in the extension sector

The extension sector collates and publishes annually its skills requirements and identifies gaps and potential gaps in discipline areas.

The extension sector regularly communicates its training requirements for skilled personnel, including any gaps in discipline areas, and provides these to the GRDC and training organisations.

Increased number of people enrol in targeted agriculture-related disciplines.

The GRDC supports a range of programs that increase enrolments in agriculture-related disciplines.

Increased number of qualified graduates are employed in extension roles.

Training opportunities that meet the needs of the sector are available through vocational education and training programs, graduate and postgraduate studies, and non-award courses.

Increased number of graduates and other extension staff undertake post-graduate/workplace training.

Increased number of undergraduates successfully complete agriculture-related courses.

Career pathways within the extension sector retain skilled and experienced personnel.

The proportion of people in the extension sector with relevant graduate and post-graduate qualifications is increasing.

Capacity building in the R&D sector

The grains industry has a clear understanding of its skills requirements in the short, medium and long terms.

The grains industry, in collaboration with RD&E providers, regularly communicates its anticipated future requirements for skilled personnel, including any gaps in discipline areas, and provides these to training organisations.

The industry and its RD&E providers are maintaining or increasing the skills and capacity available, in line with the Grains Industry National Research, Development and Extension Strategy.

Training providers address the grains industry RD&E skills gaps in innovative and flexible ways.

RD&E providers work with the grains industry to develop improved measures of RD&E performance.

Capacity building for grain growers

Growers recognise the additional knowledge and skills they need to fully understand, adapt and adopt the outputs of RD&E and optimise their benefits.

Increased number of growers regularly use the support of a skilled adviser to assist with cropping and business decisions.

Growers and their advisers participate in relevant training and An increased proportion of growers and advisers are

skills development and apply the knowledge gained to on-farm decisions and practices.

At least 65% of growers and advisers undertake at least one activity each year to learn more about opportunities to improve farm profit or sustainability.

undertaking further education, training and skills development to enable them to make better use of RD&E outputs and increase profitability and sustainability.

Growers apply skills on farm to increase profitability and sustainability.

The GRDC Grower Survey indicates intended practice change on farm as a result of training and skills development.

Investment highlights for 2014–15

This section provides a few examples of major RD&E investments that illustrate the GRDC’s focus on ‘Building skills and capacity’ in the year ahead.

Capacity-building strategy and investment planThe Australian grains industry does not have the necessary skills and capacity throughout the supply chain to meet its current and future needs and to enable industry participants to continuously innovate to anticipate future challenges.

In 2014–15, the GRDC will invest in developing a skills and capacity building strategy and investment plan to ensure that the grains industry has enough people with the right capabilities to meet its RD&E, farm management and labour requirements into the future.

Working with a range of stakeholders and within the parameters of the GRDC’s Strategic R&D Plan 2012–17, this project will include a capacity audit and gap analysis involving grain growers, advisers and researchers, as well as communication and leadership initiatives for the grains industry. This project will consolidate and build upon the extensive work that has already been completed in this area.

The outcomes will provide the grains industry with a clear understanding of the skills and capacity needs of the future and a robust investment plan to address those needs.

Education resources for school studentsThere is an increased general lack of understanding among members of the Australian community of the role and importance of the grains industry in providing food for an increasing population. There also seems to be limited awareness of, and interest in, the range of career options available within the industry.

In 2014–15, the GRDC will invest in a project to develop a suite of grains industry education resources and initiatives for school students and their families. The resources and initiatives will be developed with input from a range of experts and key stakeholders.

Through coordinated investment in strategic, grains-related education activities, the project will lead to an increase in the levels of awareness and understanding of the role and importance of the Australian grains industry in food production among students and their families.

Scholarships for young rural leadersThe Horizon Scholarship program was developed by the Rural Industries Research and Development Corporation to support the next generation of agricultural leaders. It creates opportunities for young people who are passionate about agriculture, have a keen interest in the future of agricultural industries, and are ready to expand their networks and learn new skills. Scholarship recipients gain exposure to and experience in agricultural industries through industry placements, professional development, mentoring and networking.

In 2014–15, the GRDC will expand its support for scholars in the grains industry, increasing the number of recipients who are likely to commence professional careers in the industry.

Pathways to careers in agronomyThe important role of farm advisers in supporting growers’ on-farm decision making is well recognised. However, the GRDC has identified significant challenges to maintaining the supply of competent agronomists into the future. While the number of experienced agronomists is declining, enrolments in agricultural science courses are falling, partly because of poor awareness of potential career pathways.

