ANNUAL OPERATIONAL PLAN

Transcription

1 ANNUAL OPERATIONAL PLAN grdc.com.au

2 Contents Contents... 0 Preface... 0 About the GRDC... 1 Representative Organisations... 1 Strategic investment framework... 2 Purpose... 2 Outcome... 2 Investment Themes and Priorities Income and expenditure... 5 Income... 5 Reserves... 6 Expenditure... 7 GRDC investment cycle R,D&E Investment priorities... 9 Performance and measurement Investment priority highlights Appendix A Science and Research Priorities and the Rural RD&E priorities... 20

3 Preface The GRDC has a purpose of investing in research, development and extension to create enduring profitability for Australian grain growers. Deilvery of the purpose requires a fundamental understanding of the drivers of grower profitability and the alignment of all aspects of the GRDC s business with grower needs to positively impact the identified profit drivers. The GRDC has recognises the need for substantial changes to its internal structure, systems and processes to underpin this strategic intent. In particular, structural changes enacted in the last 18 months have focussed on further strengthening GRDC s regional presence and on ensuring that the right capabilities and resources are directed to the right places to respond to the changing needs of growers is a year of transition for the GRDC as it recruits new capacity and capability, oversees the completion of the Strategic R&D Plan and develops a new five year R&D plan for the period Development of the Plan has already commenced to ensure that the GRDC investment portfolio is informed by changing grower needs, significant changes in the international and Australian grains industries and with a focus on delivery of GRDC s purpose. The grains industry is changing rapidly, with factors such as advances in technology, climate volatility, globalisation and shifts in consumer tastes contributing to the demands and challenges faced by Australian grain growers. To respond effectively to these changes, the GRDC investment portfolio needs to be balanced risk and reward.across activities that deliver growers lower risk incremental gains, slightly higher risk step-change innovations, and even higher risk transformational changes During GRDC, will continue to deliver investments against the outcomes from the Strategic R&D Plan and its six investment themes; meeting market requirements, improving crop yield, protecting your crop, profitable farming systems, improving your farm resource base and building skills and capacity. The transition of these themes to investment priorities in the Plan that is currently being developed is articulated in more detail in this Annual Operational Plan.

4 About the GRDC The Grains Research and Development Corporation (GRDC) is a corporate Commonwealth entity established in 1991 to plan and invest in research, development and extension (RD&E) for the Australian grains industry. The GRDC invests in the order of $200 million annually in RD&E projects to deliver new and improved varieties, farming practices, technologies, and capability to the Australian grains industry. These investments drive the discovery, development and delivery of world-class innovation. The GRDC is led by its Board of Directors and managed through the office of the Managing Director and Executive Committee. Regional Panels and National Panel provide guidance and input to the investment portfolio. Representative Organisations The GRDC s representative orgnisations in are GrainGrowers Limited and Grain Producers Australia. The role of the Respresentative Organisations includes: Consultation on the development of five-year strategic RD&E Plans Meet with the GRDC to consider and discuss the Annual Report Other R&D related activities that may vary from year to year Page 1

5 Strategic investment framework Purpose Invest in RD&E to create enduring profit for Australian grain growers. Outcome In line with GRDC s purpose, investments are tailored to deliver enduring profitability by increasing yields or prices and/or decreasing costs. By enhancing enduring profitability, GRDC believes that other outcomes of environmental sustainability and benefit to the industry and wider community will also be achieved. Investment Themes and Priorities GRDC investment themes align with purpose as well as Government and industry objectives as shown in the table below. Investment priorities cover incremental through to transformational improvements in profitability drivers. Individual investments provide a balanced mixture of all is required to of discovery of new opportunities to improve profit AND to maximise adoption. Without adoption, the full impact of R&D innovation on profitability will be limited. In delivering a balanced portfolio, the GRDC considers: short, medium and longer term investments that address industry prioritities as well as government research and innovation priorities research needs across all cropping systems and grain, legume and oilseed crops spread of investment benefits across all of Australia s grain growing regions increasing capacity and capability in growers, their advisors and Australian research partners gaps in the existing research portfolio balancing incremental, step change and transformational investments In the GRDC investment portfolio is structured against the following priorities: Predominately Transformational and Step-Change Investments New Traits: Identification of genetic traits that provide improvements in profit by increasing yield, changing quality to increase price or decreasing input costs. New Varieties: The combination of new traits with plant breeding to deliver new high performing varieties. New Actives: Identification and registration of new chemistries particularly for weed, pest and disease control to decrease costs and increase yield. New tools: New engineering and robotic solutions focussed mostly on decreasing costs. Page 2

