Productivity Commission review of Australia’s rural Research and Development Corporations

ATSE considers that the rural RDCs are a critical element of Australia’s innovation system. The engagement which they provide between primary producers, government, industry and researchers ensures that the specific R&D needs of our rural sector are met in a way that appropriately shares costs. At a time when Australia’s research workforce is ageing, State Governments have cut back their investment, and world food shortages are projected, Australia’s rural RDCs can enable Australia to largely feed our own growing population while also contributing the needs of others.

Australia’s RDC model is internationally regarded as best practice in undertaking and delivering rural sector R&D. One reason for this is the way it addresses the free rider issue among primary producers. There is plenty of evidence to demonstrate good returns on RDC investment and the spillovers from this investment benefit all Australians. There is, however, a case for extending contribution arrangements to downstream beneficiaries of RDC R&D.

The present cap on Government contributions – 0.5 per cent of Gross Value of Production (GVP) unnecessarily limits rural R&D and should be removed. As a step in that direction, ATSE suggests that the Government provides one dollar for every two levy dollars between 0.5 and 1 per cent of GVP.

ATSE sees strength in the diversity of our RDCs. It is also important that they work together when facing common challenges. There may also be scope for some rationalisation between RDCs. However these matters are for the industry and the RDCs to address. To the extent that the Government believes it needs to influence the behaviour, structure and governance of RDCs it can do so through the provisions of the funding agreements.