In 2014–15, the GRDC will support research to consider the current pathways for students seeking to become agronomists, with a view to developing strategies and mechanisms that improve those pathways, promote opportunities for students to consider agronomy as a career, and fast-track the acquisition of the skill sets necessary to improve the quality of decision making on farm.

Management skills for growers and advisers

Business management skills are required in the grains industry to enable growers and their advisers to assess the outcomes of R&D and adopt and adapt relevant outcomes to suit individual farm businesses. In 2014–15, the GRDC will support Farm Business Updates to raise awareness and increase business management skills and capacity among growers and advisers in the Southern Region.

Mobile devices such as tablets and smartphones offer growers and advisers ways to improve their efficiency and utilise decision support tools in the paddock. At the same time as the uptake of mobile devices is increasing, new apps are becoming available—for example, map-based apps to enhance growers’ adoption of precision agriculture and variable rate technology.

In 2014–15, the GRDC will support face-to-face workshops to assist growers, agronomists and local industry participants to integrate mobile device technology into their grains production businesses. The GRDC will also support a project to benchmark the uptake of the technology in the grains industry.

Cross-theme investmentsSome of the GRDC’s investments contribute to achieving the targets and outcomes of several, or all, of the RD&E investment themes. In 2014–15, these cross-theme investments fall into two categories:

‘Foundational activities’, which covers investments in activities that underpin the delivery of programs that run across multiple themes, such as

o developing data sources for evaluating and reporting on the progress of the investment themes

o conducting communication campaigns

o managing customer relationships and communication channels, including the GRDC’s publications, periodicals, promotional materials and online content

‘R&D management’, which encompasses investments in the GRDC’s commercial activities as well as other activities such as

o conducting stakeholder surveys

o providing support for consultative bodies and managing the GRDC’s directorships and memberships of grains industry organisations

o performing reviews, impact assessment and portfolio analysis

o managing amortisation of shares, emerging issues and unallocated investment funds.

In 2014–15, ‘Foundational activities’ has a budget of $9.0 million, while ‘R&D management’ has a budget of $32.3 million.

Enabling business functionsThe GRDC’s Corporate Services business group works with the three operational business groups to implement the GRDC’s corporate strategies and achieve the planned outcomes of the GRDC’s investment themes.

Figure 5 shows the key enabling activities in the context of the core business processes through which the GRDC implements its RD&E investment strategy and delivers value for grain growers and government. Table 11 provides details of the GRDC’s objectives and plans for its enabling functions in 2014–15.

Figure 5: GRDC value chain

Table 11: Objectives and plans for enabling activities in 2014–15

Objective Plans

Corporate strategy

Support the implementation of the Strategic R&D Plan 2012–17.

Ensure that employees understand the GRDC’s strategic direction.

Review the progress of the implementation of the five-year plan.

Monitor the business environment.

Ensure that customer segments (including the general public, where appropriate) are aware of the goals, strategies and achievements of the corporation.

Continue to monitor the portfolio balance and improve the efficiency and effectiveness of selecting and managing projects.

Planning and reporting

Inform stakeholders of the corporation’s goals, strategies and achievements.

Ensure the timely publication of the:

five-year strategic R&D plan

annual operational plan

portfolio budget statement

annual report

growers’ report

stakeholder report.

Business processes and procurement

Conduct effective and efficient procurement and project management processes.

Ensure that business processes create greater efficiencies.

Manage the process for investment planning.

Provide processes that meet the requirements of the Commonwealth Procurement Rules.

Maintain and continuously improve the procurement processes.

Implement a process to ensure that the appropriate level of staff knowledge of procurement is embedded and staff awareness of procurement processes is continuously enhanced.

Corporate communication

Inform all customers /stakeholders of the corporation’s goals, strategies and achievements.

Develop integrated communication campaigns (involving all business units) to deliver specific and timely information to external stakeholders.

Through media monitoring, measure the GRDC’s effectiveness and performance in corporate communication.

Through mainstream media, identify and target information of interest and relevance to the general public.

Increase the effectiveness of internal communication within the GRDC.

Information management systems

Support R&D information access needs and records management as well as the business computing and telecommunication requirements of the organisation.

Update the information systems environment to comply with the Australian Government Protective Security Policy Framework.

Ensure information technology is aligned with all GRDC business processes.

Provide business systems that meet the requirements of the organisation.

Maintain a reliable and secure network for GRDC users that is capable of growth as needed.

