The
Future Farm Industries
Cooperative Research Centre Profitable Perennials™ for Australian landscapes
Business Plan
2007-08 to 2013-14
Date: 24 January 2006
Preface
The Future Farm Industries Cooperative Research Centre (FFI CRC) is a proposed incorporated joint venture under the Australian Government’s CRC Programme. On 22 December 2006 the applicants were advised that their application for funding was successful. Planning and actions are now under way to form the research company and complete the necessary agreements among participants by 31 May 2006, and for funding and activities to start on 1 July 2007. This Business Plan is the document that will guide the development and formation of the FFI CRC, and at the same time fully informing: • existing participants of the programs, products and milestones we are committed to achieving in its 7 year life • potential new investing partners about opportunities for collaborating with the CRC, and • stakeholders with a strong interest in the knowledge, products and services, and benefits that will flow from the CRC’s activities. The Business Plan is an abridged version of the Full Business Case put to the 2006 selection round of the CRC Programme, and its format reflects the template used for that application. The Business Plan will be revised in 2007-08 to reflect strategic planning conducted by FFI CRC’s Board.
Who Are We?
The FFI CRC’s genesis was in the CRC for Plant-based Management of Dryland Salinity (CRC Salinity). In 2004 it took a critical decision that the next phase of salinity R&D should be focussed on farming systems built on the concept of ‘profitable perennials’. Sixteen core participants are committed to forming the FFI research company and investing in its programs: • Meat & Livestock Australia • Grains Research & Development Corporation • Australian Wool Innovation Limited • Landmark – an AWB company • The University of Western Australia • The University of Adelaide • The University of Melbourne • Charles Sturt University • Commonwealth Scientific & Industrial Research Organisation • Department of Agriculture and Food, Western Australia • Department of Environment and Conservation, WA • South Australian Research & Development Institute • Department of Water, Land and Biodiversity, South Australia • Department of Primary Industries, Victoria • Department of Primary Industries, New South Wales • Department of Natural Resources, New South Wales
1
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Six Supporting Participants signed their intention to participate in the FFI CRC, and will be project investors and partners. They are: Kondinin Group, Enecon Pty Ltd, Renewable Oil Company Ltd, The Oil Mallee Company, Forest Products Commission and North Central Catchment Management Authority.
Want Further Information?
Key contacts
Kevin Goss Andrew Inglis Lucinda Corrigan Mark Stickells Mike Ewing John Powell
Address
Chief Executive Officer Designate Chair Elect Deputy Chair Elect A/Chief Operating Officer A/General Manager Research A/General Manager, Commercialisation and Utilisation
c/- CRC for Plant-based Management of Dryland Salinity The University of Western Australia M081 35 Stirling Highway Crawley WA 6009
Phone
Natalie Lennon, Executive Assistant: 08 6488 1952
Mobile
Kevin Goss: 0418 274 361
Email
Kevin Goss: kgoss@fnas.uwa.edu.au
Web
www.crcsalinity.com.au
2
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Contents
Preface ...................................................................................................................................................1 Who Are We?....................................................................................................................................1 Want Further Information?..............................................................................................................2 Contents ............................................................................................................................................3 Section 1: Economic Benefits............................................................................................................4 Industry opportunities and needs..................................................................................................4 Contribution to Industrial, Commercial and Economic Growth ..............................................5 Industrial and Commercial Growth Benefits for End-users ........................................................6 Triple bottom line benefits ..............................................................................................................8 Contribution of Industrial and Commercial Growth to Economic Growth ............................9 Robustness of Estimates - Application principles ......................................................................10 Outcomes that the CRC will achieve and the scale (quantity and value) of each outcome. ..........................................................................................................................................................10 Key contributions of the outcomes to specific National Research Priority Goals ...............11 Section 2: Commercialisation and Utilisation...............................................................................12 FFI CRC Business Opportunities ....................................................................................................12 FFI CRC Customers and End-Users...............................................................................................14 FFI CRC Product Development....................................................................................................14 FFI CRC’s Path to Adoption ..........................................................................................................16 Commercialisation And Utilisation Strategy...............................................................................17 Commercialisation Management...............................................................................................18 Private Sector Participants And Their Role In Commercialisation/Utilisation ........................22 Section 3: Research and Development, Education and Training ............................................23 Strengths of the FFI CRC collaboration.......................................................................................23 Capability of participants in the collaboration.........................................................................25 Research and Development Strategy Programmes................................................................28 Research and Development Programs......................................................................................30 Education and Training Strategy/Program ................................................................................37 Governance Arrangements.........................................................................................................38 Managing Transition from CRC Salinity.......................................................................................39 Section 4: The Financial Case.........................................................................................................43 Return on Investment ....................................................................................................................43 Budget and resource allocations................................................................................................48 Section 5: Outputs and Milestones ................................................................................................50 Commercialisation and Utilisation Strategy - Outputs and Milestones .................................50 Research and Development Programs – Outputs and Milestones........................................54 Education and Training Program - Outputs and Milestones ...................................................60 Section 6: Planned Investment .......................................................................................................64 Contributions...................................................................................................................................64 Planned Allocations.......................................................................................................................70
3
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Section 1: Economic Benefits
“The outcomes will contribute substantially to Australia’s industrial, commercial and economic growth.”
The Future Farm Industries CRC (FFI CRC) will transform agricultural systems across southern Australia by developing Profitable Perennials™, and applying perennial plant technologies to innovative farming systems that: Increase productivity of existing livestock and grain industries; • Develop new regional industries through investment in woody crop production on farm, and • Reduce the risk of natural resource degradation, including dryland salinity, and improve conservation of biodiversity and water resources.
Future Farm Industries CRC Profitable Perennials™ for Australian Landscapes
FFI CRC is a unique co-investment between the three major Australian agricultural R&D investors, the largest agribusiness company, and the combined research power of six state agencies, four CSIRO divisions and four universities. The integrated activities of this partnership will deliver at least $1.36 billion of industrial and commercial growth. It signals a new era in the major broadacre industries cooperating with science to achieve goals of profitability and sustainability.
Industry opportunities and needs
Multi-factor productivity (MFP) growth for agriculture has been substantially higher than for mining, manufacturing or services (2.8% vs around 1%1). Nevertheless, a phase of renewed innovation is required if agriculture is to keep ahead of international competitive pressures, natural resource degradation and climate risk. The need for continuing MFP growth is illustrated by the fact that, since 1953, without productivity growth, the real gross value of agricultural production would have fallen by 60%, rather than growing substantially as it has done2. R&D is a primary driver of this growth, thanks to an exceptionally well performed agricultural R&D sector. However, agriculture’s terms of trade has continued to decline 2.2%/year through this period and productivity growth of the key industries targeted by this FFI CRC proposal lagged behind, with the partial exception of crops. Their MFP growth was 4.7% for 1977-78 to 1989-90, but this dropped to 1.8% for 1988-89 to 2001-023. Recent analysis conducted by the CRC for Plant-based Management of Dryland Salinity (‘CRC Salinity’) has identified a strategy based on Profitable Perennials™ as a key to boost productivity for mixed crop-livestock farming systems. Analyses indicate profit improvements at the farm level by as much as 50% resulting from innovative perennial-based systems4.
1 2 3 4
Productivity Commission 2005, Trends in Australian Agriculture, Research Paper, Ch. 6, Canberra. Mullen, J. (2002) Farm management in the 21st Century, Agribusiness Review 10: paper 5
Productivity Commission 2005, see above.
Ewing M and Flugge F 2004, The benefits and challenges of crop-livestock integration in Australian agriculture, in New directions for a diverse planet: Proceedings of the 4th International Crop Science Congress, Brisbane, Australia, 26 Sep – 1 Oct 2004 | ISBN 1 920842 20 9 | www.cropscience.org.au . Five ‘prospect statements’ in preparation by CRC Salinity; the first – Lucerne Prospects: drivers for 4
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
An additional factor driving the need for innovation is natural resource degradation. For the Murray-Darling Basin, the salinity costs to water, infrastructure and land are estimated at $305 million per year5, while in Western Australia, the value of salinity-related losses of agricultural land will rise to between $170 and $260 million per year6 in coming decades. Given the poor profitability and limited scope of existing perennial plant options available to farmers, the cost of preventing or reversing impacts of salinity on key assets (biodiversity, infrastructure, water) is enormous. For example, the estimated current cost of protecting just 30 biodiversity assets in WA would be $854 million; and the additional costs of maintaining at-risk road and rail is $2.1 billion over 30 years. Investment in this new phase of agricultural innovation will come from Meat & Livestock Australia (MLA), the Grains Research and Development Corporation (GRDC), Australian Wool Innovation Ltd (AWI), Landmark (an AWB company) and key primary industry agencies. This venture will take the CRC in a new direction for natural resource management (NRM). Substantial profitability and productivity growth will create more commercial and sustainable business opportunities while mitigating key long-term risks. Our partners expect this CRC to create more profitable and resilient land uses for wide adoption and assured outcomes for conservation of natural resources. Profitable Perennials™ are the key to future profitability, sustainability and adaptability of Australian agriculture. The CRC Salinity is demonstrating the capacities of these technologies to make greater use of rainfall, runoff and groundwater, convert water to higher value production than current farming practice, while mitigating land degradation. FFI CRC will integrate them into innovative farming systems and new regional industries across approximately 7.5 million hectares of farm land that will increase farm profitability by 10-50% while improving salinity management, biodiversity conservation, water quality and long-term sustainability. FFI CRC, with its industry and R&D providers, will build the necessary capacity in commercialisation and utilisation, and education and training to market Profitable Perennials™ products. It will build on strong networks of influence and knowledge exchange in adoption already established by the CRC Salinity, including 12,000 subscribers to SALT magazine. A looming shortage of scientists in agriculture7, declining State agency extension staff and a high turnover in extension professionals generally8 are placing product delivery at risk. To offset these constraints FFI CRC has sought out organisations new to sustainable agriculture including private companies, catchment management organisations (CMOs) and farm production groups – e.g. Landmark, Enecon, The Oil Mallee Company, North Central Catchment Management Authority (CMA) and Kondinin Group. The CRC will integrate its commercialisation and utilisation, and education and training programs to build new capacity for achieving adoption targets.
Contribution to Industrial, Commercial and Economic Growth
The new CRC focuses its outcomes explicitly on the goal of industrial, commercial and economic growth:
widespread adoption of lucerne for profit and salinity management in the Australian wheatbelt – is due for publication in August 2006. Wilson SM 2004, Determining the Full Costs of Dryland Salinity Across the Murray-Darling Basin, Final Report to The Murray-Darling Basin Commission, Canberra.
5 6
Sparks T, George R, Wallace K, Pannell D, Burnside D and Stelfox L 2006, Salinity Investment Framework Phase II, Western Australia, Department of Environment, Report No. SLUI34. Productivity Commission 2005, as above.
7 8
Roberts K, Paine M, Nettle R and Ho E 2005, Mapping Rural Industry Service Providers, Cooperative Venture for Capacity Building, RIRDC, Canberra. 5
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Industrial growth
• Increased growth in the meat, grain and wool industries, across southern temperate Australia driven by greater productivity and profitability. This benefit will be realised in the medium to long term, within and beyond the life of the new CRC. • Establishing the new woody biomass base for regional manufacturing and processing industries. This benefit will begin in the medium term with value added in the long term, beyond the life of the CRC.
Commercial growth
• Business growth, particularly in the agricultural service industry, coming from demands associated with productivity growth. • New enterprises around new commercial products, and export of technologies and services. This benefit will occur in the short to medium term, within the CRC’s life.
Economic growth
• Added growth to the Australian economy and exports based on the industrial and commercial growth described above. This benefit will occur from the short to the long term, within and beyond the life of the CRC. The estimate of $1.26 billion net present value in commercial and industrial growth generated by the Future Farm Industries CRC9, will be made up of: • $650 million present value of benefits derived from productivity growth in existing farm industries and from additional returns to off-farm investors in new processes and services, such as wood processing. The new CRC is estimated to increase or accelerate the adoption of new perennial plant-based farming systems on 7.5 million hectares (mha) of agricultural land, including 100,000 ha of new woody crops and 850,000 ha of crops and pastures on saltland. This is 12% of the 60 mha sown to crops and pastures in the target zone. • $350 million present value of benefits from commercial gains due to salinity containment. It is assumed conservatively that 1.6 mha of agricultural land will have the onset of salinity delayed or prevented, which is 25-30% of the likely salt-affected area under a ‘business as usual’ scenario. • $360 million present value of benefits from better informed policy and investment of public funds. Work of the CRC with governments, CMOs and regional NRM groups will bring up-todate science and decision tools to better targeting and adoption of land use options, to achieve greater efficiency of investment of public and private funds. • $95 million present value of costs of operating the CRC. This was not a before and after comparison; the benefits attributed to the FFI CRC were estimated relative to the base case of ‘no new CRC’. This counterfactual allowed for innovation and productivity improvement in the absence of the proposed CRC. Selection criterion 4 explains why the basis for our conservative estimates of adoption rates is robust.
Industrial and Commercial Growth Benefits for End-users
Our benefit:cost analysis was based on a comprehensive path model that scaled up the contribution of FFI CRC’s research and commercialisation to industrial and commercial benefits end-users on six pathways, to: • farmers from more productive farming options and farming systems • farmers from improved environmental management
Pannell D 2006, ”Benefit-cost Analysis of Proposed CRC for Future Farm Industries”, The University of Western Australia (independently reviewed by Allen Consulting Group).
9
6
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
• off-farm investors from development of new industries • water users from improved management of water catchments, and • communities through more effective use of public funds in NRM policy programs. Non-financial benefits through enhanced environmental values were also described and are additional to the values above. Additional verification of our estimated benefits came from modelling of contributions of FFI CRC outcomes to industrial and commercial growth and its calibration against independent reference points.
Productivity growth in existing industries
The rates of productivity improvement indicated by the benefit:cost analysis are quite consistent with (indeed conservative relative to) historical rates of productivity growth in the agricultural sector, which are among the highest in the Australian economy (see earlier).
Meat/wool industry: The CRC will increase the productivity of livestock production through applying innovative grazing systems to a new perennial pasture and forage base across agro-climatic zones. We know that a one percentage point increase in pasture utilisation generates $90 m net return to the sheep industry10. There is scope for significant improvement in plant production and efficiency of water use, better adapted to a wider range of agroclimatic zones, through breeding, selection and management. MIDAS modelling conducted by the CRC Salinity has shown that implementation of Profitable Perennials™ can lift farm profitability by 50% with a 50% decrease in leakage of rainfall to groundwater. More stable production from grazing systems based on native plants better adapted to climatic variability can be achieved. Woolgrowers can improve yields and financial performance 25-30% above historical or district benchmarks, by converting to perennial native pastures, more intense grazing management and woody perennials11. Grain industry: The CRC will directly address a challenging sustainability issue – how crop
farmers can remain viable in the face of ever-declining terms of trade, salinity and other threats and the need for production systems to better adapt to soil and climatic constraints. Productivity of mixed farms has increased more rapidly than for specialist cropping farms in recent years12. This provides opportunity to diversify into more perennial-based farming systems and to optimise financial performance through rotations that use natural resources more efficiently13.
Profitable new industries
Woody biomass industry: The CRC will develop new woody crops able to supply alternative
materials for panel board, charcoal and bio-energy, as well sequester carbon. Some companies recognise the looming shortage of woody biomass from current sources and their participation in feasibility studies and business case development will determine their best opportunities for overcoming them. The global demand for engineered wood products has
10 11
Meat & Livestock Australia 2005, Strategic Plan, Sydney.
Land & Water Australia, Insights: case studies on how woolgrowers are successfully managing native vegetation and biodiversity for profit and sustainability, Land Water and Wool, ISBN 1 920860 68 1, Canberra.
12
Australian Bureau of Agricultural and Resource Economics 2004, Australian Sheep Industry Productivity, Canberra. Ewing M and Flugge F 2004, as above. 7
13
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
grown 7% per annum since 199514. This longer term initiative is higher risk but potentially very high pay-off; scoping studies are already showing strong industry interest. Success will mean new options for sustainability in farming and resource-based industries, economic activity in regions and management of Australia’s natural resource base. Woody biomass grown on wheatbelt farms can be delivered at regional sites at a price highly competitive with conventional sources, if there is a technological breakthrough on harvesting15.
Agribusiness and NRM consulting services: The CRC is aware that of the 4,000 professionals servicing Australian agriculture, about 1,200 are in the private sector. They and professionals employed by CMOs are growing in number16, and represent the new opportunity for FFI CRC’s path to adoption. Every $100 of farm activity draws on $19 of input services17. A Landmark client service manager (CSM) could generate $500,000 revenue over five years from developing and implementing a single farm business plan based on FFI CRC technologies and farming systems. Major revenue would come from the farm planning feefor-service, sales of capital items (e.g. fencing, seed) and consumables (e.g. fertiliser), and commissions on sales and financing, involving five of the six Landmark activity areas18.
Triple bottom line benefits
Better adapted land-use changes: The CRC will develop innovative farming systems and
changes in land uses that are better adapted to salinity, subsoil constraints and climatic variability; do not significantly trade off other important values e.g. water resources; and minimise the weed and genetic pollution risk to biodiversity. FFI CRC plans to develop decision tools capable of predicting these impacts and planning these changes for commercialisation.
Reduced salinity damage: The CRC will prevent future salinity in some areas and significantly
delay its onset in others, through high-water-using farming systems, salt-adapted grazing and cropping systems and integrated management of earth works. There is a growing list of case studies for how this can be done profitably19.
Enhanced biodiversity: By placing perennial systems on the farm, often with native species,
more diversified landscapes will provide additional habitat as well as other ecosystem benefits. The CRC will quantify these to build a more robust approach to developing markets for ecosystem services. There is potential for a much better informed public policy outcome through this approach and application of new decision tools20.
