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Rural Research and Development Corporations

This inquiry report was released on 15 June 2011.

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  • Key points
  • Contents
  • Through the Rural Research and Development Corporations (RDCs), rural industries and the Australian Government together invest some $490 million a year in R&D.
  • This co-investment model has important strengths, including: helping to ensure that public money is not spent on research of little practical value; and facilitating greater and faster uptake of research outputs.
  • However, as currently configured, the model has some significant shortcomings.
    • It does not cater well for broader rural R&D needs.
    • The overall level of public support for industry-focused research is too high given the sound financial reasons that producers or industries would have to fully fund much of this research themselves.
    • The basis for the Government's matching contribution to RDCs provides no incentive for producers to increase their investments in the model over time.
  • While the broad model should be retained, significant changes to the way in which the Government contributes its funding are therefore called for. Specifically:
    • The current cap on dollar for dollar matching of industry contributions by the Government should be halved over a ten-year period
    • A new, uncapped, subsidy at the rate of 20 cents in the dollar should be immediately introduced for industry contributions above the level that attracts dollar for dollar matching
    • A new, government-funded, RDC - Rural Research Australia (RRA) - should be created to sponsor broader rural research. With RRA in place, the other RDCs (except for the Fisheries RDC) should be left to focus predominantly on funding research of direct benefit to their industry constituents.
  • These new arrangements would result in a modest reduction in total government funding for the RDC model - though with a similarly modest increase in private contributions, the overall amount of funding available to the RDCs could increase.
    • More importantly, the redistribution of some public money to broader research would deliver better value for the community from its investment in the model.
  • These funding changes should be supported by a new set of program principles, setting out the broad obligations on RDCs in return for their public funding and how the Government should discharge its responsibilities on behalf of the wider community.
  • Some more specific changes should also be made, including to:
    • enable (though not require) the appointment of a 'government director' to the board of an RDC
    • improve the robustness and transparency of project evaluations, independent performance reviews, and the monitoring of program outcomes by the Government.
  • There is also a need for better data on overall rural R&D funding and spending.
  • However, overlaying the framework with a target level of total spending on rural R&D, or a target 'research intensity', would not be appropriate.
  • Preliminaries
    • Cover, Copyright, Letter, Terms of reference, Contents and Abbreviations
  • Overview - including key points
  • Recommendations and findings
  • Chapter 1 About the inquiry
    • 1.1 The context for this inquiry
    • 1.2 The Commission's approach
    • 1.3 A 'road map' for the report
  • Chapter 2 Rural research in Australia
    • 2.1 The broad framework
    • 2.2 The RDC model
    • 2.3 Recent RDC activity
    • 2.4 The international context
  • Chapter 3 Why support rural R&D?
    • 3.1 The benefits of rural R&D
    • 3.2 Market failure
    • 3.3 Other arguments for government intervention
    • 3.4 Forms of government intervention
  • Chapter 4 Public funding principles
    • 4.1 The basis for government involvement
    • 4.2 Funding level issues
  • Chapter 5 How well has the RDC model performed?
    • 5.1 The benefits from RDC research
    • 5.2 Strengths of the RDC model
    • 5.3 The value of public investment in the RDCs
  • Chapter 6 Reconfiguring the RDC model
    • 6.1 How significant are the problems in the current model?
    • 6.2 How do the alternatives measure up?
    • 6.3 A modified RDC model would be the best approach
  • Chapter 7 Future funding of the industry RDCs
    • 7.1 The draft report funding proposal
    • 7.2 Responses to the draft report
    • 7.3 The Commission's assessment
    • 7.4 The revised funding proposal
  • Chapter 8 Catering for broader rural R&D
    • 8.1 Funding separation options
    • 8.2 The draft report proposal
    • 8.3 Responses to the draft report proposal
    • 8.4 The Commission's assessment
    • 8.5 Creating Rural Research Australia
  • Chapter 9 Governance and reporting
    • 9.1 A principles-based approach
    • 9.2 Clarifying and refining goals and functions
    • 9.3 Promoting effective communication
    • 9.4 Improving governance and administration
    • 9.5 Strengthening performance monitoring and enforcement
  • Chapter 10 Levy arrangements
    • 10.1 Some more detail on levy arrangements
    • 10.2 Improving the levy system
    • 10.3 Should levies be imposed on processors?
    • 10.4 Voluntary contribution issues
    • 10.5 Are all levy payers receiving sufficient benefits?
  • Chapter 11 Some broader framework issues
    • 11.1 Collecting better funding and spending data
    • 11.2 Improved policy and program coordination
    • 11.3 Cost shifting
    • 11.4 The role of government in regard to extension
    • 11.5 R&D capacity issues
    • 11.6 Facilitating private investment in rural R&D
  • Chapter 12 Impacts and review
    • 12.1 What has the Commission sought to achieve?
    • 12.2 Likely impacts
    • 12.3 Is there any case for delayed introduction?
    • 12.4 Review arrangements
  • Appendix A Public consultation
  • Appendix B Quantitative studies on the benefits of investment in rural R&D
  • Appendix C Current assistance levels
  • References

Printed copies

Printed copies of the full report can be purchased from Canprint Communications.

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