In a history-making move, GRDC has recommended a review to determine the optimum or 'right-size' research and development investment to continue to deliver ongoing, cutting-edge, innovative outcomes to Australian grain growers.
This is the first time in the organisation's 34-year history that the GRDC Board and Executive team have triggered an in-depth review that will assess this critical question. To help answer this, the review will focus on three key areas: GRDC's financial position; the sector's research and development capacity alongside research, development and extension (RD&E) opportunities; and GRDC reserves and the grains industry levy.
GRDC Chair and Goondiwindi grain grower John Woods said the recommendation came as the organisation and the Australian grains industry continued to be the beneficiaries of productivity growth, strong seasons and commodity prices.
"As an organisation, GRDC is in an extremely favourable financial position: our profit and loss statement and balance sheet reflect those of growers across Australia," Mr Woods said.
"On the back of a number of outstanding seasons, GRDC now has strong cash reserves, and in response we have taken the unique opportunity to increase our investment in RD&E from $180 million annually to $245 million. GRDC has committed to this 30 per cent increase on behalf of growers for at least the next five years.
"GRDC's decision to recommend a review is a proactive move to ensure we have a 'right-size' sustainable investment spend in RD&E, an in-depth understanding of research and development capacity and a fair levy that together ensures consistent, ongoing, high-quality and innovative investment for Australian grain growers."
The recommendation has the support of the grains industry's representative organisations (ROs), GrainGrowers Limited and Grain Producers Australia. While GRDC has initiated the review, it will be overseen by an industry working group formed with representatives from all three organisations and expected to deliver recommendations by June 2025.
Mr Woods said GRDC had always taken a financially prudent, long‑term view to ensure that RD&E investments were consistent and not impacted by seasonal conditions, as you cannot turn RD&E 'on and off' in response to grain yields and prices.
"Like grain growers' incomes, GRDC's revenue can vary significantly year-to-year, depending on the size of the harvest and the prices of our 25 leviable commodities. GRDC manages these fluctuations by maintaining an appropriate reserve level," he said.
"Since 2019-20 GRDC has benefited from strong industry performance due to positive environmental conditions coinciding with higher prices. This has resulted in significant growth in reserves even with the increase in RD&E investments by an additional $60 million per year.
"This extraordinary performance was without question enabled by growers, whose willingness to embrace practice changes and adopt innovative technologies from research partners, service industry, breeders and others illustrates how valuable RD&E is to the productivity and profitability of their farming businesses."
Mr Woods said the review would not change GRDC's mandate to invest in RD&E for the enduring profitability of Australian grain growers or alter the investment scope as defined by Federal Government legislation.
"This review will be focused on essentially assessing and determining the 'right-size' RD&E investment needed into the future to ensure GRDC continues to deliver effective, highly impactful outcomes that drive practice change on-farm, support the adoption of new technology and genuinely improve growers' bottom lines," he said.
"This is a complex process that requires a united industry approach. GRDC is committed to working closely with our ROs and ensuring through the working group that grain growers are well informed through the review process. While work has started, the industry working group will need time to analyse data and utilise external expertise to inform their considerations, and ultimately recommendations."
However, Mr Woods said growers and the broader grains industry could be assured that the review would not distract the organisation from continuing to manage and invest in critical new and ongoing RD&E investments.
Background
GRDC is responsible for planning, investing in and overseeing research, development and extension (RD&E) for 25 leviable grain crops. Established as a corporate Commonwealth entity under the Primary Industries Research and Development Act 1989 (PIRD Act) GRDC's portfolio department is the Australian Government Department of Agriculture, Fisheries and Forestry.
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. GRDC revenue for investment in RD&E predominantly comes from levies paid by grain growers and contributions made by the Australian Government, with additional income from interest, royalties and grants.