Capacity building: The establishment of a nationally accredited training program for agribusiness and wider client networks, and the provision of industry-ready science professionals to the research community provide an important element in the ‘pathway to adoption’ for FFI CRC products. In the case study undertaken for Landmark as part of the
14
Davidson A and Hanna D 2004, Engineered wood products: prospects for Australia, ABARE e-Report 04.14, Canberra. ENECON 2001, Integrated tree processing of mallee eucalypts, RIRDC publication 01/160, Canberra.
15 16
Roberts K and others 2005, Mapping of rural industries service providers, Publication No. 05/044, Rural Industries R&D Corporation, Canberra. Productivity Commission 2005, as above. Powell J 2006, Case study for Landmark company (unpublished), CRC Salinity, The University of Western Australia, Crawley.
17 18
LandWater and Wool 2004, Case studies on how farmers are successfully managing saltland for profit and sustainability, Land & Water Australia, Canberra.
19
Ridley AM and Pannell DJ 2005, SIF3: an investment framework for managing dryland salinity in Australia, SEA Working paper 1901. CRC for Plant-based Management of Dryland Salinity, The University of Western Australia, Perth.
20
8
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
development of its commercial partnership with the CRC (see above), the CSM would be accredited to Certificate III in NRM to prepare the farm plan for the client on a fee-for-service basis. Postgraduate research project outputs will deliver a significant contribution to the body of knowledge generated by all research programs of the FFI CRC, and to the delivery of innovative new farming systems. More specifically, benefits to farmers from more rapid or more substantial adoption of plantbased systems will include: • New species and varieties of woody perennial plants (shrubs and trees) that can enhance profits when integrated into existing farming systems • New varieties of crop plants that are superior to existing options in particular circumstances. Superiority may arise from perenniality, resulting in cropping systems that are more sustainable, or from salt-tolerance • New pasture options that increase availability of feed for livestock at times when paddock-feed is traditionally relatively scarce, particularly in Mediterranean climates (WA, SA, Vic, southern NSW) • Higher quality of feeds, due to more legumes in the diet, and production of green feed when traditional systems provide mainly dry feed • New species and varieties will combine to allow greater carrying capacity of livestock on farms, generating greater profit to producers from increased income and lower costs • Mitigation of risk in livestock production due to diversification of land uses, and of feed sources, and the ability of perennial pastures to produce feed in conditions that are adverse for annual pastures • Improved quality of wool and higher prices, due to less tender wool caused by low feed availability and quality during summer/autumn • Increased out-of-season meat production and potentially higher sale prices, due to increased lamb weights at slaughter • New designs for integrated farming systems that encompass the above options • Profits to off-farm investors associated with new perennial plant-based industries, through provision of processing, transport, finance and other services.
Contribution of Industrial and Commercial Growth to Economic Growth
The $1.0 billion of commercial and industrial benefits identified above will make a substantial contribution to Australia’s economic growth. Agriculture is highly integrated with the rest of the economy, and so additional growth will also be induced in the manufacturing and service sectors that provide inputs to agriculture. For example, those farm-dependent industries account for 12 % of GDP21. Significant economic growth will be contributed to regional economies, with a substantial impact on local employment. For example, across half of Australia’s 425 statistical labour regions, agriculture accounted for 25% of total employment in 200122. The increased growth will occur in industries which have a high export intensity; based on an estimated 70% export intensity for the affected industries, the CRC will generate exports worth $710 million directly. In addition, the increased productivity will feed into other exporting manufacturing and service industries. This is substantiated by analysis that exports from the manufacturing and service sectors based on value-adding to
21 22
Productivity Commission 2005, as above. Productivity Commission 2005, as above. 9
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
agricultural products almost triples the total value of exports from the whole agricultural sector (based on UN Standard International Trade Classification)23.
Robustness of Estimates - Application principles
Analysis of the proposed CRC was conducted using standard economic methodology, fully consistent with Appendix F of the application guidelines. Sensitivity analyses based on different assumptions about adoption, market prices, technical parameters and discount rates are reported in Selection Criterion 4. Experienced economic consultants conducted the analyses, with oversight by a committee chaired by one of Australia’s leading agricultural economists, and reviewed in detail by an external consultant with high-level expertise in the area. Consequently there is an exceptionally high degree of rigour and sophistication in the final analysis. A detailed explanation of how the principles of Appendix F were followed is in Selection Criterion 4.
Outcomes that the CRC will achieve and the scale (quantity and value) of each outcome.
Outcome
Productivity growth in existing industries: Additional commercial growth in businesses from higher productivity in meat, grain and wool industries. Profitable new regional industries: Commercial growth in on-farm production and regional manufacturing sales and exports of services and technologies. Salinity damage reduced: Mitigation of risk for farm businesses and reduced impacts of dryland salinity on land, biodiversity, water resources and other community values.
Quantity and value
An estimated present value (PV) of benefits of $490 million through adoption of new perennial plant-based farming systems on 7.4 million hectares (mha) of agricultural land. An estimated PV of $160 million from farm production and manufacturing industries, generated from 100,000 ha of farm plantings to woody perennials. An estimated PV of $350 million. It is assumed conservatively that 1.6 mha of agricultural land will have onset of salinity delayed or prevented, which is 25-30% of the likely salt-affected area under a ‘business as usual’ scenario. Unpriced benefits including enhanced habitat values and ecosystem services, protection of off-site biodiversity values and management of weed risk. An estimated $360 million PV attributable to more effective government policy and national/regional investment programs.
Other environmental benefits: Land use changes contributing to ecosystem services including biodiversity and water supply. Capacity building: Better informed public policy and investment of public funds, drawing on the advice and decision tools of the FFI CRC; education and training to build capacity for commercial growth of agribusiness, and to foster the next generation of professionals in CRC participant organisations.
23
Productivity Commission 2005, as above. 10
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Key contributions of the outcomes to specific National Research Priority Goals
National Research Priority Goal
Transforming existing industries (Environmentally Sustainable Australia) Promoting an innovation culture and economy (Frontier Technologies for Building and Transforming Australian Industries) Other priority goals Overcoming soil loss, salinity and acidity Sustainable use of Australia’s biodiversity Water – a critical resource (Environmentally Sustainable Australia)
Contribution
An estimated $1.3 billion net present value in commercial and industrial growth. To achieve this through more profitable farming systems based on perennial plants, including new production from native plants, requires innovation, new investment and risk management. Enterprises in existing agricultural industries will be more intensive and fundamentally different because Profitable Perennials™ will be involved. New companies will enter agriculture and commercial service providers will gain new business opportunities. The proposed research will fully integrate economic drivers for change with sustainability principles and a systems approach. New farming systems and industries will be developed and promoted for adoption where they meet standards for conservation of natural resources, reducing the risk of dryland salinity, and improving conservation of biodiversity and water resources.
11
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Section 2: Commercialisation and Utilisation
“The path to adoption (commercialisation/utilisation) will achieve the identified outcomes.”
The FFI CRC’s end-users are 72,000 SMEs (small to medium enterprises) – broadacre primary producers who manage 60 million hectares of Australia’s landmass. It will seek to increase the adoption of innovative perennial plant-based farming systems on 7.4 mha of agricultural land, establish new regional industries on 100,000 hectares and under conservative estimates delay or prevent salinity impacts on 1.6 mha in the crop-livestock and high rainfall zones (Figure 1). In addition, the CRC will provide decision support tools and technologies for catchment management organisations and regional groups to target and implement land use change at multi-enterprise scale.
Figure 1. Crop-livestock and high rainfall zones to be targeted by FFI CRC
For FFI CRC there are three market sectors for the potential commercialisation and adoption of Profitable Perennials™. First, a large, well established agribusiness sector provides services to mainstream commodity producers including meat, grains and wool, often produced from the same farms. Under a private:public funding model for R&D investment there has been stable, strong and effective industry engagement between farm businesses and the R&D sector. Second, wood-based regional industries are characterised by periods of rapid growth as new companies enter the production and processing chain. Third, institutions for catchment and natural resource management have been established relatively recently under government policies. The FFI CRC will participate across these three market sectors to realise the full commercial potential of perennial-plant based farming systems and new industries.
FFI CRC Business Opportunities
The powerful collaboration of FFI CRC participants, particularly in agribusiness and agricultural innovation, has allowed identification and targeting of three business opportunities in which Profitable Perennials™ will add value to outcomes:
12
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
• deliver innovative farming systems and new perennial cultivars on-farm that boost productivity and mitigate risk • develop enabling technologies and supply-chain enhancements to create new woody cropbased regional industries • provide decision support tools and capacity for catchment-scale NRM to mitigate risk and enhance sustainability of enterprise and catchment level land use changes.
On Farm – Innovative farming systems opportunities
The on-farm, innovative farming systems draw together the considerable expertise of three major R&D corporations, Australia’s largest agribusiness company – Landmark, departments of primary industries in four states, and the Kondinin Group – a national membership-driven farm technology and productivity information company with strong links to regional farmer groups across commodities. This new combination of powerful organisations is an opportunity to bring coordination and resources to delivery programs and end-user engagement to produce maximum adoption rates. We have good understanding of “what works and why” from the research of the Cooperative Venture for Capacity Building (CVCB)24 which has provided FFI CRC with rigorous contemporary perspectives on: service providers, the path to adoption, the necessary capacity to accelerate adoption, and models for successful adoption strategies. An outstanding opportunity at FFI CRC commencement is expansion and commercialisation of EverGraze, the high-profitability/efficient water-using prime lamb perennial plant-based farming system, initially in the high-rainfall zone across southern Australia. EverGraze is highly innovative; it will take livestock productivity to an unprecedented level in broad-acre agriculture and with projected adoption on 1.5 million hectares, will provide major commercial opportunities for the major CRC participants. Across the range of cropping and grazing systems the FFI CRC will produce new perennial plant cultivars that will be adopted on an estimated 5.25 million hectares, adding $15-50/ha to farm profit.
For Regions – New woody crop industries opportunity
The FFI CRC has consulted with companies and government agencies on the best collaborative strategy to build a woody-crop resource base for emerging industry opportunities. This collaboration will involve Enecon (an Australian company developing projects to manufacture products and generate renewable energy from biomass). The Oil Mallee Company – a WA based company building opportunities for on-farm production, from propagation to processing, and NRM, forest products and primary industries agencies from four states. Expressions of interest have been received from processing companies; further negotiations and feasibility analyses will follow establishment of FFI CRC. The Forests Products Commission (WA) adds capability for larger scale woody crop development, with a public investment component.
For Catchments – NRM solutions for catchments opportunity
The FFI CRC has identified commercialisation and risk-management opportunities linked to catchment management that will be applied by CMOs such as the North Central CMA (Vic) and NRM agencies from four states. These opportunities include knowledge, planning/decision tools, education and training to support regional strategies and plans to improve the effectiveness of their advisory, technical and facilitation services in times of change. The demand for these products and services is driven by public policy and regional institution-building in response to threats to water resources, biodiversity and natural resources
24
Coutts J, Roberts K and Frost F 2005, The Role of Extension in Building Capacity – What works, and why, Report by for the CVCB, Publication No. 05/094, Rural Industries R&D Corporation, Canberra 13
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
generally. The initial collaborators will be joined by other CMOs and regional NRM bodies over the life of FFI CRC, following an FFI Associates strategy that draws them in at a time that is best for achieving commercialisation and adoption. The ultimate result of this more effective approach to catchment management will be long term risk mitigation for land use changes involving Profitable Perennials™ and improved public policy for protection of natural resources.
FFI CRC Customers and End-Users
The FFI CRC has created a national network of participants; these participants will be direct customers of FFI CRC products and provide an important link to our target end-users. Through this partnership, FFI CRC will pursue four paths to adoption. Participants represent private companies/SMEs, industry and the public sector that build the unique competitiveness in delivering coordinated research-based innovation in collaboration with farmers:
Private sector
• An agribusiness company wishing to grow its business and have more effective commercial relationships with farmers – Landmark • Timber, manufacturing, resource processing and energy companies needing to diversify and develop new woody biomass resources – Enecon and The Oil Mallee Company at the outset • Participant industry organisations • Industry RDCs, farm productivity groups, and influential farmers seeking innovation and industry growth; through more effective knowledge exchange, communication, education and training, and client participation – MLA, GRDC & AWI • Catchment management organisations and other regional bodies requiring knowledge, planning/decision tools, education and training to support regional strategies and plans to improve the effectiveness of their advisory, technical and facilitation services in times of change – North Central CMA.
Public sector organisations
Departments of primary industries: promoting and facilitating innovation and adoption of new technologies and farming systems; through provision of extension services and knowledge products to industries – DAFWA, SARDI, DPI Vic and NSW DPI. NRM and conservation agencies: directly supporting and guiding catchment and regional strategies and plans through communication of government policy and priorities and provision of technical and information services – DEC WA, DWLBC and DNR.
New knowledge partners
FFI Associates: the CRC engaging with the extensive network of knowledge brokers – from farm production groups, CMOs, regional NRM bodies to leading farmers and influential landholders – the Kondinin Group has a key role here.
FFI CRC Product Development
The collaborative R&D of FFI CRC is focussed on developing products that, through their adoption within and beyond its life, will achieve substantial industrial, commercial and economic growth. Detailed planning and rigorous analysis has identified specific products – farming systems, technologies and tools that through commercialisation and utilisation will create value in the CRC’s three areas of business opportunity. For each product the CRC has identified a market, a performance standard in that market and a target adoption rate that when achieved will contribute to the delivery of the aggregate $1.4 billion total value of
14
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
outcomes. To illustrate Figure 2 maps product development in these markets and Figure 3 itemises the performance standards and adoption rates.
Figure 2. Planned commercialisation of products over the life of the FFI CRC
Figure 3. Performance standards and adoption targets for key FFI CRC products
15
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
FFI CRC’s Path to Adoption
New agricultural innovation networks are providing challenges and opportunities for current and proposed participants in the FFI CRC25. For the R&D corporations (RDCs) there are many farmer-run groups, some quite capable of conducting applied research and many more expecting to be engaged from an early stage. Departments of primary industries have evolved into program-management organisations driven by greater focus on delivering government initiatives and on servicing key industries through projects funded by RDCs. Landmark’s business model is built on the capacity of its staff, and it will look to develop the abilities of its 300 agronomists to provide influential technical advice alongside selling products and commercial services. The FFI CRC is well positioned to engage agricultural and NRM sectors in a new way that addresses these challenges and opportunities. Its strategy for adoption recognises that both farmers and those who service their commercial needs have the capacity to innovate, and that there is diversity within these groupings regarding attitudes to adoption. The CRC’s strategy builds on a network approach to participation, influence and adoption. Patterns of relationships are now purpose-specific; a farmer will have a network of information sources and advisers for cropping systems entirely different to the network used for business management, and neither is constrained by distance. Building on this approach the FFI CRC will have three modes of networking with industry:
Mode
Engage
Description
Industry directly involved through participatory arrangements in FFI CRC research activities
Example of FFI strategy
Engage participants’ networks of farmers and advisers in research (through demonstration sites, advisory groups) including training of Landmark agronomists. Coordinate information provision through multiple networks – FFI Associates (e.g. Evergreen Farmers, Saltland Pastures Association and Oil Mallee Association), ‘shop-front’ industry information brokers (Kondinin Group), and industry information channels (MLA, GRDC, AWI, DPIs). Provide cultivars, decision support tools, and accredited farming system productivity information to end-users through commercial services, Landmark agronomists and CRC partner extension services.
Integrate and Influence
Stakeholders that have potential to promote the work of the CRC and directly influence adoption behaviour in key industry constituencies; positively disposed to innovation, business opportunities and risk. End-users who adopt FFI products directly, and derive profits and additional benefits, which aggregate to FFI CRC outcomes.
Adopt FFI products and services
25
The analysis that follows is drawn from many sources with the most recent being:
Stone G, 2005, Agribusiness Role in Extension, Education and Training: a case study, Report to the CVCB, Publication No. 05/086, Rural Industries R&D Corporation, Canberra. 16
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Commercialisation And Utilisation Strategy
The CRC’s strategy for commercialisation/utilisation builds on this understanding of networks in the three areas of business opportunities, recognising each has inherently different but intersecting networks. Shared in common, though, are primary producers as end-users. FFI CRC’s strategy for maximising adoption is built on maximum industry engagement. It is no longer effective or acceptable to conduct R&D largely by researchers, then hand over the knowledge, products and services to agency-based or private extension providers to be delivered to the farm gate.26 The role of FFI CRC will be a ‘wholesaler’ of products rather than a ‘retailer’. To achieve its adoption targets through commercialisation it will pursue opportunities through three strategies for adoption – commercialisation for private sector delivery, a platform for effective delivery via partner industry organisations, and new knowledge partners.
Commercialisation for private-sector delivery – agribusiness
Commercial delivery of agricultural innovation is becoming a major pathway for adoption of new farming technologies and systems. The FFI CRC will develop research outputs to be licensed for private-sector commercialisation, particularly through FFI’s relationship with Landmark as a core participant. In addition, there will be commercialisation of new products and services for innovative farming systems through direct engagement of companies in agribusiness, natural resource consulting and possible overseas development (particularly in saline land management). Landmark is Australia’s largest agribusiness company employing about half of the field-based agribusiness agents who together reach almost all farmers. It offers a range of commercial services (e.g. technical advice, farm input and product sales, financing and insurance) that together will support increased rates of adoption of profitable farming systems. Landmark will convert knowledge generated by the CRC into saleable products that improve the profitability of their farmer clients and the company itself. Pre-commercial development of new cultivars and species is an opportunity for Australia’s pasture seed industry, which itself comprises a large number of SMEs. As cultivars approach commercialisation the FFI CRC will select participating companies by tender; typically, they will co-invest in the breeding phase and pay about 10% royalties. This is proven practice for this industry and offers the most effective path to adoption.