Facilitate the procurement of information technology and telecommunications equipment for information and communications management.

Maintain and continuously improve the project management system and the records management system, in accordance with GRDC business processes.

Ensure that the GRDC’s website and intranet are successfully maintained and developed as effective tools for communication and the education of staff and stakeholders.

Objective Plans

Finance and administration

Manage the accounting and treasury functions in accordance with statutory obligations and requirements and the direction of the GRDC Board.

Maintain a monitoring system through the Finance, Risk and Audit Committee and the internal audit program.

Develop, update and implement treasury management systems that enable the corporation to meet the funding requirements of the annual operational plan.

Develop and maintain the budget and reporting framework to foster financial responsibility at the business unit level.

Improve and upgrade reporting systems and templates to encapsulate best practice.

Human resource management

Deliver best practice human resource management outcomes that ensure a highly motivated workforce focused on achieving organisational goal and objectives.

Develop and deliver a performance management system (recruitment, succession, performance management, retention, diversity, learning and development).

Develop and deliver supporting policies and procedures for the GRDC Enterprise Agreement.

Ensure that GRDC roles are graded to ensure market competitiveness.

Deliver quarterly human resource and work health and safety reporting and annual workforce and training plans.

Risk management

Ensure that strategic, business, fraud, work health and safety, and security risks are identified, assessed and appropriately managed.

Maintain an effective risk management system.

Manage risks at the project, business unit and strategic levels of the corporation.

Monitor and update the risk management register and the fraud control plan, to reflect changes in the operating environment.

Implement a process to ensure that the level of staff knowledge of risk management is enhanced and risk management is embedded in the corporation’s culture.

Maintain a ‘structured’ risk management rating from Comcover.

Ensure that internal audit recommendations are included in business risk and fraud control plans and actioned accordingly.

Ensure that business risk and strategic risk are reviewed every six months by the Senior Leadership Group and the Finance, Risk and Audit Committee.

Identify work health and safety hazards and implement mitigations.

Legal services

Protect the GRDC’s legal interests.

Provide legal support to the organisation that is timely and of high quality and builds relationships with stakeholders.

Provide high-quality secretarial support to the Board and its sub-committees.

Provide legal seminars and fact sheets on contractual agreements, freedom of information, privacy and other legal topics, for all staff.

Corporate governance

Maintain a robust system of governance.

Ensure compliance with requirements under the Primary Industries Research and Development Act 1989, the Public Governance, Performance and Accountability Act 2013 and ministerial directions.

Ensure that planning and reporting documents (the annual report, annual operational plan and portfolio budget statements) meet statutory requirements and are published and submitted on time.

Manage compliance through appropriate control systems and an ethical business culture.

Corporate objectivesThe Board assesses the overall performance of the GRDC based on how well the corporate objectives have been achieved. The objectives are agreed to by the Senior Leadership Group and the Board and integrated into business group and individual work plans.

Table 12 provides details of key corporate objectives and performance indicators for 2014–15.

Table 12: Corporate objectives and key performance indicators, 2014–15

Key objective Stakeholder/activity Key performance indicators

Stakeholder satisfaction

Growers Proportion of growers rating the overall performance of the GRDC as fairly high or very high—80%, of which 22% rate it very high.

Proportion of growers comfortable or extremely comfortable with paying the levy—77%, of which 15% are extremely comfortable.

Proportion of growers directly benefiting from research that the GRDC has had a role in—>67%.

Research partners Overall satisfaction with the GRDC’s performance—an increase of 0.5 units compared to the 2013–14 Grower Survey result.

Proportion of researchers rating the quality of the relationship as fairly high or very high—89%, of which 35% is very high.

Proportion of researchers giving a positive comment when asked to provide their view on the GRDC’s processes and administrative requirements—50%.

Government Overall satisfaction with the GRDC’s performance—an increase of 0.5 units over the 2013–14 Grower Survey result.

Strategy Strategy development and implementation

Milestones in implementation plans achieved.

Operational performance

Performance against targets in the 2014–15 Annual Operational Plan

100% of the targets in the Annual Operational Plan achieved.

2014–15 planned project contracting 100% of planned 2014–15 contracting complete by 30 June 2014.

2015–16 planned project contracting 100% of planned 2015–16 contracting complete by 30 June 2015.

New investments identified for 2015–16

Quality and quantum of project write-ups as measured through feedback from National Panel.

Progress reports assessed on time 100% of progress reports assessed on time.

Final reports assessed on time 100% of final reports assessed on time.

Financial performance

Operating expense management Operating expenditure within budget.

