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Jump in value of rural research and development

The value of Australian rural Research and Development (R&D) is on the rise, according to a new report released last week by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

Research and development (R&D) is central to the productivity, competitiveness and sustainability of Australia’s agriculture industry but limited information is available on how much Australia invests in rural R&D. The report, Rural research, development and extension investment in Australia, describes trends in rural R&D investment in recent years and identifies the contribution of the public and private sectors.

Rural R&D is defined to include the research categories of agriculture, fisheries and forestry, sustainable production, agricultural inputs and rural processing. The definitions of each category were drawn from the ABS (2008) research classifications, based on the purpose of the research.

The main R&D funding providers are the Australian and state and territory governments, universities and the private sector.

The report estimated that total funding for rural R&D in Australia increased over the 10 years between 2005–06 and 2014–15 from $2.3 billion to $3.0 billion, in real terms. Growth in total funding for rural R&D was driven by increased investment from the public sector and private firms.

Rural research, development and extension investment in Australia, Research Report 17.11, September 2017, Department of Agriculture and Water Resources, ABARES

Acting Assistant Secretary of ABARES’ Agricultural Productivity and Farm Analysis branch, David Galeano, said “private sector funding of rural R&D and extension grew rapidly from just over $1 billion in 2005–06 to $1.6 billion in 2014–15. This increase is likely due to greater competition, new investment opportunities and Australia’s strong protection of intellectual property rights."

Based on recent trends in Australia and internationally, the private sector has the potential to play a greater role in Australian R&D investment. The private sector concentres on marketable technologies like those related to seeds or chemicals that are more likely to generate additional profits. However, growth in private sector investment is not guaranteed and will depend on both the expected return on R&D investment and the international competitiveness of our R&D providers.

“Over the 10 years examined, public sector funding for rural R&D grew slowly in comparison—from $1.5 billion in 2005–06 to $1.7 billion in 2014–15," Mr Galeano said.

“The Australian Government was the largest single contributor—with funding rising from over $880 million in 2005–06 to $1.1 billion in 2014–15—and university contributions increased from $264 million in 2005–06 to just short of $380 million in 2014–15.

“The growth in funding from the Australian Government and universities came at a time of declining funding from the state and territory governments—from $390 million in 2005–06 to $280 million in 2014–15.

“Public sector funding has been important for supporting long–term fundamental science and research, whereas the private sector has tended to concentrate on more readily marketable technologies like those related to seeds or chemicals.

“Public budget pressures mean federal and state funding for rural R&D is unlikely to increase significantly, however contributions from universities could rise as they seek to improve their international standing through R&D.”

Rural research, development and extension investment in Australia, Research Report 17.11, September 2017, Department of Agriculture and Water Resources, ABARES ** Note: Excludes funding for extension. For the rural R&D performers and intermediaries (RDCs and CRCs), the diagram shows the shares of funding they each received from the various funding sources. R&D performers also received funding from ‘other’ sources that could not be included in the funding estimate.

According to the report, looking ahead, growth in funding of rural RD&E has mixed potential but continued investment in R&D will be essential to improve agricultural productivity and profitability.

A copy of the report can be found here http://www.agriculture.gov.au/abares/research-topics/productivity/rural-rde-investment.

References:

Rural research, development and extension investment in Australia, ABARES

Australian rural R&D on the rise, ABARES

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