Commercialisation for private sector delivery – wood products
Commercialisation of farming systems for wood products requires individual companies investing directly in projects. These projects will develop farm products and production systems that can supply a new woody biomass resource for manufacturing, metallurgy, and bio-energy processing or carbon sequestration. In this emerging industry, companies will be expected to contribute their own technologies as background IP to specific CRC projects, and FFI CRC (in association with grower groups) will evaluate prospects for farm-grown products (quality, supply and cost) and create investment opportunities in production systems and logistics of supply. Enecon has state of the art processing technology developed by CSIRO and licensed for use world-wide. Related company Renewable Oil Corporation Pty Ltd (ROC) is the exclusive licensee for commercial wood pyrolysis technology from Dynamotive in Canada and is actively pursuing commercial pyrolysis projects in Australia. The Oil Mallee Company will collaborate in the development of a biomass harvester, a project critical to reducing value
Andrew J and others, Fostering Involvement – how to improve participation in learning, Report to the CVCB, Publication No. 05/105, Rural Industries R&D Corporation, Canberra.
26
17
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
chain costs, and has agreed to place its existing harvester IP with FFI CRC. Enecon, The Oil Mallee Company and ROC offer a development capability to FFI CRC that will draw in other company interests provided initial feasibility assessment confirms a viable opportunity. For woody biomass to be commercially viable new harvest and handling technology will be required. FFI CRC will broker and concentrate the interests of participants in this development.
Commercialisation for private sector delivery – natural resource management
NRM, driven to a significant extent by public policy, is an emerging opportunity for private sector servicing. Many SME-scale consultants operate in this field, without the capacity to invest and participate in collaborative R&D. However, they are vitally interested in the knowledge generated and in contributing to more effective policy and programs, and are potential FFI CRC Associates (this initiative is discussed more fully below).
Platform for effective delivery via partner industry organisations
Industry RDCs and agricultural extension services are influential in adoption of agricultural innovation. FFI CRC will provide an essential platform for farming systems integration. They have allocated resources to the CRC for its delivery through their paths to adoption. There will also be opportunity to improve paths to adoption through social and economic research, program evaluation, technology and process development, and adaptive management. Specifically the FFI CRC will develop an Adoptability Index, drawing together this research capacity, as a benchmark for adoption of new technologies and systems. Its application will enable MLA, AWI and GRDC to access knowledge, technologies and systems that are already adapted to market conditions to strengthen their programs in demonstration of new technologies and in influencing landholders generally to adopt new farming systems.
New knowledge partners – FFI Associates
The CRC will engage with the extensive network of knowledge brokers – from CMOs, regional NRM bodies, farmer groups and leading farmers – as FFI Associates. Through this network the CRC will access a highly influential groups, who can access further training opportunities, and are experienced with new information technology and familiar with commercial services. This network will provide access to a new generation seeking engagement through direct investment and participation in research, commercialisation and utilisation activities, and likely to adopt earlier. For example, the North Central Catchment Management Authority (Victoria) and the South Coast Regional Initiative Planning Team (Western Australia) have joined the CRC Salinity to develop new decision investment tools for catchment management, and this will carry over to FFI CRC. Organisations that have already expressed their interest in becoming FFI Associates include the Saltland Pastures Association, Evergreen Farmers and the Oil Mallee Association. The Kondinin Group will take on a special role here, drawing on feedback from its 8,500 members to guide and evaluate this evolving participation in the CRC.
Commercialisation Management
Commercialisation & Utilisation Risk Mitigation
There will be a risk management strategy for each area of business opportunity. The market for Innovative farming systems opportunities – on-farm comprises long standing industry players, multiple networks and competition among many companies in particular market segments. Each RDC has its own constituency and credibility profile, yet together they share clients presenting multiple paths to adoption of farming systems. The Kondinin Group prides itself in being perceived as independent of industry influences and knowing
18
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
what its customers want from annual surveys. Risk is spread through the CRC working with all these players and paths as networks. On the other hand a tender process is best suited to risk mitigation for commercialising on-farm technologies such as seed production and sales, because of the many competitors in that market. By way of contrast New woody crop industries – for regions face new market opportunities, with the business goals of private sector players ranging from venture capital raising and managed investment schemes to long term returns on established capital. To mitigate risk in this area the FFI CRC will engage with strategic partners – Enecon, The Oil Mallee Company and ROC, which have a strong foundation of technologies and expertise in harvesting and bio-energy processing, and a shared goal in facilitating sound commercial partnerships for developing new regional industries. We have structured this relationship flexibly so that links with a range of other companies can be developed as further opportunities are assessed as viable. The market for NRM solutions for catchments is likewise emerging but based more on national policy and public funds investment. Here the FFI CRC plans to build on the strong track record of the CRC Salinity in providing soundly based scientific knowledge for more effective policy in NRM, and developing decision tools to vastly improve net benefits from regional delivery of policy and investment. Risk will be mitigated by continuing to provide independent advice based on rigorous scientific and economic analysis.
Intellectual Property Management
FFI CRC management of IP will be undertaken to ensure a sound basis for commercialisation and utilisation of FFI CRC products. Achievement of the scale of FFI CRC outcomes demands robust assessment of opportunities and maximisation of adoption rates. The two IP management strategies for FFI CRC strategies will be: • Working with private agribusiness companies to develop trademarked, copyrighted or patented technologies and packages that will be licensed for commercialisation. Depending on co-investment arrangements, royalties may be part of this strategy. • Working with public sector agencies to gain rapid adoption of innovative farming and NRM systems to improve competitiveness of major Australian export industries. Establishment of freedom to operate is an essential part of an IP management strategy for any research group. Our assessment based on extensive experience and detailed planning shows that freedom to operate is unlikely to be a major issue for the planned areas of research. Careful IP management procedures will be instituted to ensure that valuable IP can be identified and protected. These strategies will be used to ensure effective commercialisation or utilisation so that new knowledge and technologies can be delivered, unencumbered, to customers. Effective IP management will also allow capture of any opportunity to earn income that will be returned for further R&D where appropriate. In the FFI CRC’s target market, commercialisation and utilisation (or path to adoption) strategies cannot be separated. Developers and adopters of innovation will unite in industry networks where CRC products will range from new farming systems to cultivars and other technologies, and decision support tools. This is a more complex and less linear arrangement than delivery of technological innovation in a conventional wholesale to retail market situation. The Commercialisation and Utilisation Program will respond to the different needs of end-users as identified in the path to adoption for each business opportunity area. Consequently, the program will ensure that the FFI CRC implements appropriate policies, standards and processes to maintain commercial competitiveness and stakeholder confidence. It will:
19
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
• Establish commercialisation planning and development activities across all industry programs – using agreed Commercialisation and Utilisation Plan • Develop the relevant skills base of CRC researchers and provide the management support and technical resources to ensure effective commercialisation of CRC research • Identify and support specific product initiatives within CRC programs to meet commercialisation objectives, and monitor activities across all programs • Monitor and support industry and end-user engagement across all programs, providing market and industry intelligence for business development activities • Identify and recruit new participants to the CRC, at program and/or project level to meet new commercial opportunities.
Leadership of FFI CRC Commercialisation and Utilisation
Commercialisation and utilisation within the FFI CRC will be led by a general manager commercialisation and utilisation, supported by a commercialisation manager and a consultancy-based resource of commercialisation and utilisation professionals from key industry and private sector participants. The General Manager will manage twin objectives: to work across the CRC as well managing specific commercial outputs. Accountable to the CEO, the General Manager will: • Create a commercially-focused research environment throughout FFI CRC to deliver valuable commercial innovations to appropriate participants, commercialisation partners and end-users • Coordinate and support development FFI CRC products, providing professional support for product development and adoption activities across key industry programs • Lead the marketing arm of FFI CRC to develop and manage the respected Profitable Perennials™ brand. The General Manager will have sufficient resources to direct emerging commercial opportunities and will be a member of the senior executive of the CRC. This recognises the strategic importance of commercialisation and utilisation within the CRC and ensures that the FFI CRC is structured to meet its commercial objectives. The General Manager will fund specific activities within each R&D program and provide general support and guidance of commercialisation activities across all CRC Programs. This will ensure that that all CRC research and development activity is managed from the outset with a commercial focus and engages key participants in each sector.
Users and Program Structure
The Commercialisation and Utilisation Program will be an integrating activity that will identify and develop the commercialisation strategies of all the FFI CRC’s programs to ensure the closest connection between end users, FFI CRC participants and researchers. It will establish the business and product culture and support all programs with skills, mechanisms and expertise.
20
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Commercialisation and Utilisation Program fostering commercialisation/utilisation
Innovative farming systems ON FARM P1: Future Livestock Production P2: Future Cropping Systems P4: Farming Saline Landscapes P6: Economic, Social and Policy Analysis – research and modelling for commercialisation/ultilisation P7:Education and Training – capacity building for commercialisation / utilisation The Program will also have dedicated professional staff resources to take on specific productfocused initiatives where best managed within the program. Examples include final stages of cultivar release, or managing training and delivery of version-controlled decision support software. In either case, the goal of rapid end-user adoption will drive the choice of the best commercialisation support. Building on the successful strategy of the CRC Salinity, the FFI CRC will engage industry closely in developing research projects and ensure that commercialisation and utilisation objectives are embedded in design and planned outputs. Managers and commercialisation professionals will engage end-users and parties that influence the adoption of the CRC’s research outputs. Research providers will be supported by commercialisation professionals from within their agencies (coordinated through project-level contributions to the Commercialisation and Utilisation Program). The primary focus for research providers (universities) and industry investors (e.g. MLA) is on widespread adoption and industry growth, rather than specific proprietary returns to the CRC or its participants. Commercial drivers – e.g. from companies to secure seed rights – may be satisfied by one-on-one commercial agreements that recognise FFI CRC IP rights and commercial motives of the seed company. There is an important relationship between Program 7 (Education and Training) and the CRCwide objectives of the commercialisation and utilisation program. Program 7 builds the generic capacity to deliver FFI products through our participants and clients. Extension practitioners and private sector consultants in CRC participants will be involved in research projects from an early stage, coordinated by the General Manager. Any training they need will be led and coordinated by Program 7. John Powell is currently National Extension Leader in the CRC Salinity and has a built a successful consultancy business (Optimal ICM) in the areas of adoption of agricultural and NRM innovations. New woody crop industries FOR REGIONS P3: New Woody Crop Industries Natural Resource Management solutions FOR CATCHMENTS P4: Farming Saline Landscapes P5: Biodiversity and Water
21
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Program Leader
Time Commitment
John Powell – A/General Manager Commercialisation and Utilisation
Key personnel
0.5 FTE interim, then 1.0FTE
Bruce Cairns – National Agronomy Manager, Landmark Dr William Ryan – CEO, Kondinin Group
Private Sector Participants And Their Role In Commercialisation/Utilisation
End-user Role in Participant commercialisation/utilisation
Meat & Livestock Australia Cooperation in path to adoption activities, including producer networks, training and communication activities Cooperation in path to adoption activities, including producer networks, training and communication activities
Core or SME (S) or Supporting International (I)
Core S
Australian Wool Innovation Ltd
Core
S
Grains R&D Corporation
Cooperation in path to adoption activities, including producer networks, training and communication activities Liaison with GMC&U, consultancy day resources of national agronomy team Liaison with GMC&U, industry training and communication expertise Liaison with GMC&U, wood processing technologies expertise
Core
S
Landmark
Core
I
Kondinin Group
Supporting
S
Enecon and ROC
Supporting
S
Oil Mallee Company
Liaison with GMC&U, woody crop Supporting production expertise and harvester IP
S
22
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Section 3: Research and Development, Education and Training
“The collaboration has the capability to achieve the intended results.”
FFI CRC brings together key industry and research capacity to create and deliver a new generation of opportunities based on the wider use of perennial plants – Profitable Perennials™.
Strengths of the FFI CRC collaboration
The primary strength of the FFI CRC proposal is the comprehensive partnership of participants with capabilities covering the full spectrum of activities along a chain linking all aspects of its research through to commercialisation and adoption. The impact of new perennial plant systems depends on rapid and comprehensive adoption. The partnership includes key private and public sector participants with adoption focus. Landmark has the largest network of private agronomists in the country and the FFI CRC provides capacity to link their efforts with four participating State primary industry agencies. The adoption capacity is further strengthened by the participation of the RDCs, with their industry level focus on grains, livestock and wood. The Kondinin Group delivers a sophisticated communication network that will provide accelerated awareness of new perennial plant opportunities. The research task is complex and requires assembly of a wide array of skills and capabilities. FFI CRC will build on CRC Salinity’s effective management of multi disciplinary research. The independent review confirmed its stimulation of researchers to embrace their roles in multi disciplinary teams and to integrate their research; and its impressive governance arrangements for their coordination and supervision. Farmers and the wider industry have already been influential in the priority setting and planning of the research agenda of the bid and they will have further input into implementation. FFI CRC will draw on, coordinate and focus relevant partner contribution in areas of: • Analysis and knowledge of industry trends (RDCs, State agencies) • Detailed knowledge of producer interests and priorities (Landmark, Kondinin Group, State agencies) • Participation of farmers in research priority setting (RDC networks) • Direct participation by producers in research (State agencies, CSIRO) • Formal and informal review and feedback on research relevance and progress by farmers and groups (RDC networks, Landmark agronomists) • Clear pathway to product testing and adoption (established RDC and industry networks of growers). The RDCs provide a critical understanding and access to their industry stakeholders, networks and individual producers. This is supported by informal networks and communication channels associated with partners with dispersed networks of staff. Landmark and the State agencies are the key partners with this capability.
23
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Research collaboration and integration
The large number of participants in FFI CRC has been drawn together by their conviction that Profitable Perennials™ offers a pathway to enhancing profitability of dryland farming while improving the natural resource base. The number of partners and their scale of commitment match the scale and complexity of the research and delivery challenge ahead. Meeting this challenge requires a high degree of collaboration and coordination, an important component of the role of FFI CRC. The planned integrated and focused research and delivery process will be achieved by drawing on the pool of expertise and infrastructure within the participants into multi-disciplinary and multi-organisational project teams. Project activities will be embedded in programs linked to key agricultural industries (livestock, crop etc) ensuring continuity of effort from initiation of the research idea to adoption of products in the hands by end users. FFI CRC acknowledges, through its partner engagement, the changes taking place in ‘near to market’ aspects of agricultural innovation and particularly the expanding importance of agribusiness and other private sector interests in delivering profitable new systems. It also recognises the growing importance of regions (CMOs) in the near to market delivery of NRM outcomes. Their integration into projects will enhance collaboration and delivery of outcomes.
Managing technical and research risk
Rigorous research planning and management is a strength of CRC Salinity which will be built on in FFI CRC. Key elements of the process involve: • Wide and continuous consultation with stakeholders • Active and formal strategic planning supported by industry analysis • Development of a research portfolio with a framework for explicit attention to balancing research risks • Rigorous project development involving: teams with emphasis on leadership, skills acquisition and balance (multi-disciplinary and multi-institutional) Industry engagement and involvement in planning Formal project development and documentation (emphasis on pre-experimental phase) Pre-approval review with emphasis on alignment to the committed outcomes, research feasibility and impact Board level oversight and formal project approval
• Regular review (internal and external) of operations, monitoring of progress and outputs (including provision for adaptation to deal with unanticipated outcomes and changing circumstances) • Formal analysis of impact of outputs and outcomes. A useful project development tool of in CRC Salinity has involved pre-experimental impact analysis (profit potential, scale of impact and environmental costs and benefits) in the form of a small pre-experimental project.
National collaboration and coordination
FFI CRC will provide efficient national coordination, following on from experience in CRC Salinity. Research investors such as the GRDC, MLA and AWI have used this capability to invest in circumstances where CRC Salinity has delivered national project management and co-ordination. Examples include Sustainable Grazing of Saline Lands and EverGraze, both of which are expected to continue in some form in FFI CRC. Many research initiatives planned for FFI CRC have relevance to most of southern Australia. However, some will have particular
24
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
local specificity, generally based on climatic differences. Regional initiatives will generally involve fewer partners, selected for regional relevance. The substantial CSIRO involvement contributes strongly to national collaboration because of its decentralised structure and institutional commitment to key national objectives.
Capability of participants in the collaboration
Perennial plants have a complex mix of forms and uses, with potential to utilise crops, pastures (herbs and shrubs) as well as trees. A particular focus will be on enhanced performance in saline parts of the landscape. While profitability will drive the uptake of new perennial systems, important opportunities and challenges can optimise associated NRM outcomes. Faced with this complexity, FFI CRC has the opportunity to draw on the special skills and capabilities of its partners to produce a focused initiative that creates valuable new products and farming systems. The research planning process has involved detailed exchanges with partners to identify key scientists with the skills and leadership credentials to match areas of proposed activity and deliver the identified outcomes. This talented and experienced group has formed program teams, based on skills and interests. Multi-disciplinary and multi-institutional teams have been identified with the capability to deliver on the identified outcomes and now form the basis of the in-kind contributions being offered by partners (see SC4). The key individual scientists are identified on a program by program basis and their CVs included as support documents. The program development team has been coordinated by Dr Mike Ewing who is internationally recognised for his expertise in pasture breeding and farming systems innovation. Appointed acting program leaders have a proven track record in CRC Salinity. Drs Dave Masters, Anna Ridley and Professor David Pannell are all national leaders in their fields. Mr John Bartle is widely recognised nationally for his expertise in innovative forestry initiatives while Mr Ken Wallace provides strong leadership in catchment level management through his expertise in biodiversity and water management. Dr Richard George combines expertise as a hydrologist with an unmatched understanding in Australia of saline land management. Mr Scott Glyde is new to the management group and will lead the education and training initiatives. The wide skills, interests and networking of this team individually and as a group provides the basis for cohesive management. All members of this group have substantial time allocated to the CRC (50-100%) which will allow them to deliver the leadership and management of programs.