Achievement of approval of R&D expenditure

Actual R&D expenditure within 5% of budget.

People Safe workplace Lost time injury rate less than 4.6 days per person per year.

Staff satisfaction Overall satisfaction with GRDC’s performance as an employer—an increase of >0.5 units demonstrated through the staff survey.

Staff engagement as demonstrated through the staff

Key objective Stakeholder/activity Key performance indicators

survey.

Staff enablement as demonstrated through the staff survey.

Board satisfaction Overall satisfaction with the Senior Leadership Group’s attention to quality, timeliness and responsiveness as measured through Board feedback.

4 Estimated income and expenditureIncomeThe GRDC’s total income in 2014–15 is forecast to be $187.3 million.

Figure 6 shows the sources of the GRDC’s forecast total income for 2014–15 in percentage terms.

Figure 6: Forecast total income

In dollar terms:

Australian Government contributions are expected to be $68.9 million

levy contributions from grain growers are expected to be $104.7 million

income from grants is estimated to be $0.7 million

other income, which includes interest on investments and royalties, is expected to be $13.0 million.

ExpenditureThe GRDC Board has approved an annual operating expenditure of $213.1 million and capital/equity investment of $6.1 million in 2014–15. Operating expenditure reflects an increase of approximately 12.0 percent in comparison to the 2013–14 expenditure budget.

Table 13 summarises the GRDC’s estimates of expenditure for 2014–15. These figures are indicative only. Changes in the GRDC’s operating environment may require the corporation to vary the total expenditure or specific allocations to secure its financial objectives.

Figure 7 shows the break-up of the operating expenditure budget between management and RD&E expenditure, highlighting the proportions allocated to new and ongoing RD&E investments.

Figure 7: Forecast operating expenditure

Table 13: Estimates of expenditure2013–14

$m2014–15

$m2014–15

%

RD&E investments

1 Meeting market requirements 16.7 16.3 7.7

2 Improving crop yield 40.0 39.3 18.4

3 Protecting your crop 36.3 37.7 17.7

4 Advancing profitable farming systems 33.8 33.5 15.7

5 Improving your farm resource base 9.8 13.9 6.5

6 Building skills and capacity 7.8 9.8 4.6

Foundational activities 12.7 8.9 4.2

R&D managementa 0.7 25.1 11.8

Strategic investmentb 14.5 7.5 3.5

RD&E budget allocation 172.3 192.0 90.1

Management

Employeesc 9.2 11.1 5.2

2013–14$m

2014–15$m

2014–15%

Suppliersd 8.7 10.0 4.7

Management budget allocation 17.9 21.1 9.9

Total operating expenditure 190.2 213.1 100.0

Total capital budget allocation 10.7 6.1

a R&D management includes as at 1 July 2014 unallocated investment in 2014–15.

b Strategic investment includes the implementation of the Grains Industry National Research, Development and Extension Strategy, emerging issues, contingency planning, project variation, impact assessment, project reviews, share amortisation, monitoring and evaluation.

c Employee costs include remuneration of directors and committee members.

d Supplier costs include depreciation, amortisation and levy collection/management expenditure.

Management costs—costs of employees and suppliers—are budgeted at $21.1 million, or 9.9 percent of the total expenditure.

New RD&E investment is budgeted at $53.5 million (including $0.4 million of grants expenditure), or 25.1 percent of the total expenditure.

Ongoing RD&E investment—strategic investment and continuing commitments to existing projects—is budgeted at $138.5 million, or 65.0 percent of the total expenditure.

The RD&E expenditure for 2014–15 includes a component of $268.1 million which relates to long-term (three years or more) contractual commitments. Figure 8 shows the GRDC’s long-term contractual commitments by calendar year as at 7 May 2014.

Figure 8: Break-up of forward contractual commitments by year, as at May 2014

ReservesThe GRDC’s revenue depends on grain production levels, prices and growers’ marketing intentions, all of which can be highly variable. To reduce the impact of fluctuations in these variables on the industry’s annual RD&E effort, and safeguard its ongoing RD&E investment, the GRDC manages financial reserves. The reserves are accumulated in years of high-value production and drawn on in years when revenue is lower. Reserves include R&D share investments that are not commonly traded as well as fixed assets. Easily tradable assets form liquid reserves.

The GRDC aims to maintain the liquid reserves at a level between 40 percent and 70 percent of the following year’s expenditure. Currently, the level slightly exceeds the 70 percent target. The reserves have grown because of increases in income over budget expectations, caused by a sharp increase in grain prices and volume of production being higher than expected.