6 Predominately Step-Change and Incremental Investments Agronomy: The management of in-crop production of cereal, oilseeds or pulse crops Farming Systems: The interaction of plant, water, environment and soil across a crop sequence Soils: Soil characterisation, constraint address and understanding soil biological processes Nutrition: The availability, uptake and interaction of nutrients with plants and soil Pests: The knowledge and management of pests. Diseases: The knowledge and management of pathogens Weeds: The knowledge and management of weeds Information and Research Support: Development and analysis of data to inform investment decisions and provision of key support (statistics, modelling etc.) for R,D&E projects. Predominately Incremental Investments Local Development: Taking results and principles from the R&D activities outlined above and testing them in local farming system and environments. Extension: Systematic and participatory activities with growers and advisers that are generally face to face with a planned learning outcome to maximise the adoption of innovation from R&D investments. Communication: Activities that are either non-systematic or non-participatory in nature but still aimed at raising awareness to maximise adoption of innovation from R&D investments. Capacity Building: Grower and agronomist professional development activities with a planned learning outcome to maximise adoption of innovation from R&D investments and improve farm business performance. Page 3

7 The following table demonstrates how the objectives of the Primary Industries Research and Development Act 1989 and the Australian Government research priorities informs the structure GRDC research programs and priorities. GOVERNMENT AND INDUSTRY OBJECTIVES Australian Government Priorities Primary Industries Research and Development Act 1989 Increased economic, environmental and social benefits to members of primary industries and to the community in general by improving the production, processing, storage, transport or marketing of grain. Sustainable use and management of natural resources. More effective use of the resources and skills of the community in general and the scientific community in particular. Development of scientific and technical capacity. Development of the adoptive capacity of grain growers. Improved accountability for expenditure on R&D activities. National Research Priorities Food Soil and water Transport Cybersecurity Energy Resources Advanced manufacturing Environmental change Health Rural RD& E Priorities Advanced technology Biosecurity Soil, water and managing natural resources Adoption of R&D Industry Priorities Grains Industry Industry Priorities National Research, Development and Extension Strategy 2014 Better Meeting market varieties to lift requirements productivity and Improving crop yield value Protecting your crop Improved Advancing profitable practices to farming systems enhance productivity and Improving your farm sustainability resource base Supply chain Building skills and innovation and capacity market competitiveness Building farm business and industry capability GRDC PURPOSE Invest in RD&E to create enduring profit for Australian grain growers GRDC INVESTMENT THEMES 1. Meeting Market Requirements 2. Improving Crop Yield 3. Protecting your Crop 4. Advancing Profitable Farming Systems 5. Improving the Farm Resource Base 6. Building Skills and Capacity GRDC INVESTMENT New traits Agronomy Validation PRIORITIES New actives Farming system Extension New varieties New technologies Weeds Pests Communication Capacity building Diseases Soil Nutrition Information and research support INVESTMENT TYPE Transformational Step-Change Incremental Page 4

8 Income and expenditure The GRDC s total income in is forecast to be $202.0 million. For , the GRDC Board has approved an annual operating expenditure of $215.9 million. The GRDC is therefore estimating an operating loss of $13.9 million in This loss is in line with approvals received from Government and will be funded from GRDC s accumulated financial reserves. However, it is important to note that GRDC income can be highly variable due the volatile nature of levy contributions as growers are impacted by seasonal and market effects. As such, GRDC maintains active management of its investment expenditure to meet Government deficit approvals. Income Forecast total income GRDC forecast income consists of: Australian Government contributions of $68.5 million levy contributions from grain growers of $114.7 million grants totalling $3.1 million other income, including interest and royalties, of $15.7 million The figure below shows the sources of the GRDC s forecast levy income for , in percentage terms, by leviable crop. The forecast is based on several assumptions, including: Quantity of grain produced: 24.0 million tonnes (mt) of wheat, 8.5 mt of barley, 3.7 mt of canola, 1.9 mt of sorghum, 1.2 mt of oats and 2.35 mt of pulses. Page 5