Plant innovation (herbaceous pasture and crops and new wood sources and industrial uses)
FFI CRC has world class intellectual and physical infrastructure covering all relevant aspects of plant breeding. Partners SARDI and DAFWA provide world leading genetic resource centres including relevant collections of herbaceous perennial plants (native and exotic in origin) and DEC has similarly collected and preserved Australian native woody perennials. In addition, DAFWA and CSIRO have the cereal-breeding capabilities to produce cultivars of novel cereals (salinity-tolerant combined with waterlogging-tolerant and perennials). FFI CRC partners have a track record of establishing powerful international linkages that deliver freedom to operate with exotic germplasm, access to advanced breeding material which shortens the path to cultivar release, and breeding methodologies and techniques that improve the rate and extent of genetic progress. New cultivars of a diverse array of perennial plants will be produced, building on research in CRC Salinity (including species of the genus Lotus, Melilotus, Medicago, Cichorium, Panicum, Fescue, Dactylis, Eucalytus, Acacia and Atriplex). Breeding efforts will be supported by studies in plant physiology by UWA and CSIRO. While breeding efforts will be linked to existing infrastructure and skills, new plants will be field-tested in target environments by regionally dispersed staff of the four State agriculture agencies.
25
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
New perennial plants need to be embedded in farming systems and, in the case of woody perennials also, into emerging industries. A key capability in farming systems research is the need to deliver reliable general conclusions from relatively few sites where technologies are tested and demonstrated. The use of models is fundamental to such work. CSIRO is a vital source of expertise in modelling pasture, crop and tree growth. Along with DPI Vic, CSIRO is the source of expertise in water use and catchment modelling which is vital to predicting the NRM consequences and impact of new perennial-based farming systems. Understanding and predicting the economic consequences of such systems is central to the capabilities of FFI. Participants in this area are UWA, DAFWA and NSW DPI. DPI Vic has a well established record in social investigations linked to changing agricultural land use and these skills will be available to FFI.
Animal innovation
Livestock research is a central plank of proposed farming systems and strong partner input from MLA (meat) and AWI (wool) provided direct input to these efforts as well as linking related research efforts. The four State agriculture agency partners as well as the CSU, UWA and CSIRO will deliver skills such as animal nutrition, animal reproduction and behaviour. In addition, they have special skills in livestock grazing management. Optimum utilisation strategies of new forages (herbaceous perennial, saltland species and shrubs) will often require detailed specification resulting from studies of the interaction between livestock and the feed source.
Saltland farming systems
Specific focus will be on developing profitable ways of using saltland including identifying the appropriate mix of engineering and plant based approaches. State agencies in WA and SA deliver strong capabilities in the management of saline land, a response to the high incidence of salinity. Animal production systems offer the best opportunity to profitably manage saline land in the short term, in which CSIRO and CSU have world class scientific capabilities. In the Murray-Darling Basin salinity centres most on water quality and NSW DPI, DPI Vic and CSIRO provide strong capability in analysis and problem solving here.
Natural resource management
This objective is strongly supported by the engagement of state agencies with responsibility for NRM as well as important research capacity from CSIRO Sustainable Ecosystems. In addition, UWA in partnership with DPI Vic in particular, delivers extensive capabilities relevant to policy development that has potential to greatly enhance policy impacts. These initiatives will be greatly enhanced by the involvement of North Central Catchment Management Authority (CMA), a supporting participant, and other CMOs.
Private and public sector adoption
FFI CRC has recognised the potential offered by public/private partnerships in technology transfer and will further develop the relationship with Landmark pioneered in CRC Salinity. It will extend its partnerships to include the Kondinin Group which has strong experience in rural industry communication and information flow. These key capabilities offered by private sector partnerships are central to the scale of potential influence and the opportunity for rapid two-way communication with the pipeline connecting research to adoption. The effectiveness of extension activities will depend heavily on training capability, which is a clear strength of NSW DPI with complementary capacity in other state partner agencies. The RDC partners (AWI, MLA and GRDC) have key interest and expertise in paths to adoption and have established producers networks and publications in which research highlights can be featured and training initiatives into which emerging knowledge can be incorporated.
26
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
In addition to marketing the CRC products, agribusiness can make an important contribution to the R&D phase. Through their wider industry contacts they are often able to provide input concerning the direction or nature of research. Enecon is a participant with interests in bioenergy. It is constantly scanning the national and international landscape for alternative energy opportunities. Their collaboration will deliver intelligence on the best opportunities for new woody perennial crops and these insights are likely to strongly influence R&D directions, such as breeding for woody crops. Landmark has a network of agronomists in constant contact with its regionally dispersed client bases. They have a finely tuned awareness of market conditions and dynamics (competing technologies, changes in input prices and returns, trends in attitudes to risk), all relevant to decisions on R&D priorities and directions.
Capacity building and training including postgraduates
The four participant universities have strong track records in postgraduate training and in all cases there is commitment to provide industry co-supervisors for CRC-supported students. UWA offers specialised expertise in farm level and environmental economics as well as a range of plant-based sciences and animal production. Adelaide is strongly represented in soil science and spatial analysis while CSU has key research participation in animal production and rural sociology. Melbourne brings expertise in crop and pasture systems (production and economics), plant genomics and development, weed risk analysis and woody plant systems.
Benefits of collaboration after Commonwealth funding ceases
Major collaborative effort will build a new platform for agricultural innovation based around wider exploitation of perennial plants. The participants in FFI CRC will be able to further build and refine elements of this platform beyond the CRC because of their participation. FFI CRC will build their research capability so that benefits continue to flow for 20 to 30 years (modelled from the platform) and further improvements and refinements. Long-term benefits will also take the form of new approaches to agricultural research and adoption. Two key elements being pioneered and likely to continue are: the integration of production and natural resource initiatives in the delivery of benefits from agricultural land; and the closer linkages being forged between public research providers and agribusiness.
Commercial release of outputs
Rapid and extensive uptake of complex new technologies requires a number of elements. The most important is the appropriateness of the technology in meeting needs of potential users. The industry connection to partners substantially reduces the risk of unfocussed R&D efforts. Their strong regional representation allows for technologies to be adapted for the specific demands of regional. Profitability of new technologies is a key element in user judgement of appropriateness of technologies. The consortium has strong capabilities to predict the potential for profit advantage of its R&D and to demonstrate these advantages to rural businesses once they become established technologies. Rapid access to new knowledge and products is central to commercial uptake. The private public partnership has been designed to enhance this flow. Products such as cultivars will move rapidly into the hands of commercial distributors and marketer but will be supported by information and training capacity originating in the public sector.
27
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Research and Development Strategy Programmes
Key challenges
Simply put, the challenge facing the FFI CRC is to develop Profitable Perennial™ technologies (plants and systems) that will demand to be rapidly adopted, driven by their profit advantage compared with existing options. Associated with this adoption will be benefits to the natural resource base, and the challenge is to design the new systems in ways which maximise these benefits. The full complexity of this challenge arises because of the need for: • Multiple perennial technologies to meet the wide array of circumstances within and between farms (variation in climate, soils, current technologies, competing new technologies, social circumstances and context etc) • Limits to perennial adaptation and application (perennial plant species, forms etc vary widely in their adaptation and therefore their patterns of potential use) • Timeliness of response (developing and comprehensively testing the plants and systems rapidly enough to meet end user and investor expectations while dealing with long running systems) • System complexity (manage the conflicts between profit advantages from input intensification and technical and financial risk associated with more complex systems) • Systems integration (need to evaluate new perennial technology as components of wider systems) • Profit and natural resource trade-offs (best profit opportunities for perennials might not match) • Adoption drivers (large profit advantages will result in rapid adoption but for smaller advantages the rate and extent of adoption will depend on information flow to potential users). Recognition of these challenges has been fundamental to the strategy for FFI CRC and its structure that involves: • Focus of efforts based on commercial impact potential (concentrate research efforts on those opportunities identified as having greatest benefits if successful with strong emphasis large per hectare profit advantages and large potential scale of application) analysis of best opportunities to link profit and natural resource advantages with emphasis on water and biodiversity enhancement clearly defined products to be delivered by the research. recognise that new plants generally need new systems requiring integration of plant improvement and system development new perennial systems are embedded in wider bio-physical and economic landscapes based on our capacity to understand and model the complexity to generate general understanding from our research. short term opportunities will generally be adaptation of systems or opportunities created by CRC Salinity highly innovative initiatives with substantial profit benefits but which have longer delivery lead time and risks profit and industry-driven initiatives integrated with NRM initiatives that influence system design.
-
• Embrace system complexity
• Balance research portfolio -
28
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
• Emphasise delivery establish relevance by early stage engagement with stakeholders and end users identify the products that will be the focus for commercial partner engagement recognise that rate and extent of adoption will depend on information flow from public and private extension.
Research Program Structure
The structure of the research program is focused to produce industry relevant outputs that will change the nature of farming, create new industries and inform the management of catchments. • Three programs focus on key elements of the farm enterprise Future Livestock Production Future Cropping Systems Farming Saline Landscapes New Woody Crop Systems Biodiversity and Water Farming Saline Landscapes Economic, Social and Policy Analysis.
• One program will deliver a farm enterprise base for new industries • Three programs concentrate on enterprise risk mitigation through management of catchments
All will be supported by an Education and Training program and a Commercialisation and Utilisation program. The strong emphasis on industry linked programs is designed to support the development of industry-ready products. Potential cross-program linkages and linkages between Profitable Perennials and their NRM implications will be captured and integrated at the project level. The importance of economic drivers will result in participation of researchers with economic analysis skills being embedded in most projects.
National and International linkages:
FFI CRC is national in scope (southern, temperate Australia) and will have an international profile in its focused arena of interest. National initiatives will involve workshops on subjects of main scientific interest (at least one a year) and FFI CRC organised conferences every second year. This activity will be supported by strong communications initiatives, featuring a quarterly newsletter (based on ‘Focus on Salt’ with its circulation of 6,000) detailing scientific activity and progress within the CRC. In addition, it will generally support its partners in maintaining good scientific communication and networking. International linkages will be both formal project partnerships and less formal collaborations. FFI CRC will build on existing close relationships with: • INIA Uruguay – collaboration in breeding key L. corniculatus • Swedish Institute of Agriculture – salt tolerant grasses • N.I. Vavilov Institute of Plant Industries, Russia – perennial plant genetic resources • Land Institute, USA – breeding perennial cereals • University of Sussex, UK – salt tolerant breeding • University of Alicante Spain – perennial legume development
29
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
• Washington State University – breeding perennial cereals • Experimental Institute for Forage Crops, Lodi, Italy – perennial legumes and grass improvement. In addition FFI CRC will: • Support international travel to and from Australia for workshops and conferences of relevance. A specific initiative will be support for the 2nd International Salinity Forum to be held in Australia in 2008 • Financially support students as part of the Education and Training program, to undertake parts of their postgraduate training overseas where valuable • Direct publication of research results to international journals, given the advantages that this delivers in enhanced two way flow of information relevant to FFI CRC research initiatives.
Research and Development Programs
Future Livestock Production (Program 1)
The viability of livestock production in Australia depends on ability to maintain or enhance profitability, under pressure from negative terms of trade. There are subsidiary challenges associated with maintaining the health of the natural resource base, dealing with market demand for ‘green’ production systems and the realities of a variable and changing climate. The extent and complexity of this challenge demands that, in looking for solutions, we explore beyond incremental change, to technologies that offer substantial potential for profit improvement. New systems based around Profitable Perennials™ offer the potential for such a shift. The innovative approach offered by the Future Livestock Production Program (FLPP) is to identify and develop new perennial plants that can be managed to create a new feed availability profile at the paddock and farm level. This feed base can then be analysed and managed to create opportunities for more intensive livestock production systems. CRC Salinity has pioneered this approach with EverGraze (More livestock from perennial$) whose objectives are set to produce a 50% increase in farm profit and 50% reduced leakage to groundwater. FLPP will expand application of this approach to other environments and production systems, for instance use of new shrub systems in mixed farming in ‘Enrich’. Stretch targets will be set in all cases (generally in the range 30-50%) to link research activity to major system innovation delivering both profit and NRM dividends. In addition Enrich will identify and exploit natural chemicals from perennial plants to reduce inputs of animal medications and treatments as a practical way to deliver ‘green’ production systems.
Research Products
1.1 EverGraze Plus – More livestock from perennial$ and More livestock from native perennial$ grasses in the high rainfall zone (>500 mm) 1.2 1.3 Forage cultivars (chicory, lotus or perennial Medicago) – from PastureSearch New acid tolerant perennial forage cultivars – from PastureSearch
1.4 A new herbaceous forage for the warm season, summer dominant or high rainfall zone with a commercially released management and utilisation package - from PastureSearch with application in EverGraze 1.5 Enrich – new shrub-based livestock production system for landscape and natural resource health in the low/medium rainfall zone 1.6 New shrub cultivar (Atriplex) – from Florasearch.
30
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Central to the approach being applied by FLPP is the ability to have focused but integrated project teams with skills covering aspects including pasture breeding, agronomy, livestock production, NRM (mainly related to hydrology) and bio-physical and economic modelling. FLPP has a team with an established track record of innovation and collaboration. They provide the opportunity for drive substantial industry change through their combined efforts.
Program Leader Time Commitment (as Full Time Equivalent – for each year)
Dr David Masters
Key Researchers
0.7
Time Commitment (as Full Time Equivalent – for each year)
Dr Dean Revell Dr Brian Dear Ms Angela Avery Dr Andrew Thompson Mr Paul Sanford Dr Greg Lodge Dr Phillip Vercoe
Private Sector Participants
0.4 0.6 0.6 0.5 0.7 0.5 0.2
Australian Wool Innovation, Meat and Livestock Australia and Landmark
Future Cropping Systems (Program 2)
The challenge facing Future Cropping Systems (FCSP) is to introduce a profitable perennial component into existing annual plant-based production systems, while delivering a substantial profit and natural resource enhancement dividend. Most of Australia’s crops are grown on farms that mix crop and livestock enterprises. The area devoted to such system is approximately 35mha with less than half this area cropped annually. Lucerne, the most widely used perennial in the cropping zone is grown on less than 3 m hectares, providing wide scope for substantially increased use of perennial pastures when appropriate plants and systems are identified. The environmental diversity of situations across Australia in areas where mixed crop/pasture based livestock systems are practical (low and high rainfall Mediterranean and warm seasonal wet/dry) drives the need for multiple perennial based systems, each with their associated drivers and constraints. Profit will be the primary driver of change, both in the short and longer term. The program will use bio-economic modelling of integrated crop-based systems to focus its investment targets and then to demonstrate the profit advantages of the new systems as they emerge. FCSP will have a balance of short (system modification and adaptation) and longer term (system innovation and creation) outputs and products from its activities. It will focus on increasing the extent and performance of perennials in the non-crop element of the mixed farm systems with profit coming from increases in both crop and livestock performance. FCSP will also scope the potential of a highly innovative option – development of a perennial cereal crop. Activities will include: • New systems incorporating perennials that have more productivity and salinity and/or hydrological benefits, tested through participatory research • System development and enhancement with perennials focusing on situations where these perennials are commercially available or near to market • Salt and water-logging tolerant wheat, perennial wheat, drought/grazing tolerant forage legumes.
31
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Research Products
2.1 2.2
EverCrop – new farming system in each of 3 agro-climatic zones Drought tolerant forage legume cultivar – from PastureSearch
2.3 EverCrop Decide – new crop systems analysis tools that integrate production and conservation objectives 2.4 2.5 2.6 2.7 Feed grain quality salt/waterlogging-tolerant wheat Salt/waterlogging-tolerant wheat suitable for biofuel Breeding material for bread quality salt/waterlogging-tolerant wheat Prospectus for development of perennial wheat
The FCSP team has capacity to identify gaps in current farming practice and the imagination and systems analysis skills to overcome them with superior farming systems built on innovative technologies. This work, reviewed to be of international standard, will be done in partnership with the well organised industry networks and farmer groups. The main NRM driver in this program is dryland salinity, but we are mindful that its relevance, on- and off-site impacts and urgency, varies in different regions. We will encompass other water-related environmental issues where relevant, with multiple natural resource benefits unified through minimising the negative hydrological footprint.
Program Leader Time Commitment (as Full Time Equivalent – for each year)
Dr Anna Ridley
Key Researchers
0.6
Time Commitment (as Full Time Equivalent – for each year)
Dr Michael Robertson Dr Michael Francki Dr Phillip Larkin Dr Tim Colmer
Private Sector Participants
0.5 0.3 0.3 0.4
Grains Research and Development Corporation, Meat and Livestock Australia and Landmark
New Woody Crop Industries (Program 3)
The CRC Salinity focused on screening prospective native woody species for crop and product potential. A short list of promising species and products suitable for wheatbelt conditions has been generated. Commercial interest in woody biomass resources has increased strongly, coinciding with major changes in global markets favourable to large volume woody biomass production and utilisation, e.g. climate change, CO2 emissions control and escalating energy costs. The challenge facing the New Woody Crop Industries Program (NWCIP) is to overcome impediments to commercial performance of biomass supply with a cost structure to meet anticipated increased demand. We aim to develop woody perennials systems that will address three key performance parameters: i) provide a sink for surplus water from adjacent agricultural land; ii) be profitable; and iii) deliver biodiversity protection/enhancement and other improvements in NRM.
32
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
The impediments to rapid commercial development are: • Genetics: selecting of superior cultivars from the vast native genetic resource and breeding superior varieties • Water availability and yield: woody plants have large water-use potential and create large soilwater deficits, but clever planting design is required to enable them to maximise capture of additional water and thereby maximise yield • Harvest: low cost biomass cannot be produced from short-cycle (shrub) crops without a lowcost harvester. NWCIP will build on existing genetic improvement activities to bring superior varieties of the most promising species to market in the shortest possible time. It will model the natural processes of surface water redistribution after rainfall on agricultural land to predict how much water is available for woody crops, and couple this to growth models to predict yield. The program will become a respected knowledge broker in harvester development and lead preparation of a business case to win funds for development.