Careful management of the reserves has placed the GRDC in a strong position to increase RD&E expenditure above the projected

income for 2014–15. Therefore, the GRDC is budgeting for an operating deficit of $25.8 million for 2014–15, to be funded from the reserves. The operating loss for 2014–15 was approved in April 2014 by the Minister for Finance.

Payments to Grain Producers AustraliaGrain Producers Australia (GPA) is the GRDC’s representative organisation under the Primary Industries Research and Development Act 1989.

In accordance with the Guidelines on Funding of Consultation Costs by Primary Industries and Energy Portfolio Statutory Authorities, the GRDC may:

meet GPA’s costs in preparing for and attending formal consultative meetings (including associated travel and accommodation costs) with the GRDC to assess the GRDC’s performance against the industry’s expectations

provide GPA with funding for its costs incurred in preparing for and attending other meetings considered relevant to being the representative body, the Australian grains industry R&D strategic direction and agreed projects relevant to the GRDC’s functions.

The GRDC has made an allowance in its planned RD&E investment for 2014–15 to support GPA up to a maximum of $90,000 for GPA to consult with organisations such as the Department of Agriculture, including the Levies Revenue Service, and with other grains industry representative bodies.

GPA’s actual expenditure will be published in the GRDC’s annual report for 2014–15.

Expenditure to meet Australian Government research prioritiesTable 14 summarises the expected total expenditure allocated against each of the Australian Government’s Strategic Research Priorities and their associated goals for 2014–15, while Table 15 summarises the expected total expenditure allocated against each of the Australian Government’s Rural R&D Priorities for 2014–15. The allocation of funds is shown in both dollar and percentage terms for each investment theme and for the cross-theme investment categories.

Table 14: Investments addressing Australian Government Strategic Research Priorities (dollar values and percentages)

Living in a changing environment

Promoting population health and wellbeing

Managing our food and water assets

Securing Australia’s place in a changing

world

Lifting productivity and economic growth Othera Total

1.1 1.2 1.3 2.1 2.2 2.3 3.1 3.2 3.3 4.1 4.2 4.3 5.1 5.2 5.3

$m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m

1 Meeting market requirements - - - - - - - - 16.33 - - - - - - - 16.33

2 Improving crop yield - - - - - - 39.34 - - - - - - - - - 39.34

3 Protecting your crop - - - - - - 35.38 - - - 2.32 - - - - - 37.70

4 Advancing profitable farming systems - - - - - - - - - - - - 33.55 - - - 33.55

5 Improving your farm resource base - 5.32 - - - - 8.23 0.39 - - - - - - - - 13.94

6 Building skills and capacity - - - - - - - - - - - - - - 9.88 - 9.88

Foundational activities - - - - - - - - - - - - - - - 8.95 8.95

R&D management - - - - - - - - - - - - - - - 32.31 32.31

Total - 5.32 - - - - 82.95 0.39 16.33 - 2.32 - 33.55 - 9.88 41.26 192.00

% % % % % % % % % % % % % % % % %

1 Meeting market requirements - - - - - - - - 8.50 - - - - - - - 8.50

2 Improving crop yield - - - - - - 20.49 - - - - - - - - - 20.49

3 Protecting your crop - - - - - - 18.43 - - - 1.21 - - - - - 19.64

4 Advancing profitable farming systems - - - - - - - - - - - - 17.48 - - - 17.48

5 Improving your farm resource base - 2.77 - - - - 4.28 0.20 - - - - - - - - 7.25

6 Building skills and capacity - - - - - - - - - - - - - - 5.15 - 5.15

Foundational activities - - - - - - - - - - - - - - - 4.66 4.66

R&D management - - - - - - - - - - - - - - - 16.83 16.83

Total - 2.77 - - - - 43.20 0.20 8.50 - 1.21 - 17.48 - 5.15 21.49 100.00

1.1: Identify vulnerabilities and boundaries to the adaptability of changing natural and human systems; 1.2: Manage risk and capture opportunities for sustainable natural and human systems; 1.3: Enable societal transformation to enhance sustainability and wellbeing; 2.1: Optimise effective delivery of health care and related systems and services; 2.2: Maximise social and economic participation in society; 2.3: Improve the health and wellbeing of Aboriginal and Torres Strait Islander people; 3.1: Optimise food and fibre production using our land and marine resources; 3.2: Develop knowledge of the changing distribution, connectivity, transformation and sustainable use of water in the Australian landscape; 3.3: Maximise the effectiveness of the production value chain from primary to processed food; 4.1: Improve cyber security for all Australians; 4.2: Manage the flow of goods, information, money and people across our national and international boundaries; 4.3 : Understand political, cultural, economic and technological change, particularly in our region; 5.1: Identify the means by which Australia can lift productivity and economic growth; 5.2: Maximise Australia’s competitive advantage in critical sectors; 5.3: Deliver skills for the new economy.

a Other includes a number of investments that relate to commercialisation and $19.0 million of unallocated investment.

