AGRICULTURAL stakeholders have expressed bewilderment at this year’s federal budget cutting $9.5 million from the Rural R&D for Profit program, to fund water infrastructure feasibility studies.
The R&D program was a cornerstone of the Coalition’s 2013 election policy that was implemented in government and originally announced as a $100m spend in the 2014-15 budget.
It aims to deliver strategic funding to Rural Research and Development Corporations (RDCs) to improve commercial research outcomes that can bolster farm gate returns.
The government allocated $20m in the first year of the program to be followed by $30m in 2016-17 and 20m in 2017-18.
The first round allocated $26.7m towards 12 R&D projects like improved irrigation practices on cotton, rice, sugar and dairy farms, enhanced biosecurity control measures for the horticulture sector and better weed control.
The government’s contribution was matched by about $18m from research partners like the RDCs and universities with another $14m provided via in-kind contributions.
The Coalition’s Agricultural Competitiveness White Paper also extended the program another four financial years by promising an additional $100m, taking the total to $200m out to June 2022.
But stakeholders who are already nervous about protracted delays in delivering round two of the R&D program, which closed for applications on December 1, last year, have been left scratching their heads at the 2016-17 budget papers redirecting $9.5m to the National Water Infrastructure Development Fund.
The budget papers said the new measure would help the government respond to strong demand, by funding additional water infrastructure feasibility studies in northern Australia.
Council of Rural Research and Development Corporations Chair Clark expressed surprise at the budget’s reprioritisation of funds in the Rural R&D for Profit program but said overall arrangements had been maintained for the partnership approach that underpins the RDC system.
He said the budget papers showed that payments through to the Rural RDCs would remain stable, if not grow slightly in coming years, except for MLA as reduced cattle sales would hit levy receipts hard in 2016-17.
“What has come as a surprise is the reallocation of $9.5 million of funding from the Rural R&D for Profit Program for the National Water Infrastructure Fund,” he said.
“The change means that the allocation for Rural R&D for Profit will be $20m rather than $30m in 2016-17.
“But it is important to note the government’s commitment to rural R&D has been reinforced in this budget and the matching funding of grower levies continues to support innovation in the rapidly changing agricultural sector.”
The budget papers showed that cash receipts for agricultural levies in 2015-16 was $514m representing an increase of $39m (8.2pc) on the mid-year forecast and $494m was estimated for this year’s outlook.
MLA’s estimated actual revenue for 2015-16 was listed as $195m while the budget estimated it would be $162.5m for 2016-17.
The papers also showed that the Grains Research and Development Corporation had $2335m in cash reserves this year which was estimated to be just over $200m in 2016-17.
This year’s budget also revealed changes to various agricultural levies and export charges including introducing a mandatory levy of $0.50 per tonne on all hay and straw prepared for export, on July 1.
“The government will provide a matching contribution of $400,000 per annum, consistent with its commitment in the Agricultural Competitiveness White Paper,” the budget papers said.
“This new mandatory levy replaces a voluntary levy and was proposed by the export fodder industry – to address gaps in fodder industry research, development and extension funding.”
On July 1, the government will cease the excise levy on domestic production and sale of deer velvet, the customs charge on exports of deer velvet, and the customs charge on exports of live deer, as proposed by the Deer Industry Association of Australia.
The government will increase the citrus levy by $1.50 per tonne on the same date, at industry’s request, to address gaps in citrus industry research and development funding.
The statutory levy and export charge for research and development will increase from $1.97 per tonne to $3.20 per tonne and the Plant Health Australia levy rate will climb from $0.03 per tonne to $0.30 per tonne.