Research Products
3.1 3.2 3.3
Wyalong’ mallee seed – from Florasearch Prospectus for prototype commercial harvester for short-cycle woody crops Client feasibility reports for biomass supply and processing industry investment
3.4 Prediction capability with woody crop production from farm layouts with access to variable water inputs. The program team will integrate delivery of its knowledge to commercial developers in the form of commercial feasibility assessment of specific regional project proposals across southern Australia.
Program Leader Time Commitment (as Full Time Equivalent – for each year)
Mr John Bartle
Key Researchers
0.8
Time Commitment (as Full Time Equivalent – for each year)
Mr Michael Bennell Dr Richard Harper
Private Sector Participants
0.5 0.3
Enecon Pty Ltd, Renewable Oil Corporation and The Oil Mallee Company
Farming Saline Landscapes (Program 4)
Our objective is to have 2,400 producers (25% of the farmers suffering from salinity) using ‘best bet’ technologies on over 350,000 ha of saline land, to increase their whole-farm productivity by over 10%, by 2014. The program will achieve this objective by researching and developing revegetation, water, soil, animal, crop and pasture management practices that are: (a) compatible with enterprise and regional demands; and (b) able to overcome the landscape, soil and water constraints of a range of environments. Particular emphasis will be placed on working with commercial partners and developing practices that are demonstrably profitable. The intellectual property generated will be packaged into training courses, services and physical products and commercialised.
33
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Central challenges to the program are: • Identification of additional agriculturally useful salt-tolerant plants (building on efforts in CRC Salinity) • Strategies to manage water and preclude salt build up at the soil surface integrating engineering and plant options • Strategies to maximise the impact on profit from the integration of salt land production into wide farming systems • Develop saline production systems that are robust enough be used in highly variable saltland environments • Understanding of how adoption and commercialisation of saline land farming practices can be achieved.
Research Products
4.1 HIGHPak – improved performance livestock and pasture management packages for saline land 4.2 4.3 New salt-tolerant pasture legume and grass cultivars – from PastureSearch New salt-tolerant halophytic shrub cultivars – from Florasearch
4.4 National Saltland Service Centre – a vehicle for the delivery of new tools, products and services 4.5 SALTCAP – land capability assessment tool for plant-based saline land management 4.6 SALTDecide – hydrological modelling tool to measure the impact of water management using integrated plant-based and engineering interventions both on-site and off-site This program aims to develop and commercialise a suite of profitable farming practices for the various classes of saline land across Australia. The research team includes many of the key scientific resources available in Australia in this specialised area and it is linked to strong capacity in farming systems and technology adoption.
Program Leader Time Commitment (as Full Time Equivalent – for each year)
Dr Richard George
Key Researchers
0.8
Time Commitment (as Full Time Equivalent – for each year)
Dr Edward Barrett-Lennard Dr Nicholas Edwards Professor Zed Rengel Dr Andrew Craig Mr Greg Hamilton Dr Phillip Nichols
Private Sector Participants
0.6 0.25 0.3 0.5 0.4 0.3
Australian Wool Innovation, Meat and Livestock Australia and Grains Research and Development Corporation
34
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Biodiversity and Water (Program 5)
The challenge faced by the Biodiversity and Water Program (BWP) is to link strategies and actions for managing agricultural land to its implications for biodiversity enhancement and water management. The CRC provides a unique opportunity for natural resource scientists to work collaboratively with agriculturalists, economists, sociologists and other specialists to deliver multiple benefits from farming landscapes. Apart from the major direct benefits arising from biodiversity and potable water, the program recognises that natural resource degradation is a significant direct cost and risk to the profitability of agricultural enterprises. Consumer responses to off-farm adverse environmental impacts also threaten market share. Delivery of natural resource benefits will be greatest if they are linked to profitable changes in agricultural systems. Core work of the program will centre on developing: • Management and decision packages that promote farming systems that integrate production and biodiversity • Catchment models and management strategies for new perennial vegetation systems that maintain water quantity in priority water supply catchments, while improving water quality. The risk-based decision tools and assessment products developed by the program will make an important contribution to policy development and decisions at catchment-scales with implications for farm enterprises in various geographic zones, and assist the development and application of market-based instruments. These tools and products will be developed to take into account climate risk and variability.
Research Products
5.1 Management and decision packages that promote farming systems that integrate production and biodiversity outcomes. 5.2 BioRisk – risk-based decision tool for managing hydrology to achieve biodiversity targets and improved production. 5.3 CAT Plus – catchment decision tool for perennial vegetation strategies to protect water resources in catchments. 5.4 Risk assessment products and management strategies to protect biodiversity from weeds and genetic pollution and to minimise weed control costs. Much of the research work will be undertaken with target practitioners such as farmers, CMOs and government agencies. Thus the tools and packages developed will directly address existing problems. This approach will not only lead to focused, applied research, it will form a major pathway for adoption of the strategies and tools developed by BWP. The ability to collaborate within the CRC with other programs that have vital expertise – such as Farming Saline Landscapes and Economic, Social and Policy Analysis – will play an important role in the Biodiversity and Water Program’s success.
35
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Program Leader
Time Commitment (as Full Time Equivalent – for each year)
Mr Ken Wallace
Key Researchers
0.5
Time Commitment (as Full Time Equivalent – for each year)
Dr David Freudenberger Dr Glen Walker Dr Craig Beverly Dr Margaret Byrne
Private Sector Participants
0.3 0.2 0.65 0.3
Meat and Livestock Australia
Economic, Social and Policy Analysis (Program 6)
This program plays a crucial role in advancing the commercialisation and utilisation of the CRC’s research outputs. Economic modelling, conducted in collaboration with biological and physical scientists, will help to direct biological research in directions that are most likely to yield high commercial and economic benefits, and consequently likely to be widely utilised. It will provide information of crucial importance for promoting the transfer of CRC technologies to commercial landholders. It will allow improved NRM by quantifying trade-offs between economic and natural resource outcomes. It will contribute to the evaluation of CRC impacts. Social research will also provide guidance for the CRC in its pursuit of new farm technologies that can be widely utilised. It will help the CRC understand social changes going on in rural areas that have implications for proposed new industries. These changes include farmownership turnover, demographic changes, the growth of non-commercial land ownership in some rural areas, and the dramatic growth of farm sizes in other areas. It will provide insights to scientists wishing to target their extension to regions, farming systems, or farmers for which new technologies are most appropriate and most adoptable.
Research Products
6.1 Adoptability index – assessment tool for the potential adoption of FFI CRC products. 6.2 NRM Investment Framework – decision tool for selection of priority NRM investments. 6.3 Farm business/NRM simulation game (extension of ’Salty Business’).
The new technologies and systems developed by the CRC will interact with government policies for their impact, especially in relation to NRM. Existing NRM policies are deficient in a number of respects, including their handling of the boundary between commercial and natural resource outcomes. The CRC will build on the very strong policy analyses conducted in CRC Salinity, and will extend policy analysis tools beyond salinity into other areas of NRM.
36
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Program Leader
Time Commitment (as Full Time Equivalent – for each year)
Professor David Pannell
Key Researchers
0.7
Time Commitment (as Full Time Equivalent – for each year)
Dr Rick Llewellyn
Private Sector Participants
0.6
Education and Training Strategy/Program
An effective Education and Training Program will make a critical contribution to the FFI CRC’s capacity building objective. Key elements of education and training are: • Establishment of a nationally accredited training program for agribusiness and wider client networks, and • Provision of industry ready science professionals for engagement with the wider research community, an important element in the ‘pathway to adoption’ for FFI CRC products. In addition, postgraduate research will deliver a significant contribution to the body of knowledge generated by all research programs, and to the development of innovative new farming systems.
Number of expected post-graduate enrolments (commencements) for each year
2007-08 15
2008-09 20
2009-10 15
2010-11
2011-12
2012-13
2013-14
The strategies we have developed for delivery of education and training are: • A comprehensive postgraduate education program encompassing industry supervision of research students, accredited training in generic leadership skills, together with postdoctoral opportunities and access to conference and travel assistance will provide a cohort of industry ready FFI CRC graduates with capacity to influence contemporary Australian farming practices. • A national program of accredited (Australian Qualification Framework) training in FFI CRC and NRM will be established. Extension specialists within Landmark and other influencers linked into adoption networks will have the opportunity to undertake this training. Program graduates will inform knowledge networks sustained by other support activities. Many graduates will be embedded within FFI CRC research programs, forming a key link in the programs’ path to adoption and two way communications between research activities and industry. • A number of innovative education projects will be developed including: Provision of accredited training in NRM for PhD students Post graduate level short courses that promote interdisciplinary knowledge for graduates employed in agribusiness and within wider client networks Coordination of an internship program that will enhance the industry readiness of our research graduates, and provide opportunities for industry participants to participate in research.
37
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
5.2 Program Leader
Time Commitment (as Full Time Equivalent – for each year)
Mr Scott Glyde
Key Staff
0.6
Scott Glyde (CSU) Deb Slinger (NSW DPI) John Powell (CRC Salinity) Daryll Richardson (CRC Salinity)
Private Sector Participants
Landmark and Kondinin Group MLA, GRDC and AWI Primary Industry and NRM agencies
Governance Arrangements
The core participants will incorporate a research company limited by guarantee to focus on effective utilisation and commercialisation processes that maximise adoption rates to achieve FFI CRC outcomes. This will include forming a Members Council to represent members’ interests. The council will appoint a nine-member skill-based board and be given responsibility for delivering the strategic direction for the company. The board will have an independent chair and a majority of industry or members independent of the research providers. The nature of engagement will be determined in accordance with the strategic fit of core participants, supporting participants and other stakeholders (figure 4). The strategic direction and purpose of the company is determined by members and embodied in the Commonwealth Agreement as reflected in the participants’ agreement and company constitution for implementation under the direction of the board. The participants’ agreement will set out the governance arrangements and objectives (meeting the objectives of the CRC Programme and partner investment) for contracting supporting participants and key responsibilities will be passed through from the Commonwealth Agreement. Members will meet annually in accordance with normal governance practice.
Figure 4. Relationship of partners to the Research Company
38
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Governance arrangements will include a formal process for industry engagement in project development and management. This will be the foundation of a close, two-way link between industry and the conduct of R&D, education and training, and commercialisation and adoption. Flexibility will be retained to commercialise key products via tender or expression of interest processes if the existing commercialisation infrastructure of participants, including our strategic supporting participants, is not suitable. Supporting participants and new commercial partners will be engaged through project agreements with the CRC company. The management of the CRC will comprise a Chief Executive Officer, General Manager Research, General Manager Commercialisation and a Chief Operating Officer (figure 5). Seven program leaders will be 40% or 20% cash funded appointments, in addition to their inkind research roles, to maximise the focus of the CRC on achieving outcomes.
Figure 5. FFI CRC Organisation chart
The FFI CRC participants have appointed Mr Andrew Inglis as Acting Chair. Mr Inglis has strong board experience including Chair of GRDC and Plant Health Australia, Deputy Chair of ABB Grain, and Director of AWB Ltd. Also, he is the Deputy Chair of the CRC for Australian Weed Management. Mr Kevin Goss has been appointed Acting Chief Executive Officer. He has held senior executive appointments for 17 years, including Deputy Chief Executive, Murray-Darling Basin Commission; has been a Board member of three CRCs and is currently Chief Executive Officer and Board member of CRC Salinity.
Managing Transition from CRC Salinity
Overall wind-up arrangements
The CRC Salinity has commenced planning and made budgetary provision for the wind up of the current CRC, in its Two Year Operating Plan & Budget 2006/07 to 2007/08. It will submit its wind-up plan to the CRC Programme following its February Board meeting 2007, when the decision on the FFI CRC application is known. The Governing Board of CRC Salinity and its committees will undertake a critical assessment of its research, education and training, and commercialisation and utilisation activities to determine which, at the end of the grant period, will be completed or assigned to CRC participants. This assessment, overseen by the Board’s Finance and Audit Committee, will result in a specific Board policy to address ongoing collaborative opportunities and custodial arrangements for knowledge assets.
39
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Most CRC staff are employed by participant organisations and project budgets provide for their residual entitlements. The CRC Salinity is an unincorporated joint-venture with its headquarters at The University of Western Australia (UWA). The participants in the FFI CRC have agreed that, if successful, it will continue to be headquartered at UWA and that the University continues to provide accommodation and corporate services. Senior staff within CRC Salinity have been assigned acting roles in the planned management of FFI CRC which will ensure smooth transfer of operations. Planning for the appointment of the independent Board of FFI CRC Ltd is underway. The CRC Salinity has made excellent progress against milestones in the Commonwealth Agreement, as confirmed by the independent review. It will meet any matters required under the Agreement in the terms set out in the wind-up plan and managed as a dedicated activity and budget line, within Year 1 of the operation of the FFI CRC.
Completion of Current Research (include IP arrangements).
The Two Year Operating Plan specifically provides for: • Peak research activity being completed at the end of Year 6 • Scaled back research activity in Year 7 (2007-08) with a focus on closure activities – commercialisation and utilisation, communication and extension, custodial arrangements for databases, publication and final reporting • These activities extending into 2008-09 if necessary. While the majority of CRC Salinity’s projects will terminate in Years 6 and 7, several research projects will continue under the direction of the incorporated FFI CRC, if successful, with UWA acting as agent. These research activities have the RDCs committed to FFI CRC as major collaborators, and are important opportunities strategically aligned with this Stage 2 application. Project contracts with the RDCs will provide for two scenarios – with and without FFI CRC. CRC Salinity has sound IP arrangements in place in preparation for wind-up and handover: • All projects have been subject to Board approved plans, with contracts for externally funded projects, that specify Background IP and shares for Project IP • There is a clear IP management policy and the IP register is up to date. At the Board’s February 2007 review, this policy will be revised to focus on transfer of IP to the new CRC, if successful, or to core participants in the existing CRC according to Project IP shares. Nearly all will be core participants in the new CRC and have indicated that they will make similar arrangements regarding background and centre IP.
Completion of commercialisation and utilisation activities
The Two Year Operating Plan provides for a significant shift in internal priorities across Years 6 and 7, from research activities to commercialisation and utilisation, or path to adoption activities. For instance, two-year projects have been commissioned to synthesise knowledge from R&D into extension, training and communication products, and to focus on cultivars for release. These include: • Publication of five ‘prospect statements’, each providing the business case for farmer adoption of a key plant-based option for managing dryland salinity. The first is Lucerne Prospects, due for release in August 2006. • A new ‘Increasing the effectiveness of lucerne extension’ project in collaboration with the Grains R&D Corporation.
40
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
• A new business plan for the ‘Salinity management through agribusiness’ project in collaboration with the Landmark Company. • New ‘national extension leader’ and ‘salinity training project’ activities. • Initiating and sponsoring the 2nd International Salinity Forum, to be held in Adelaide 2008, which will showcase CRC Salinity’s work nationally and internationally. • Continuation of SALT magazine and Focus on Salt newsletter to 12,000 subscribers. The review of herbaceous perennials breeding and development projects in 2005 identified 10 opportunities for cultivars to be transferred to commercial breeding or for commercial release. These will be completed by the end of Year 7. The major projects to be continued under FFI CRC, if successful, have commercialisation/utilisation activities built in from the outset.
Completion of education and training program
Program 1 – Communication and Education, has been managed so that all postgraduate education and undergraduate course development will be completed by Year 7, with sufficient budget provision in the Two Year Operating Plan for scholarships and other expenses. There is a policy to assist the transition from postgraduate education to career placement, involving exit interviews as part of an evaluation and a database for follow-up as part of an expanded ‘transition to early career’ activity in FFI CRC, if successful.
Independent review of achievements
The Independent Review Panel has concluded that the existing Centre’s outcomes will make a significant contribution to Australia’s industrial, commercial and economic growth, in addition to substantial un-costed contributions to environmental sustainability. Application of technologies developed by the Salinity CRC will have a significant positive impact on the serious problem of dryland salinity in the agricultural landscape, delivering substantial benefits, particularly in regional Australia, and well-above commercial return on the taxpayer investment. In forming its independent conclusions, the Panel considered a detailed benefit/cost analysis (BCA) undertaken by the Centre on a “set of relatively important or successful projects” together with the results of an independently conducted survey of users and stakeholders. The BCA shows that the net benefit of the Salinity CRC will be of the order $0.5 billion based on conservative methodology. For comparison, the total cost of the CRC will be $186 million over seven years. The major outputs of the Salinity CRC are (with Independent Review Panel comments): • EverGraze, a new livestock production approach from perennials in high rainfall recharge zones to reduce recharge and increase profitability – NPV of $38.1 million. EverGraze has also built on existing networks and has been described as an “outstanding” project. While its use is restricted to areas that have a small amount of dryland salinity risk, the comprehensive and strategic approach to constructing a farming system is to be commended and can have wider application. It is a good example of systems research, and any student exposed to this program will be a great asset to agriculture. • Novel land management technologies for Sustainable Grazing on Saline Lands (SGSL). The BCA provided a NPV of $24.6 million – engaged farmers well, again successfully building on existing networks and is being adopted. • Lucerne systems development and acid tolerance – NPV of $23.7 million – “has made very impressive progress” and “is timely and appears promising”.
41
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
• Developing herbaceous perennials for new farming systems, such as EverGraze – NPV of $115 million. “The introduction and selection of a range of plants suitable for recharge areas has generated a large range of options.” • Florasearch identifies new woody perennial options for use on low and medium rainfall farms – NPV of $170 million. • Catchment Analysis Tool (CAT) used to analyse farming enterprises which are able to adopt the EverGraze system along with an economic analysis tool developed within DAFWA – this combination of analyses may well be unique worldwide, and is leading to novel mixed (crop and grazing) farming systems that are being adopted. The focus of the current CRC is the management of dryland salinity through the use of perennial plant-based farming technologies. The Independent Review Panel considers that the CRC is now firmly established on sound foundations with an important research program, high quality professionals, and impressive governance, management and accountability systems. Centre outputs are now starting to demonstrate the potential of what has been put in place. The Panel’s view is that this organisation and its people will undoubtedly deliver on this potential.