Table 15: Investments addressing Australian Government Rural R&D Priorities (dollar values and percentages)

Productivity and adding

value

Supply chain and markets

Natural resource

management

Climate variability

and climate change

BiosecurityInnovation

skillsTechnology Othera Total

$m $m $m $m $m $m $m $m $m

Theme 1—Meeting market requirements 7.18 7.43 - 0.04 1.54 0.06 0.08 - 16.33

Theme 2—Improving crop yield 26.97 1.75 2.49 1.90 3.47 1.64 1.12 - 39.34

Theme 3—Protecting your crop 15.47 0.40 1.18 - 20.49 0.04 - 0.12 37.70

Theme 4—Advancing profitable farming systems 28.74 - 3.40 0.17 1.10 0.14 - - 33.55

Theme 5—Improving your farm resource base 6.26 0.10 3.95 3.46 0.17 - - - 13.94

Theme 6—Building skills and capacity 2.10 - - - 0.13 7.65 - - 9.88

Foundational activities 3.99 0.01 0.17 - - 4.78 - - 8.95

R&D management 0.71 - - - - 3.10 0.08 28.42 32.31

Total 91.42 9.69 11.19 5.57 26.90 17.41 1.28 28.54 192.00

% % % % % % % % %

Theme 1—Meeting market requirements 3.74 3.87 - 0.02 0.80 0.03 0.04 - 8.50

Theme 2—Improving crop yield 14.03 0.91 1.30 0.99 1.81 0.86 0.59 - 20.49

Theme 3—Protecting your crop 8.07 0.21 0.61 - 10.67 0.02 - 0.06 19.64

Theme 4—Advancing profitable farming systems 14.98 - 1.77 0.09 0.57 0.07 - - 17.48

Theme 5—Improving your farm resource base 3.25 0.05 2.05 1.81 0.09 - - - 7.25

Theme 6—Building skills and capacity 1.09 - - - 0.07 3.99 - - 5.15

Foundational activities 2.07 0.01 0.09 - - 2.49 - - 4.66

R&D management 0.37 - - - - 1.61 0.04 14.81 16.83

Total 47.60 5.05 5.82 2.91 14.01 9.07 0.67 14.87 100.00

a Other includes a number of investments that relate to commercialisation and $19.0 million of unallocated investment.

Key contactsRichard ClarkChair02 6166 4500

John HarveyManaging Director02 6166 4500

Brondwen MacLeanExecutive ManagerResearch Programs02 6166 4500brondwen.maclean@grdc.com.au

Steve ThomasExecutive ManagerCommercial02 6166 4500steve.thomas@grdc.com.au

Stuart KearnsExecutive ManagerRegional Grower Services02 6166 4500stuart.kearns@grdc.com.au

Leecia AngusExecutive ManagerCorporate Services02 6166 4500leecia.angus@grdc.com.au

James ClarkNorthern Regional Panel Chair0427 545 212colane@bigpond.com

Keith PengilleySouthern Regional Panel Chair0448 015 539kgpengilley@bigpond.com

Peter RobertsWestern Regional Panel Chair0428 389 060peterroberts@esat.net.au

Sharon O’KeeffeManager Grower Services North0409 279 328sharon.okeeffe@grdc.com.au

Andrew RiceManager Grower Services South0427 965 469andrew.rice@grdc.com.au

Darren Hughes

Manager Grower Services West0409 249 420darren.hughes@grdc.com.au

Postal addressGrains Research and Development CorporationPO Box 5367KINGSTON ACT 2604

LocationLevel 4, 4 National CircuitBARTON ACT 2600

Telephone: 02 6166 4500Facsimile: 02 6166 4599Website: www.grdc.com.au

Production notesCompliance editor: Catherine WellsConcepts, text and research: GRDCEditing: WordsWorth Writing, CanberraDesign and typesetting: Giraffe VCM

© Grains Research and Development Corporation 2014ISSN 1038-670X

This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without permission from the Grains Research and Development Corporation.