Enhancing Private-Sector Investment in Agricultural Research Development and Extension (R,D&E) in Australia

If Australian agriculture is to remain competitive, partnerships between private- and public-sector agricultural research, development and extension (R,D&E) investors must be fostered.

In addition, better data on where agricultural R,D&E investment is occurring will help to direct public funds to ensure critical capacity is maintained.

A new research report from the Australian Farm Institute delves into private-sector agricultural R,D&E investment in Australia to find ways to incentivise such investment, with the longer-term goal of optimising national agricultural productivity growth.

The correlation between long-term publicly-funded agricultural R,D&E investment and agricultural productivity growth is well understood, according to the study, but less well understood are the links between private-sector agricultural R,D&E investment and agricultural productivity growth.

There is growing concern that the reduction of investment in agricultural R,D&E over the past two decades in Australia is a key factor in the decline of Australian agricultural productivity.

For a relatively small and agriculturally unique market such as Australia, the engagement of the private sector in agricultural R,D&E investment is essential to maximise national agricultural R,D&E efforts, but also challenging due to the lack of information about such investment.

Farm sector productivity growth has, at times, been higher than the rate of productivity growth of any other sector in the national economy, suggesting that agricultural R,D&E investment has delivered valuable national benefits. However, in recent years, the rate of growth in Australian agricultural productivity has declined considerably, according to the Organisation for Economic Cooperation and Development.

By better understanding the factors affecting private-sector agricultural R,D&E investment decisions, the opportunity exists to encourage increased investment.

Farmers have long held the view that sustained investment in agricultural R,D&E is a critical element in stimulating innovation and maintaining relatively high levels of productivity growth.

Intuitively, Australian agriculture is likely to achieve maximum benefits from R,D&E investments where there is complementarity between the public and the private sector in investing in agricultural R,D&E.

Investment by the private sector in agricultural R,D&E in Australia is increasingly important if overall research intensity is to be maintained.

The report also recommends that agricultural R&D agencies and universities should further develop engagement with private-sector farm advisors, as these now constitute the major communications pathway by which Australian farmers become aware of, and consider the adoption of new innovations.

In brief, the report’s recommendations include:

  1. A more descriptive methodology should be developed for categorising agricultural R,D&E expenditure
  2. Participation in programs which attempt to match innovation and commercialisation culture between public and privately-funded organisations should be incentivised
  3. Australian governments should commit to sustain – and ideally increase – public funding for agricultural R&D
  4. A standardised database should be developed for agricultural research projects
  5. Australian regulatory approval procedures should recognise and use the results from approved international approval processes to reduce the cost of compliance for developing products for the Australian market
  6. Australian Government agricultural R&D agencies should develop and actively encourage collaborative partnerships with large multinational agribusiness companies
  7. Australian Government agricultural R&D agencies and universities should develop and implement regular and formal engagement with private-sector farm advisors.

Enhancing Private-Sector Investment in Agricultural Research Development and Extension (R,D&E) in Australia is now available. Institute members can download the report from the Members' Library; non‑members can purchase copies for $77. NB: Hard copies of this report will be available from late January 2018

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