Independent reviewers
Dr John Passioura, FAA, Honorary Research Fellow and formerly Chief Research Scientist, CSIRO Plant Industry, Chair of Review Panel Mr Denis Hussey, Consulting Economist, formerly MD of ACIL Consulting; Head of Policy Division, Commonwealth Department of Primary Industry and Deputy Director Bureau of Agricultural Economics Mr Neil Young, Farmer and Member of the Western Panel of GRDC
42
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Section 4: The Financial Case
“The funding sought will generate a return and represents good value for the taxpayer.”
A seven-year investment of $34.125 million is sought from the CRC Programme to operate the Future Farm Industries CRC. The CRC will manage a planned total resource of $114 million, including 902 FTEs over seven years.
Return on Investment
Independently verified benefit cost analysis (BCA) estimates that the most-likely Net Present Value (NPV) generated from the proposed CRC will be $1.3 billion27, with benefits being 12 times the full cost of the proposed CRC, or 40 times the CRC Programme funding requested (all in present value terms). The estimated internal rate of return is 45%. The BCA included detailed sensitivity analyses of each component area of research, examining the influence of multiple risk factors. The table below summarised these results for NPV, with the sensitivity analyses aggregated under the headings “Conservative”, “Mostlikely” and “Optimistic”. These cover commercial risks, including changes in market prices, research success and adoption parameters, and technical risks. Based on these calculations, the internal rate of return varied from 26% (conservative) to 47% (optimistic). Under the optimistic assessment contribution to industrial and commercial growth would more than double our ‘most-likely’ estimate, and this would occur if adoption rates are faster, favoured by higher economic returns and better technical performance of new farming systems, adding 30% to undiscounted benefits.
Alternative Real Discount Rates 7.5% 5.0% 2.5% Conservative $500m $810m $1,370m
Estimates Most-likely $800m $1,270m $2,120m Optimistic $1,180m $1,850m $3,120m
The mix of benefits changes over time (figure 6), with the largest coming from productivity growth and new industries. The contribution of salinity protection measures to the overall valuation of outcomes increases steadily in discounted terms for about 20 years. There is an initial benefit peak due to an improved information base for policy processes, particularly benefiting the cost-effectiveness of activities funded by governments and catchment management organisations (CMOs).
27
Pannell D 2006, “Benefit-cost Analysis of Proposed CRC for Future Farm Industries”, The University of Western Australia. 43
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Figure 6. Gross benefits for FFI CRC discounted at 5%. Year 1 = 2007.
Compliance with application principles
The benefits of FFI CRC have been modelled over a 30 year period (50 years in the case of salinity containment) and discounted in line with the principles required of the application 5% as the reference discount rate (risk-free bond rate) with 2.5 and 7.5% considered in sensitivity analysis (above). A vast number of specific assumptions and estimates were used in the analysis (documentation exceeds 200 pages), and it is only possible here to show how these principles have been applied in several examples. Adoption: Adoption costs are fully accounted for in the estimation of net benefits to land managers. For each technology, an area of potential adoption was estimated, based on factors like the area of suitable soil types, and then peak adoption levels were specified as a conservative proportion of the potential area. For example, for the perennial pasture, winter active cocksfoot, the potential area was estimated as 1.2 million ha, and the area of peak adoption was set at 0.18 million ha (15% potential area). Peak adoption was specified considering evidence about other agricultural technologies in the past. Agricultural technologies are typically adopted over 10 to 60% of their potential range, depending on a well understood range of factors, including economics, the complexity of the technology, and its compatibility with current management systems. The FFI CRC’s networked approach to commercialisation and utilisation, supported by the Adoptability Index will put its adoption rates towards the upper end of this range. Lags until the commencement of adoption by landholders were 1 to 5 years; and further lags until the peak level of adoption were around 10 years in many cases. For example, for Lotus, one of the proposed perennial pasture species, the combined lags mean that peak adoption will not be reached until 2020. These lag assumptions are consistent with those typically observed in agriculture; as one example, research to develop the new crop lupins commenced in the early 1970s, and adoption peaked in the mid to late 1980s. Research lags: Lags until the delivery of viable new technologies from the research ranged from 3 years to over 10 years, depending on the technology. Quantification of benefits: The analyses to quantify benefits were highly sophisticated, and made use of a set of internationally recognised economic models that are at the cutting edge for this type of analysis. The MIDAS modelling illustrated above has been applied for
44
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
over 20 years and is now available in several states28. It is a powerful tool designed for assessing impacts of new technologies on the economics of farming. Regional models were developed with close collaboration from farmers, the end users of CRC technologies, so their application combines end-user knowledge with powerful economic analysis. Estimated improvements in annual profit per hectare varied widely depending on the technology, and examples include $10 to $30 per ha for new perennial pastures, $46 per ha for new salt-tolerant wheat, and $40 to $170 per ha (depending on the region) for new high-intensity grazing systems. To illustrate MIDAS application, it was used for pre-feasibility modelling of the EverGraze project in CRC Salinity (figure 7)29. Results showed how farm profit can be increased by combining multiple perennial pasture species into an integrated farming system, rather than relying on a single species. In addition, the profit-maximising area of perennials is increased. If lucerne is the only perennial grown in this farming region, the profit-maximising area of perennials is 500 ha, and the maximum whole-farm profit is $54,000 per year, on average. If additional herbaceous perennial species (kikuyu and tall fescue) are integrated, the maximum profit increases to $81,000, and the optimal area of perennials increases to 1,400 ha. The farmer benefits directly from increased profit and, in time, from reduced salinity due to the larger area of perennials grown.
100
Luc + Kik + Fes
Farm profit ($/ha/yr)
80 60
Luc + Kik
40 20
Luc only
0 0 500 1000 Area of the perennial (ha)
Figure 7. Whole-farm profit as a function of the area of perennial pastures, singly and in combinations. (Luc = lucerne; Kik = kikuyu; Fes = tall fescue)
1500
2000
The capacity to conduct analyses like this will allow the FFI CRC to target its activities to regions where they can have the greatest commercial and economic impact, and to achieve targets for adoption of FFI CRC products.
28
Morrison DA, Kingwell RS, Pannell DJ and Ewing MA 1986, A mathematical programming model of a crop-livestock farm system, Agricultural Systems 20(4): 243-268; Pannell DJ 1996, Lessons from a decade of whole-farm modelling in Western Australia, Review of Agricultural Economics 18: 373-383; and John M., Pannell DJ and Kingwell, RS 2005, Climate change and the economics of farm management in the face of land degradation: dryland salinity in Western Australia, Canadian Journal of Agricultural Economics 53: 443-459. Young J 2005, unpublished report to CRC Salinity, University of Western Australia, Crawley. 45
29
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
A second example relates to the integration of salt-tolerant shrubs into farmer’s whole-farm grazing system30. These shrubs provide good quality feed in the period of the year when feed is most lacking. Figure 8 shows the results of a series of MIDAS model runs in which the area of saltland pasture is varied. It shows that highest whole-farm profit is attained when saltland pastures are sown on 120 hectares of this farm type. It is supported by sensitivity analysis of how the marginal value of increasing the area of saltland pasture is affected by the area of saltland pasture and the prices of animal products. Results also provide details of which soils should be sown to saltland pastures, and when they should be grazed to maximise profit.
Figure 8. Change in whole-farm profit with different areas of saltland pasture. (Whole-farm profit is profit at full equity before tax, minus the opportunity cost of capital.)
More generally, estimates of benefits were based on conservative assumptions, such as that any land already salinised will not be recovered, or that farmers will not consider salinityrelated benefits when considering adoption of perennials. Risks and uncertainties: For each technology, specific risk factors were identified and subjected to detailed sensitivity analysis. For example, for salt-tolerant wheat, the analysis examined risks associated with market prices of outputs from the new crop and from its competitor land uses; grain yields; the area of land to which the new wheat will be applicable; the peak level of adoption by growers; the speed of adoption by growers; and the discount rate. The weighting of these variables changes across technologies and this is captured in the sensitivity analysis summary presented earlier. For different technologies, different variables had the biggest influence on results, but overall, the key factors tended to be the area of physical environments (especially soil types and rainfall) suitable for that technology, and the assumptions made about adoption. The reality of different environments requiring different technologies is managed by pursuing a diversified portfolio of plant types, each suitable for different environments. Adoption risks will be minimised by engagement of industry and end-users in project development, by participation of farmers and other end-users in field research, and by the close involvement of social scientists and economists in the assessment of prospective technologies early in the research process, and then again prior to extension/commercialisation.
30
O’Connell M, Young J and Kingwell R 2006, The economic value of saltland pastures in a mixed farming system in Western Australia, Agricultural Systems 89: 371-389.
46
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Risk related to the response of the off-farm sector was also included, for example, by assigning probabilities of processing plants being established to service new woody perennial industries. This is a higher risk/return area for investment, requiring detailed analysis. Figure 9 illustrates the possible scenarios regarding the success of integrated wood processing (IWP) plants and wood panel plants. The probabilities shown are for the “with CRC” scenario. Without the CRC, they are adjusted (e.g. to 30, 45, and 25% respectively for the IWP Plant) and the evaluation is based on the difference between the two probability distributions.
IWP Plants Panel Plants
Successful (70%) Successful (50%)
Unsuccessful (30%) Successful (70%)
With CRC
Short delay (30%) Unsuccessful (30%)
Successful (70%) Major delay (20%) Unsuccessful (30%)
Figure 9. Probability distribution for success of integrated wood processing
Risks around the likely success of the research process are included by specifying probabilities of success, or of different levels of success. For example, it was estimated that there is an 80% probability of breeding a lucerne variety that is slightly more acid tolerant, and a 30% probability of breeding a substantially more acid tolerant variety. Attribution: This was carefully considered for each element of the research. The analysts assessed the marginal difference to economic outcomes resulting from the CRC’s research, allowing for the contribution of other research activities. For example, the following attribution rates were estimated: 30% for high-rainfall Lotus; 10% for danthonia wallaby grass; 15% for strawberry clover; 40% for winter-active cocksfoot.
Justification of Commonwealth funding sought
This business case seeks $34.125 million of Commonwealth investment that will contribute 30% of the planned total resources budget. The companies, industry and research providers have made a substantial commitment of resources to the new CRC, with the Commonwealth’s investment leveraging about more than 3.5 times researcher and infrastructure in-kind resources. This is a viable R&D collaboration with a clear strategy that will now exceed the $5 million target for additional participant contributions after July 2007 (in the business concept case) starting with innovative grazing systems projects already agreed or under development (‘expanded EverGraze’ and Sustainable Grazing on Saline Land Phase II – see below), and followed up by woody crop industries and NRM solutions ‘market opportunities’. The CRC’s investors are highly committed and regard the CRC as a professional, wellmanaged organisation that will achieve its planned outcomes. The potential to achieve these benefits is significantly increased by the CRC’s planned structure, which directly involves and engages key industry investors, agribusiness, new knowledge brokers and research, education and training providers. The returns on investment are expected to increase in line with the CRC’s strategy to further increase the level of investment and total resources, accelerate the commercialisation and adoption of its research outputs, and achieve greater outcomes under a business growth strategy. The CRC Salinity’s track record and these new grazing systems projects under consideration demonstrate this capacity to build resources and accelerate outcomes from an already viable base.
47
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
The detailed planning of research activities, including identification of products and prediction of adoption rates, shows that achievement of our planned outputs and milestones will require the resources identified, particularly the amount of CRC grant requested. Without the CRC funds the integrated nature of this program of activities would not happen because no single participant has the remit to deliver such an integrated and sweeping program to address the industry needs and opportunities for agriculture in southern Australia. When operational, FFI CRC will apply the rigorous approach to research planning and management that has been an important strength of CRC Salinity, including preexperimental impact analysis, as described in Selection Criterion 4. This is a critical factor in managing technical risk, maximising returns to the CRC Programme and participants, and providing value to the taxpayer.
Budget and resource allocations
The planning for this CRC has sought to maximise the potential for adoption of new products and technologies by increasing the allocation of resources to commercialisation and communication: • 78% of the CRC’s resources will be directed to integrated and industry-aligned research commercialisation and communications programs to maximise value from Profitable Perennials™ development • 12% of resources will be allocated to education and training in support of uptake and diffusion of the Profitable Perennials™ brand • 548 contributed FTEs will be supported by the purchase of 354 FTEs; and • Management and administration costs will be limited to 10%. The estimated operating budget for FFI CRC is based on careful matching of program investment with contribution to outcomes (see table below), following analysis of the potential for product adoption in the three areas of market opportunity – innovative farming systems, new woody crop industries and NRM solutions for catchments. The table below excludes resource allocation to management and communications activities across all programs. Investment across FFI CRC outcomes: Productivity growth in existing industries Profitable new regional industries Salinity damage reduced Other environmental benefits Capacity building Commercialisation/Utilisation Program P1, P2 P3 P4 P5 P6,P7 Total Resources $44.8m $8.5m $10.6m $9.9m $8.7m $11.5m Per annum $6.4m $1.2m $1.5m $1.4m $1.2m $1.6m % total resources 48 9 11 11 9 12
It is acknowledged that the CRC Programme will value staff in-kind resource at nominal values to ensure matching resources are provided. However, the core participants’ contributions, and the value of overheads for cash-funded positions, will be valued at market rates for purposes of determining equity in the research company. The non-staff in-kind contributions in the resources estimates table have been valued at the CRC Programme’s nominal rate for staff in-kind contributions. This removes from industry and research provider in-kind FTEs salary related on-costs and retains the imputed cost of rent and the value of specialist equipment, as well as operating and support costs according to Program guidelines.
48
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
The management and administration component of the budget is based on the planned organisational structure (estimated salary costs) and estimated costs for operating a company with a skills-based board. It is a flat structure with key program leaders cash funded in part by the CRC in order to exceeds 50% time commitments to ensure delivery of milestones.
Firm commitment of cash and/or in-kind contributions
The CRC’s committed cash resources from Industry ($14.35m) and Public ($5.7m) demonstrate strong support for the FFI CRC bid. Compared to the CRC Salinity, the new CRC will commence with higher industry funding to be further increased with contracting of the grazing systems projects under consideration. This reflects growing commitment to pushing the boundaries of productivity growth within strategic natural resource management objectives. The confidence to deliver this is built upon the development of core expertise from the existing CRC. Industry funders are providing three times the level of cash from research providers, a ratio that will increase during the life of the CRC. State agency participants will play a dual role through involvement as research users in industry extension activities and as research providers. They will contribute $2.1m million in cash and $34m of inkind resources. Universities and CSIRO will also make substantial contributions accounting for $21m of total resources, including $1.82m in cash. The FFI CRC participants resolved in May 2006 that the new CRC would be headquartered at UWA, building on the strength of the current hosting arrangements for the CRC Salinity. A non-staff inkind contribution from UWA of $546,000 has been included to provide for use of office space and facilities at UWA. Other firm cash of $1.7m has been included in the Stage 2 bid. This reflects the WA State Government’s commitment to CRC’s headquartered in WA.
Strategies to obtain additional participants and resources
The CRC’s business growth strategy will generate additional resources to accelerate the planned timelines for delivering program outputs and lay the foundation for larger scale adoption beyond the life of the CRC. Several projects currently under negotiation (discussed above) have also been excluded from the financial tables in the Stage 2 application. For example, the grazing systems projects under consideration total $5.9m. The CRC will revise its original business performance targets ($5m in the business concept case) with a focus on company investments in woody crop industries (at least $3m for harvester development) and additional revenue from consulting activities and royalties ($1m). The Stage 2 bid has retained the original seven year target of $33m of income from industry and public sources derived from business growth and performance. This growth strategy is matched to the commercialisation and utilisation strategies in Selection Criterion 2. It comprises: • Consolidating investment into the major CRC programs by the key industry R&D corporations – adding to the core participant resources • Attracting additional private sector companies into commercialisation of business opportunities, products and services – typically bilateral research contracts with the research company, some involving non-disclosure agreements • Earning revenue from services provided, where these activities are highly compatible with achieving the outcomes • Additional investment by CMOs and farmer groups to applied R&D projects, and commercialisation and adoption activities – projects and activities that will often be regional in scope, and • Drawing additional public sector R&D providers in Queensland to the collaboration, to ensure the best expertise in the agro-climatic zone shared with NSW.
