We need more public investment in rural R&D – not less

Canberra-based right wing think-tank the Institute for Public Affairs last week released a long list of cuts to a range of different Australian government departments and programs that they said would help bring the federal budget back into line. Whilst some of the things they propose might make theoretical sense, there was no research or analysis behind this list. Furthermore, their comments demonstrated little understanding of flow-on effects and on-ground realities.

Nobody could argue that there aren’t savings to be made in federal government expenditure – because there clearly are. Nobody could argue that there aren’t areas where there is duplication between federal and state governments – because there clearly are. However, nobody could argue that dismantling whole departments should be undertaken without careful and informed analysis.

One of their suggestions would amount to de-funding all of the Department of Agriculture, Fisheries and Forestry, including the rural research and development corporations. In their words, the proposed cut would be “$2 billion in agriculture forestry and fishing; much of this deals with environmental barriers and industry-specific research activities, none of which have ever produced benefits significant enough to warrant their continuing funding”. Their words – I kid you not – despite report after report that has clearly demonstrated the benefits that accrue to all Australians (and people everywhere) from improving our agricultural performance.

Australia has a long history of investment in rural R&D. The strength and productivity of our sector has been built on the back of this investment. However, it should be remembered that the return period on such investments can be quite long, so today we are benefitting from the investments made by past generations, notably in the 1960s and 1970s.

Over recent years, government investment in rural research and development has been declining. In 1984, agricultural R&D investment represented around 17% of the total investment in R&D in Australia. By 2006, this had fallen to just on 5%. The government’s own analysis shows rural and production-based CRC research is being left behind in the race for a share of taxpayers’ dollars. Rural research has stagnated at about $240m pa since Labor came to power in 2007.

So the harsh reality is that this means we’ve just about run out of ‘banked’ innovation and efficiency gains – and this at a time when margins in farming have never been tighter.
Yet, as world food demand increases and food security becomes a significant public policy issue, improved productivity is important if we are to retain (or even increase) our ability to both feed Australians and make a continued contribution to the world’s requirements.

It has been calculated that Australia’s agricultural exports feed 60 million people overseas. Australia’s Chief Scientist said in a report last year that, if you include all the spin-offs from Australian agricultural knowledge and expertise, then that number is more like 400 million people.

That’s really punching above our weight.

All the evidence shows that in these parlous economic times our economy is largely being carried by Australia’s primary industries. All the experts are as one in saying that, if we are to achieve the productivity increases necessary to ensure we can meet world food demands in coming decades, we need to increase investment in agricultural R&D. Analysis of R&D programs has demonstrated that every dollar invested in rural research and development generates on average a further $11 to the Australian community.

Of course, the question of how to utilise science for the benefit of industry and business is not new and increased funding is not the whole answer. The “right” answers have morphed continually across countries and for decades. What gets obscured in the discussion at times, and yet has remained relatively constant, is the fundamental value of science. And we know that science only succeeds when we have a pool of talented, creative, and motivated people. Creating and maintaining a diverse environment where these people can flourish is a necessity.

It is important to recognise therefore, that increased investment in R&D – by both public and private sectors – will have the greatest long-term impact in the drive for productivity improvements, efficiency gains and, in the longer term, increased economic prosperity.

Clearly, the IPA’s comments are ill-informed; and reflect the fact that they have little expertise and even less understanding of our agriculture sector.

In the overall scheme of things, Australia is not a large player in the international agricultural scene. We are however recognised for our innovation, adaptability and expertise. If we are to continue to deliver outcomes supporting Australia’s future economic growth and national security, there is a need for more public investment in rural R&D – not less.