9 Grain prices per tonne: $277 for wheat (Australian Premium White), $185 for feed barley, $234 for malting barley, $532 for canola, $221 for sorghum,$230 for oats, $630 for lentils, $870 for chickpeas, $200 for Faba beans, $320 for field peas and $224 for lupins. Levy rates: 0.99 percent of farm gate value for 24 grains and percent of farm gate value for maize. Forecast levy income The GRDC considered the following three income scenarios for : Scenario 1 is the baseline case assuming income of $202 million and expenditure of $215.9 million. Under this scenario, liquid reserves at the end of would be $163.1 million. Scenario 2 projects a pessimistic case. 50% lower crop production volumes are assumed for this scenario, while prices for the major crops are assumed to remain as in the baseline scenario. Such a scenario may eventuate if other major producer countries have very good harvests while Australia has a poor harvest or severe weather events impact the growing season. Under this scenario, projected income for would be $149.8 million. andliquid reserves at the end of would decrease to $110.9 million. Forecast expenditure utilising reserves would be manageable under such a low production scenario but would require approval of a greater deficit by Government. Scenario 3 projects an optimistic case. The optimistic scenario assumes crop production levels as in the baseline scenario but prices similar to the record high prices of Under this scenario, projected income for the year would be $246.9 million. Liquid reserves at the end of would increase to $207.9 million. Reserves The GRDC s revenue depends on grain production levels, prices and growers marketing intentions, all of which can be highly variable. To reduce the impact of fluctuations in these variables on the industry s RD&E investment portfolio, and safeguard its ongoing RD&E investment, the GRDC manages significant financial reserves. The reserves are accumulated in years of high-value production and drawn on in years when revenue is lower. Easily recognised (current) assets form liquid reserves. Page 6

10 The GRDC aims to maintain the reserves at a level between 40 percent and 70 percent of the following year s expenditure. Currently, reserves held are above the upper bound of the target range largely as a result of the sharp increase in volume of production and higher than expected prices in previous years. Careful management of the reserves has placed the GRDC in a strong position to increase RD&E expenditure above the projected income for Therefore, the GRDC is budgeting for an operating deficit of $13.9 million for , to be funded from the reserves. Expenditure The GRDC Board has approved an annual expenditure of $215.9 million in The table below summarises the GRDC s estimates of expenditure for. These figures are indicative only as changes in the GRDC s operating environment, especially changes to forecast income, may require the corporation to vary total expenditure or specific allocations to secure its financial objectives and meet GRDC s purpose. Estimates of expenditure $m $m % RD&E budget allocation % Management Employees a % Suppliers b % Management budget allocation % Total operating expenditure % a B Employee costs include remuneration of directors and committee members. Supplier costs include depreciation, amortisation and levy collection/management expenditure. In previous years some R&D expenses have been included in the Management budget. From approximately 67% of management expenses will be assigned to RD&E based on the allocation of management costs that are directly associated with the delivery of R&D investments. Purely administrative management costs will remain within the management budget. Page 7

11 GRDC investment cycle The financial year will see the GRDC move away from a single annual call for investments to one of continuous investment assessment and calls throughout the year. This will provide the GRDC with the agility to quickly deliver solutions when and where they are needed and in the form that best meets grower needs, while maintaining a pipeline of investments to ensure Australia is at the forefront of future innovation. The GRDC will invest in ideas throughout the year, considering investments as part of ongoing scheduled Panel meetings and integrated into the usual GRDC business activities. Project contracts will be developed to measure success against milestones stages and successfully completed milestones will attract progress payments. Page 8