49
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Section 5: Outputs and Milestones
Commercialisation and Utilisation Strategy - Outputs and Milestones
1. Productivity growth in existing industries ($350 million NPV new perennial plant-based farming systems on 7.4 million hectares (mha) of agricultural land) Output 1.1: EverGraze Plus – More livestock from perennial$ and More livestock from native perennial$ grasses in the high rainfall zone (>500 mm) > > > EverGraze practice change on 500 farms EverGraze package to 3,000 end users EverGraze practice change on 2,400 farms June 2011 June 2009 June 2011 June 2014 June 2014 April 2013 June 2014 June 2011 June 2009 June 2010 July 2011 June 2014
Output 1.2: Forage cultivars (chicory, Lotus or perennial Medicago) – from Pasturesearch > > Pre-basic seed delivered to commercial partner Cultivar enters the market accompanied by information on management and crop integration requirement
Output 1.3: New acid-tolerant perennial forage cultivars – from PastureSearch > > > Pre-basic seed to commercial partner Commercial release New forage planted on 100 farms
Output 1.4: A new herbaceous forage for the warm season, summer dominant or high rainfall zone with a management and utilisation package commercially released - from PastureSearch with application in EverGraze > Agreement with seed company for commercial cultivar release and distribution completed
June 2014 June 2014 June 2008 June 2014 June 2014 June 2014 June 2012 June 2012 November201 3 December 2013
Output 1.5: Enrich – new shrub-based livestock production system for landscape and natural resource health in the low/medium rainfall zone > > > Instruction manual for components to 1,000 producers Full package to 3,000 producers Practice change on 500 farms
Output 1.6: New shrub cultivar (Atriplex) – from FloraSearch > > Pre-basic clones to commercial partner Commercial release
Output 2.1: EverCrop – new farming system in each of 3 agro-climatic zones > 100 trained and accredited users
50
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
> >
Full production package to producers Practice change on 100 farms
December 2013 December 2014 June 2014 June 2014 July 2014 December 2013 December 2012 December 2013 June 2014 April 2012 December 2013 June 2014 December 2014 December 2014 June 2012 June 2008 June 2012 June 2012 June 2008 June 2010 June 2014
Output 2.2: Drought tolerant forage legume cultivar – from Pasturesearch > > Pre-basic seed to commercial partner 10 farms with small plot demonstrations
Output 2.3: EverCrop Decide – new crop systems analysis tool tools that integrate production and conservation objectives > > Tool fully developed and tested for each target zone Distribution to 50-100 extension providers in 5 key partner agencies (WA, SA, Vic, NSW)
Output 2.4: Feed grain quality salt/waterlogging-tolerant wheat > > > Pre-basic seed to commercial partner Commercial release 10 farm demonstration plantings
Output 2.6: Breeding material for bread quality salt/waterlogging-tolerant wheat > Breeding lines available for commercial development
Output 2.7: Prospectus for development of perennial wheat > > Confirmation of freedom to operate with germplasm from international collaborators Report to the consortium of potential investors on potential and feasibility of a full breeding program
Output 6.1: Adoptability index – assessment tool for the potential adoption of FFI CRC products > > > Preliminary index developed Use by 80% of projects in FFI CRC portfolio Use by 20% of relevant projects in external organisations
2. Profitable new regional industries ($170 million NPV new woody crops on 0.1 mha agricultural land feeding new processing industries) Output 1.5: Salt/waterlogging-tolerant wheat suitable for biofuel > > Pre-basic seed to commercial partner 10 farm demonstration plantings January 2015 April 2013 June 2015 December 2012
Output 3.1: ‘Wyalong’ mallee seed – from FloraSearch
51
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
> > >
Establish strategy background IP access and for IP protection of resulting cultivars. Establish commercial partnership for seed marketing. Commercial release
December 2008 June 2010 June 2013 June 2012 June 2008 June 2009 June 2012 December 2010 December 2007 December 2009 December 2010 June 2012 June 2012
Output 3.2: Prospectus for prototype commercial harvester for short-cycle woody crops > > > Prospectus completed CRC led program to raise capital to develop prototype harvester First commercial prototype under construction
Output 3.3: Client feasibility reports for biomass supply and processing industry investment > > > Open contacts with emerging processing industry developers. Win contracts and first reports completed. Use water/plant growth modelling tool for yield prediction and feasibility analysis
Output 3.4: Prediction capability with woody crop production from farm layouts with access to variable water inputs. > Use water/growth model in feasibility investigation for commercial clients.
3. Salinity damage reduced ($350 million NPV assumed conservatively that 1.6Mha of agricultural land will have the onset of salinity delayed or prevented) Output 4.1: HIGHPak – improved performance livestock and pasture management packages for saline land > Saltland pasture, livestock managememt and farm integration packages delivered to the National Saltland Service Centre June 2014 December 2013 December 2013 December 2010 December 2013 June 2014 June 2011 June 2013 June 2014 December 2010
Output 4.2: New salt tolerant pasture legume and grass cultivars – from Pasturesearch > > Commercial release of first salt-tolerant legume cultivar Commercial release of final 2 cultivars
Output 4.3: New salt tolerant halophytic shrub cultivars – from FloraSearch > > > Pre-basic clones to commercial partner Commercial release of two cultivars New shrubs planted on 100 farms
Output 4.4: National Saltland Service Centre – a vehicle for the delivery of new tools, products and services
52
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
> > >
Fully operational with commercialisation plan developed SGSL technologies implemented on 2,000 farms HIGHPak technologies trialled on 1,000 farms
June 2010 July 1905 June 2014 December 2007 December 2007 December 2011 December 2012 December 2011 June 2011 June 2014 December 2010 December 2009 December 2010
Output 4.5: SALTCAP – land capability assessment tool for plant-based saline land management > > > SALTCAP-1 launched SALTCAP-2 launched 500 trained and accredited users
Output 4.6: SALTDecide – hydrological modelling tool to measure the impact of water management using integrated plant-based and engineering interventions both on-site and off-site > > SALT Decide launched 60 trained and accredited users
Output 6.3: Farm business/NRM simulation game (extension of ‘Salty Business’) > > Delivery of 10 workshops with catchment bodies, policy advisers, scientists and students Delivery of workshops with catchment bodies, policy advisers, scientists and students according to demand
4. Other environmental benefits (Unpriced benefits including enhanced habitat values and ecosystem services, protection of off-site biodiversity values and management of weed risk) Output 5.1: Management and decision packages that promote farming systems that integrate production and biodiversity outcomes > Developed and validated models refined as management packages and linked to appropriate industry program training and application groups June 2014 June 2014
Output 5.2: BioRisk – risk-based decision tool for hydrological ecosystem services > > > Beta testing with selected stakeholders Licensed full application Tool practised in six catchments (or sub-catchments).
June 2014 June 2012 June 2014 July 2014 June 2014 June 2009 June 2012 July 2012
Output 5.3: CAT Plus – catchment decision tool for perennial vegetation strategies to protect water resources in water supply catchments > > > Licensed application of current CAT Beta testing of CAT Plus with selected practitioners Licensed application of CAT Plus
53
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
>
Tool practised in six catchments (or sub-catchments)
August 2012
5. Capacity building ($360 million NPV attributable to more effective government policy and national/regional investment programs) Output 6.2: NRM Investment Framework – decision tool for selection of priority natural resource management investments > > > Pilot biodiversity module completed with CMOs Pilot water quality module completed with CMOs 10 CMOs using NRMIF to guide their investments June 2013 June 2010 June 2013 June 2014 June 2014 June 2012 June 2013 June 2014 June 2014 June 2011 June 2014
Output 7.1: Postgraduates – professionally trained for employment in relevant disciplines > > > 10 industry ready PhDs graduated 30 industry ready PhDs graduated 50 industry ready PhDs graduated with 90% of higher degree students completing
Output 7.2: Profitable Perennials™ accredited training program > > National training program in place 250 completed training and accredited to minimum Certificate III
Research and Development Programs – Outputs and Milestones
1. Productivity growth in existing industries ($350 million NPV new perennial plant-based farming systems on 7.4 million hectares (mha) of agricultural land) Program 1 - Future Livestock Production Output 1.1: EverGraze Plus – More livestock from perennial$ and More livestock from native perennial$ grasses in the high rainfall zone (>500 mm) > > Experimental sites with high output meat and perennial pasture systems completed in 3 states Redesign of the integration of native and improved pastures to produce catchment health through profitable grazing in the high rainfall zone Commercial scale field experiments to evaluate redesigned native pasture systems completed and interpreted at 3 sites June 2011 June 2008 June 2008
>
June 2011 June 2014 June 2009 June 2010
Output 1.2: Forage cultivars (chicory, Lotus or perennial Medicago) – from PastureSearch > > Develop breeders lines from elite plants in existing trials Commence evaluation of elite germplasm (selected and multiplied at Genetic Resource Centres) compared to breeders lines and existing cultivars at 4 sites. Field evaluation completed and potential cultivars identified
>
June 2012
54
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
>
Seed produced from best individuals (within superior lines) for cultivar release
June 2014 June 2011 June 2010 June 2014
Output 1.3: New acid-tolerant perennial forage cultivars – from PastureSearch > Extensive field testing for development and utilisation packages completed.
Output 1.4: A new herbaceous forage for the warm season, summer dominant or high rainfall zone with a management and utilisation package commercially released - from PastureSearch with application in EverGraze > > Field testing of assembled elite germplasm undertaken in 3 key target environments Finalisation of field performance testing delivering a cultivar for commercial release
June 2008 June 2012 June 2014 June 2010
Output 1.5: Enrich – new shrub-based livestock production system for landscape and natural resource health in the low/medium rainfall zone > Laboratory experiments on the use of second plant compounds (in situ) to improve gut health and function completed for 50 candidate shrubs. In vivo assessment for 10 shrubs Experimental sites on shrub systems with strong stakeholder input completed at 3 sites Climate risk analysis, forced de-stocking, supplementary feeding, soil erosion, water use and soil health quantified.
> >
June 2012 June 2013 June 2008 June 2008
Output 1.6: New shrub cultivar (Atriplex) – from FloraSearch. > Target shrubs with the potential to decrease climate risk, improve animal health, production and welfare, and improve water use, soil health, perenniality and biodiversity. Clonal shrub nursery established Superior shrub clones tested extensively in laboratory and field for growth, nutritive and anti-nutritive value and persistence
> >
June 2008 June 2010
Program 2 - Future Cropping Systems Output 2.1: EverCrop – new farming system in each of 3 agro-climatic zones > Systems program designed to optimise profit, diversity of enterprises and environmental outcomes following identification and active participation of key partners (including adoption pathways) Pre-experimental economic and catchment modelling completed Research program completed Profit and hydrologic impacts predicted through modelling December 2013 March 2009
> > >
December 2009 June 2013 December 2013 June 2014
Output 2.2: Drought tolerant forage legume cultivar – from PastureSearch
55
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
> >
Field testing (from 3 key sites) used to identify potential cultivars for more intensive testing. Cultivars selected on the basis of multi-site field performance
June 2010 June 2012 December 2013 December 2008 December 2009 December 2011 June 2014 December 2009 December 2012 December 2014 December 2010 December 2012 December 2014 June 2012 June 2008 June 2011 June 2012
Output 2.3: EverCrop Decide – new crop systems analysis tool tools that integrate production and conservation objectives > > > Analytical tools assembled and pre-experimental modelling, production economic and hydrologic completed Report on key existing species and system constraints and spatially explicit opportunities in target landscapes Model development completed and preliminary tested
Output 2.4: Feed grain quality salt/waterlogging-tolerant wheat > > Lines with high fertility and in Australian backgrounds available for field trials Field evaluations completed
Output 2.6: Breeding material for bread quality salt/waterlogging-tolerant wheat > > > Most tolerant bread wheat germplasm identified from world collections Most tolerant lines from progeny of wide-hybridizations identified Field and other evaluation of most tolerant advanced breeding lines completed
Output 2.7: Prospectus for development of perennial wheat > > > Acquire access to preliminary germplasm for field assessment Complete field assessment of potential of unadapted 'perennial wheat' to deliver against production, yield and water use targets Use data, modelling and analysis of breeding opportunities and strategies to assess the potential scale and economic impact of a future perennial wheat industry.
Program 6 - Economic, Social and Policy Analysis Output 6.1: Adoptability index – assessment tool for the potential adoption of FFI CRC products > > > > Identify and quantify components of the adoptability index. Complete analysis of anticipated property turnover in the MurrayDarling Basin. Develop simple risk assessment tool for inclusion in AI. Analysis of implications of changes in agriculture for CRC adoption and commercialisation New economic modeling to inform the AI. June 2012 June 2008 December 2010 December 2011 December 2009
56
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
2. Profitable new regional industries ($170 million NPV new woody crops on 0.1 mha agricultural land feeding new processing industries) Program 2 - Future Cropping Systems Output 2.5: Salt/waterlogging-tolerant wheat suitable for biofuel > > Lines with high fertility and in Australian backgrounds available for field trials Field evaluations and selections for biofuel quality traits completed January 2015 December 2009 December 2012
Program 3 - New Woody Crops and Products Output 3.1: ‘Wyalong’ mallee seed – from FloraSearch > > > Establish breeding and selection infrastructure -seed nurseries and field progeny test sites. Establish clonal seed orchards. Establish genetic gain experiments. December 2012 December 2007 December 2008 June 2011 June 2012 December 2007 June 2008 December 2010 June 2008
Output 3.2: Prospectus for prototype commercial harvester for short-cycle woody crops > > Review biomass supply chain options, prepare conceptual specification of preferred option and estimate development cost. Prepare business case for private and public investment in operational prototype.
Output 3.3: Client feasibility reports for biomass supply and processing industry investment > Use economic analysis and water/growth model yields to show local and regional scenarios where biomass supply from short and long cycle woody crops is economically competitive with annual plant agriculture. Use GIS and model outputs to predict volume, distribution and cost of biomass supply for proposed industry development. Conduct feasibility investigation of biomass supply for industry developers Prepare case study material for regional NR managers and economic planners.
> > >
December 2009 December 2009 December 2009 June 2012 June 2008
Output 3.4: Prediction capability with woody crop production from farm layouts with access to variable water inputs. > Selection of suitable modelling framework and case study sites to link local surface water run-off with yield of woody crop belts, and explore interface with CAT. Preliminary model calibrations and outputs produced based on data from study sites and outputs for early application.
>
December 2010
57
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
>
Final calibrated, validated model outputs including sensitivity tests for key parameters
June 2012
3. Salinity damage reduced ($350 million NPV assumed conservatively that 1.6 mha of agricultural land will have the onset of salinity delayed or prevented) Program 4 - Farming Saline Landscapes Output 4.1: HIGHPak – improved performance livestock and pasture management packages for saline land > Engage 1250 strong SGSL network in the problem definition and planning of proof and support sites to develop new saltland pasture /livestock technologies Test and demonstrate the next generation of saltland technologies for fine wool production, cattle backgrounding, supplementation and foetal programming (commence 2008) Output of whole farm models used to quantify profitability impact of new technologies and pathways for optimum integrating in farms with diverse salinity status. June 2014 December 2007 June 2013
>
>
December 2013 December 2013 June 2009 December 2010 December 2013 June 2014 December 2009 December 2011 June 2013 December 2010 June 2008 June 2008 June 2009
Output 4.2: New salt tolerant pasture legume and grass cultivars – from PastureSearch > > > Complete salt, waterlogging and nutritive value screening of target species (commencing 2007) Complete field testing and duty of care requirements for first commercial release Complete field testing and duty of care procedures for remaining cultivars
Output 4.3: New salt tolerant halophytic shrub cultivars – from FloraSearch > > > Develop methods for screening halophytic shrubs for nutritive value and active plant compounds and apply to germplasm under test. Elite material cloned into nurseries for further screening of palatability and productivity (commence 2009) Use seed production nurseries for prerelease testing including seed viability of potential cultivars
Output 4.4: National Saltand Service Centre - Providing a path to impact > > > Social and environmental surveys completed Stage 1 - producer supporting sites (20) established in support of subprogram proof sites applying agreed protocols Stage 2 - producer supporting sites established in support of subprogram proof sites according to the agreed protocols. Data is collated from the original 20 sites and incorporated into joint analyses of proof and supporting sites. Ten whole-farm producer case studies completed and incorporating full economic analyses.
>
June 2010
58
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
>
Data from all 40 sites incorporated into joint analyses of proof and supporting sites. Best management guidelines for optimizing production from saltland pastures and managing livestock on saltland pastures; options for improved halophytic shrubs
December 2010
Output 4.6: SALTDecide – hydrological modelling tool to measure the impact of water management using integrated plant-based and engineering interventions both on-site and off-site > Scope of model and capability established based around the need for prediction of impact of interventions (recharge prevention, drainage plant impacts) and their integrated application and application constraints. Model development and validation based on existing component data sets Model robustness evaluated for a range of regional and drivers for intervention
December 2011 June 2008
> >
June 2011 June 2013
Program 6 - Economic, Social and Policy Analysis Output 6.3: Farm business/NRM simulation game (extension of "Salty Business") > Adaptation of Salty Business/ Risky Business to include additional NRM issues December 2010 December 2008
4. Other environmental benefits (Un-priced benefits including enhanced habitat values and ecosystem services, protection of off-site biodiversity values and management of weed risk) Program 5 - Biodiversity, Water, Land and Climate Output 5.1: Management and decision packages that promote farming systems that integrate production and biodiversity outcomes > > > > Conceptual models developed that link biota and farming practices with ecological resources and related ecosystem processes. Models tested and refined through quantification of ecological resources and rates of related ecosystem processes. Completion of management and decision packages for integrating production and biodiversity outcomes. Package and its adoption evaluated. June 2014 June 2008 June 2011 June 2013 June 2014 June 2014 June 2009 June 2011 June 2013 June 2014 June 2104
Output 5.2: BioRisk – risk-based decision tool for hydrological ecosystem services > > > > Catchment modelling packages selected, and conceptual framework for ecohydrology of salinity threatened plants developed. Testing of modelled scenarios and framework completed. Completion of management and decision tools Tools refined in response to field experience
Output 5.3: CAT Plus – catchment decision tool for perennial vegetation strategies to protect water resources in water supply catchments
59
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
> > > >
Catchment modelling packages selected, and conceptual framework for ecohydrology of salinity threatened plants developed. Testing of modeled scenarios and framework completed. Completion of management and decision tools Tools refined in response to field experience.
June 2009 June 2012 June 2013 June 2014 June 2014
Output 5.4: Risk assessment products and management strategies to protect biodiversity from weeds and genetic pollution and to minimise weed control costs. > > > CRC scientists trained in application of environmental risk framework. CRC scientists trained in application of decision tools. Weed risk assessment process from previous CRC refined, and genetic risk assessment framework developed Weed and genetic risk assessments combined into a single environmental risk process. Decision tools for management of environmental risks in production systems completed. Package and its adoption evaluated.
June 2011 June 2012 June 2010
> > >
June 2011 June 2012 June 2014
5. Capacity building ($360 million NPV attributable to more effective government policy and national/regional investment programs) Program 6 - Economic, Social and Policy Analysis Output 6.2: NRM Investment Framework – decision tool for selection of priority natural resource management investments > > Complete development of NRMIF including biodiversity Complete development of NRMIF including water quality July 2013 December 2009 December 2011
Education and Training Program - Outputs and Milestones
1. Productivity growth in existing industries ($350 million NPV new perennial plant-based farming systems on 7.4 million hectares (mha) of agricultural land) Output 1.1: EverGraze Plus – More livestock from perennial$ and More livestock from native perennial$ grasses in the high rainfall zone (>500 mm) > > > > Education and training package delivered to farmers, advisors, consultants and CMAs resulting in practice change on 500 farms Site design through initial workshops with regional producer groups followed by continuous feedback via the extension network One PhD student completed within EverGraze EverGraze package delivered to at least 3000 end users through field demonstrations, technical forums and commercial partners June 2009 June 2011 June 2011 June 2011
60
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Output 1.2: Forage cultivars (chicory, Lotus or perennial Medicago) – from PastureSearch > Management package detailing cultivar management and integration into crop systems in the hands of private and public sector agronomists. June 2014 June 2011 June 2011 June 2014
Output 1.3: New acid-tolerant perennial forage cultivars – from PastureSearch > Management package, developed and delivered with commercial partner
Output 1.4: A new herbaceous forage for the warm season, summer dominant or high rainfall zone with a management and utilisation package commercially released - from PastureSearch with application in EverGraze > > Training of extension agronomists completed with the new cultivar technology package Management package and cultivar release to farmers
June 2014 June 2014 June 2014 June 2014 June 2014 December 2013 December 2012 June 2014 June 2013 June 2014
Output 1.5: Enrich – new shrub-based livestock production system for landscape and natural resource health in the low/medium rainfall zone > > One PhD student completed within Enrich Enrich package delivered to at least 3000 end users through field demonstrations, technical forums and commercial partners
Output 2.1: EverCrop Decide – new crop systems analysis tool tools that integrate production and conservation objectives > Network of extension providers and relevant CMA staff with the skills for analysing the impacts of innovative systems
Output 2.2: Drought tolerant forage legume cultivar – from PastureSearch > > Training of extension agronomists undertaken on cultivar and crop integration package Cultivars and management package delivered (Field days and 1:1 advice) to adopting producers by trained private and public sector agronomists
Output 2.3: EverCrop – new farming system in each of 3 agro-climatic zones > > Systems training conducted for all project participants ‘Demand-driven’ management packages released in format that assists longevity and flexibility beyond the program life
December 2013 June 2009 December 2013
Output 2.4: Feed grain quality salt/waterlogging-tolerant wheat > Agronomic packages developed and available for grain growers (with Program 4) December 2012
2. Profitable new regional industries ($170 million NPV new woody crops on 0.1 mha agricultural land feeding new processing industries) Output 2.5: Salt/waterlogging-tolerant wheat suitable for biofuel June 2115
61
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
>
Agronomic packages developed and available for grain growers (with Program 4)
December 2012
3. Salinity damage reduced ($350 million NPV assumed conservatively that 1.6 mha of agricultural land will have the onset of salinity delayed or prevented) Output 4.1: HIGHPak – improved performance livestock and pasture management packages for saline land > At least 1 postgraduate student completes PhD on livestock management of saline land December 2013 December 2013 June 2011
Output 4.2: New salt tolerant pasture legume and grass cultivars – from PastureSearch > Postgraduate student submits and passes thesis
Output 4.3: New salt tolerant halophytic shrub cultivars – from FloraSearch > Postgraduate student complete study of the nutritive value of saltbush June 2013 December 2010 June 2009
Output 4.4: National Saltand Service Centre - Providing a path to impact > Network staff established (6) to support participation and group activities; producer support sites, training modules and publications and field days, contributions from third parties. The results of the whole-farm case studies are utilised as the basis for producer network workshops (10) Field days and other participatory events have occurred at least a second time on each of the 40 producer support sites.
> >
June 2010 December 2010 December 2007 December 2009 June 2014 December 2011 June 2011
Output 4.5: SALTCAP – land capability assessment tool for plant-based saline land management > > SALTCAP 1- Training course developed, tested and adapted and then delivered to saltland producers SALTCAP 2- Training course developed, tested and adapted and then delivered to saltland producers
Output 4.6: SALTDecide – hydrological modelling tool to measure the impact of water management using integrated plant-based and engineering interventions both on-site and off-site > Training modules developed for target markets sectors (high value assets, protection of high value natural assets and agricultural land) and training delivered
Output 6.3: Farm business/NRM simulation game (extension of "Salty Business") > > Delivery of 10 workshops with catchment bodies, policy advisors, scientists and students Delivery of workshops with catchment bodies, policy advisors, scientists and students according to demand.
December 2010 December 2009 December 2010
62
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
4. Other environmental benefits (Un-priced benefits including enhanced habitat values and ecosystem services, protection of off-site biodiversity values and management of weed risk) Output 5.1: Management and decision packages that promote farming systems that integrate production and biodiversity outcomes > Stakeholders trained in use of packages June 2014 June 2014 June 2014
Output 5.2: BioRisk – risk-based decision tool for managing hydrology to achieve biodiversity targets and improved production. > > CRC scientists trained in application of environmental risk framework. CRC scientists trained in application of decision tools.
June 2011 June 2012 June 2014 June 2014
Output 5.3: CAT Plus – catchment decision tool for perennial vegetation strategies to protect water resources in water supply catchments > Training modules developed for use with stakeholders
Output 5.4: Risk assessment products and management strategies to protect biodiversity from weeds and genetic pollution and to minimise weed control costs. > > CRC scientists trained in application of environmental risk framework. CRC scientists trained in application of decision tools. June 2011 June 2012
5. Capacity building ($360 million NPV attributable to more effective government policy and national/regional investment programs) Output 7.1: Postgraduates – professionally trained for employment in relevant disciplines > A program of career training for higher degree students and early career science and extension professionals developed and implemented 75% participation rate by early career science and extension professionals in career training program 30 internships commissioned and completed, 75% of higher degree students, early career science and extension professionals awarded certificates in accredited training in NRM Delivery of 10 workshops with catchment bodies, policy advisors, scientists and students June 2014 June 2009
> >
June 2012 June 2014
>
December 2009 June 2014 June 2012
Output 7.2: Profitable Perennials™ accredited training program > System of accredited training programs and knowledge networks functioning effectively implemented and adapting to new FFI CRC products as they become available 75% participants in NTP accredited to minimum Certificate III in NRM, effective pathway to adoption of FFI products established through agribusiness and wider client networks Delivery of workshops with catchment bodies, policy advisors, scientists and students according to demand.
>
June 2014
>
December 2010
63
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Section 6: Planned Investment
Contributions
Summary Table
2007-08 Participants cash untied ($’000) Participants cash tied ($’000) Participants in-kind FTE staff (number) Participants in-kind FTE Value ($’000) Participants total other non-staff inkind ($’000) Other cash ($’000) CRC Programme grant($’000) Total Resources for CRC ($’000) 72 74 76 78 80 82 84 2,550 2008-09 2,500 2009-10 2,500 2010-11 2,500 2011-12 2,500 2012-13 2,500 2013-14 2,500 Total 17,550
110
110
110
110
110
110
110
770
78.70
78.50
78.60
78.50
78.20
78.30
77.40
548.20
58,695
546
500 4,000
700 5,200
250 5,200
250 5,200 5,200 5,200 4,125
1,700 34,125
113,386
64
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Participant Contributions
Participant Australian Wool Innovation Ltd Charles Sturt University Commonwealth Scientific and Industrial Research Organisation Department of Agriculture and Food, Western Australia Department of Environment and Conservation Department of Primary Industries and Resources South Australia Department of Primary Industries Victoria Department of Water, Land and Biodiversity Conservation Enecon Pty Ltd Forest Products Commission Grains Research and Development Corporation Kondinin Group Landmark Operations Limited Meat and Livestock Australia North Central Catchment Management Authority NSW Department of Natural Resources NSW Department of Primary Industries Oil Mallee Company of In-kind staff FTE 3.50 21.35 68.25 In-kind staff value (‘000) 333 2,529 7,663 In-kind nonstaff value ('000) Cash ($’000) 3,500 350 Total (‘000) 3,833 2,879 7,663
59.50
6,965
350
7,315
31.50
3,570
1,050
4,620
28.15
2,989
350
3,339
91.70
9,380
9,380
21.00 0.70 2.10
2,153 88 263
350
2,503 88 263
3.50 0.70 42.00 3.50
333 88 4,011 333
5,250
5,583 88
350 5,250
4,361 5,583
1.40
133
50
183
15.40 79.95 1.40
1,463 8,124 133
1,463 8,124 133
65
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Australia Ltd Renewable Oil Corporation Pty Ltd The University of Adelaide The University of Melbourne The University of Western Australia Totals: 0.70 15.40 28.00 28.40 548.10 88 1,757 2,975 3,327 58,695 546 546 350 420 700 18,320 88 2,107 3,395 4,573 77,564
66
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Key Personnel Contributions
Key person AVERY, Angela BARRETTLENNARD, Edward BARTLE, John Funded by In-Kind Role Key Researcher Academic Time classification Commitment Participant name 60 Department of Primary Industries Victoria Department of Agriculture and Food, Western Australia Department of Environment and Conservation Department of Water, Land and Biodiversity Conservation Department of Primary Industries Victoria Department of Environment and Conservation Landmark Operations Limited The University of Western Australia Department of Primary Industries and Resources South Australia NSW Department of Primary Industries Department of Primary Industries and Resources South Australia Department of Agriculture and Food, Western Australia
In-Kind
Key Researcher
Dr
60
In-Kind
Programme Leader
80
BENNELL, Michael
In-Kind
Key Researcher
50
BEVERLY, Craig BYRNE, Margaret
In-Kind
Key Researcher
Dr
65
In-Kind
Key Researcher
Dr
30
CAIRNS, Bruce In-Kind
Key Staff in Commercialisation /Utilisation Key Researcher Key Researcher Dr Dr
10
COLMER, Tim CRAIG, Andrew
In-Kind In-Kind
40 50
DEAR, Brian
In-Kind
Key Researcher
Dr
40
EDWARDS, Nick
In-Kind
Key Researcher
Dr
25
EWING, Mike
In-Kind
Programme Leader Associate Professor
100
67
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
FREUDENBERG In-Kind ER, David
Key Researcher
Dr
30
Commonwealth Scientific and Industrial Research Organisation Department of Agriculture and Food, Western Australia Charles Sturt University
GEORGE, Richard
In-Kind
Programme Leader Dr
80
GLYDE, Scott GOSS, Kevin HAMILTON, Greg
In-Kind Cash In-Kind
Programme Leader Proposed CEO Key Researcher
60 100 40
Department of Agriculture and Food, Western Australia Department of Environment and Conservation
HARPER, Richard INGLIS, Andrew
In-Kind
Key Researcher
Dr
30
Cash
Proposed Chair Key Researcher Dr
100 30 Commonwealth Scientific and Industrial Research Organisation Commonwealth Scientific and Industrial Research Organisation NSW Department of Primary Industries Commonwealth Scientific and Industrial Research Organisation Department of Agriculture and Food, Western Australia Department of Agriculture and Food, Western Australia The University of Western Australia
LARKIN, Philip In-Kind
LLEWELLYN, Rick
In-Kind
Key Researcher
Dr
60
LODGE, Greg
In-Kind
Key Researcher
Dr
40
MASTERS, David
In-Kind
Programme Leader Dr
60
MICHAEL, Francki
In-Kind
Key Researcher
Dr
30
NICHOLS, Phillip
In-Kind
Key Researcher
Dr
30
PANNELL, David
In-Kind
Programme Leader Professor
70
68
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
POWELL, John Cash
Programme Leader in Commercialisation /Utilisation Key Researcher Key Researcher Professor Dr
100
RENGEL, Zed REVELL, Dean
In-Kind In-Kind
30 60
The University of Western Australia Commonwealth Scientific and Industrial Research Organisation
RICHARDSON, Cash Daryll RIDLEY, Anna In-Kind
Key Staff in Commercialisation /Utilisation Programme Leader Dr
100
60
Department of Primary Industries Victoria Commonwealth Scientific and Industrial Research Organisation Kondinin Group
ROBERTSON, Michael
In-Kind
Key Researcher
Dr
50
RYAN, William In-Kind
Key Staff in Dr Commercialisation /Utilisation Key Researcher
10
SANFORD, Paul
In-Kind
70
Department of Agriculture and Food, Western Australia NSW Department of Primary Industries
SLINGER, Deb
In-Kind
Key Researcher
40
STICKELLS, Mark THOMPSON, Andrew VERCOE, Phil
Cash
Key Staff in Commercialisation /Utilisation Key Researcher Dr
100
In-Kind
50
Department of Primary Industries Victoria The University of Western Australia Commonwealth Scientific and Industrial Research Organisation Department of Environment and Conservation
In-Kind
Key Researcher Key Researcher
Dr Dr
20 20
WALKER, Glen In-Kind
WALLACE, Ken In-Kind
Programme Leader
50
69
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Planned Allocations
Breakdown of Budget ($’000)
07-08 Income - CRC Program Income - Other 4,000 3,160 7,160 08-09 5,200 3,310 8,510 09-10 5,200 2,860 8,060 10-11 5,200 2,860 8,060 11-12 5,200 2,610 7,810 12-13 5,200 2,610 7,810 13-14 4,125 2,610 6,735
Total
34,125 20,020 54,145
Planned Expenditure
Research Programs Program 1 - Livestock Program 2 - Crops Program 3 - Woody Industries Program 4 - Saline Program 5 - Biodiversity Program 6 - Economics Program 7 - Education & Training 1,547 785 1,710 1,005 1,560 1,035 1,560 1,035 1,635 1,035 1,690 1,085 1,710 990 11,412 6,970
%
21.1 12.9
405 615 540 340
480 562 540 365
455 612 490 340
380 605 490 290
405 655 615 290
505 705 665 362
455 705 400 247
3,085 4,460 3,740 2,235
5.7 8.2 6.9 4.1
587
1,237
1,725
1,482
912
345
145
6,435
11.9
Commercialisation Management and Governance Communications
772
800
822
822
822
822
822
5,685
10.5
1,042 625 7,260
742 625 8,067
842 625 8,507
742 625 8,032
742 625 7,737
842 625 7,647
792 625 6,892
5,747 4,375 54,145
10.6 8.1
70
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Program shares
Program Cash resources Inkind FTE Inkind $ resources Total Resources Key Industry Investors Future Livestock Production $5.67m – FFI CRC investors $5.7m – CRC Program 23 FTE per annum $16.34m $27.8m MLA $3.675m AWI $1.4m 27.8% of total 24.5% of total Notes
Program Cash resources Inkind FTE Inkind $ resources Total Resources Key Industry Investors
Future Cropping Systems $3.395m – FFI CRC investors $3.575m – CRC Program 12.8 FTE per annum $10.1m $17.1m GRDC - $3.15m
Notes
17.2% of total 15.1% of total
Program Cash resources Inkind FTE Inkind $ resources Total Resources Key Industry Investors
New Woody Crops and Products $1.085m – FFI CRC investors $2m – CRC Program 6.9 FTE per annum $5.4m $8.5m GRDC - $0.525m DEC WA - $0.525m
Notes
9.3% of total 7.5% of total
Program Cash resources Inkind FTE Inkind $ resources Total Resources Key Industry Investors
Farming Saline Landscapes $3.185m – FFI CRC investors 1.275m – CRC Program 9.3 FTE per annum $7.4 $11.8m AWI $1.4m MLA $0.525m GRDC - $0.525m
Notes
12.6% of total 10.4% of total
71
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Program Cash resources Inkind FTE Inkind $ resources Total Resources Key Industry Investors
Biodiversity, Water, Land and Climate $0.98m – FFI CRC investors 2.76m – CRC Program 8 FTE per annum $6.1m $9.8m MLA $0.525m DEC WA $0.42m
Notes
10.4% of total 8.7% of total
Program Cash resources Inkind FTE Inkind $ resources Total Resources Key Industry Investors
Economic, Social and Policy Analysis $0.28m – FFI CRC investors 1.95m – CRC Program 5.6 FTE per annum $4.5m $6.7m
Notes
7.7% of total 5.9% of total
Program Cash resources Inkind FTE Inkind $ resources Total Resources Key Industry Investors
Education and Training $1.085m – FFI CRC investors 5.45m – CRC Program $5 FTE per annum $2.8m $9.3m Landmark - $1.137m cash and inkind
Notes
4.8% of total 8.2% of total
Program Cash resources Inkind FTE Inkind $ resources Total Resources Key Industry Investors
Commercialisation and Utilisation $4.09m – FFI CRC investors 1.5m – CRC Program 10 FTE per annum $5.88m $11.5m AWI $1.03m cash and inkind LA $0.857m cash and inkind GRDC - $1.382m cash and inkind Landmark - $3.2m cash and inkind
Notes
10% of total 10.1% of total
72
FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14
Program Cash resources Inkind FTE Inkind $ resources Total Resources Key Industry Investors
Governance, Management and Communications $0.25m – FFI CRC investors $9.8m – CRC Program 2.5 FTE per annum $0.66m $10.8m
Notes
9.5% of total
Summary
Program Cash resources Summary across all activities $20.02m – FFI CRC investors $34.125m – CRC Program Notes Cash currently 37% FFI, 63% CRC Program – business growth strategy targeting $11.6m over 7 years to approach matching cash investment 548.1 over 7yrs CRC Program values CRC Program 30% of resources at start up Minimum commitment from RDCs at start-up UWA contribution cash and inkind for hosting CRC
Inkind FTE Inkind $ resources Total Resources Key Industry and other investors
78.3 per annum $59.2m $113.4m MLA - $5.25m GRDC - $5.25m AWI - $3.5m DEC WA - $1.05m UWA - $0.7m plus accommodation WA State Govt - $1.7m
Grant for WA based CRC
73