12 R,D&E Investment priorities This table provides information on investment priorities and how they align with the research Themes in the Strategic R&D Plan Themes Investment priorities KPIs targets Intermediate Outcomes Forecast expenditure Meeting market requirements Information and research support Extension and Communication Australian Export Grains Innovation Centre (AEGIC) joint venture is established and operating appropriately. Growers are interested in the benefits of measuring grain quality to meet customer requirements. Required market information available 90% Understanding market opportunities for Australian grain Crop production aligned with market requirements Grain harvest and storage practices aligned with market requirements $10.6m Growers storing grain on farm use sealed silos to meet market requirements and provide for the continued effectiveness of pest control measures 70% Improving crop yield New traits New varieties New technologies New cereal, pulse and oilseed varieties have minimum increases in genetic yield potential per annum as measured in National Variety Trials (NVT). New varieties currently available meet the expectations of growers. Cereals 1% Pulses 2% Oilseeds 1.5% 60% 40% access data, of which 90% consider helpful. Genetic yield potential and stability improvement of cereal varieties Genetic yield potential and stability improvement of pulse varieties Genetic yield potential and stability improvement of oilseed varieties $46.6m Growers and advisers use NVT data in selection of varieties to plant. Protecting your crop Weeds Pests Diseases Growers and advisers are aware of and use integrated weed, pest or disease management practices. Growers undertake onfarm practices to maintain or improve their biosecurity. 70% aware/50% use 50% Effective, sustainable and efficient management of weeds Effective, sustainable and efficient management of vertebrate and invertebrate pests Effective, sustainable and efficient management of cereal rusts Effective, sustainable and efficient management of cereal (non-rust), pulse and oilseed fungal pathogens Effective, sustainable and efficient management of nematodes Effective, sustainable and efficient management of viruses and bacteria $63.4m Page 9

13 Themes Investment priorities KPIs targets Intermediate Outcomes Forecast expenditure Biosecurity and pesticide stewardship Advancing profitable farming systems Agronomy Farming system Soil Nutrition Growers place a high importance on the use of decision tools to assist them with strategic or tactical decision making. Growers have a wholefarm business plan which takes account of strategic opportunities, constraints and risks. 70% 25% Knowing what is important (key business drivers) Planning strategically (building system benefits and rotations) Responding tactically (individual crop agronomy) $46.4m Improving your farm resource base Agronomy Farming system Soil Nutrition Growers consider the potential effects of climate change on their farm business when making long-term decisions. Growers undertake activities to improve the condition and productive capacity of their soils. Growers use nutrient budgeting to better match application with anticipated crop needs. 65% 70% 65% Understanding and adapting to climate variability Improving soil health Managing water use on dryland and irrigated grain farms Understanding and valuing biodiversity Communication of sustainable production methods $12.9m Building skills and capacity Validation Extension Communication Capacity building Infrastructure grants Each year Nuffield scholars include people from the grains industry. Growers and advisers undertake at least one activity each year to learn more about opportunities to improve farm profit or sustainability. At least three 75% Grains industry leadership and communication Capacity building in the extension sector Capacity building in the R&D sector Capacity building for grain growers $9.1m The GRDC s forecast investment in research for is $189 million. Performance and measurement In addition to measuring the GRDC s strategic Investment Themes and priorities, work has commenced on developing key performance information to measure the GRDC s purpose of Invest in RD&E to create enduring profitability for Australian grain growers. Our aim is to measure profitability through changes in gross margin and whole farm profit over time. This neccessitates the active collection of farm performance data, not only to measure impact of GRDC current and past investments but to also understand profitability gaps that could be addressed by future investment. The GRDC s investment in it s enabling systems is facilitating the ability to capture and interrogate data relating to it s investment portfolio and the return on investment to Australian grain growers. The GRDC will be monitoring the development of performance information through regular reports on and measurement against key performance indicators as outlined in the table above. Page 10

14 Investment priority highlights Theme 1 Meeting market requirements Through this theme, the GRDC interacts closely with participants in the Australian grains value chain to better understand market requirements, particularly for quality and functionality, to enable growers to maintain or increase access to current markets and secure access to new higher valued markets. Australia s domestic and international customers seek a consistent supply of grain that is: a quality product compliant with statutory and customer-specific requirements a functional product that performs reliably for the desired end use. To deliver highest value to growers, the GRDC must understand the requirements and the dynamics of current domestic and export markets for feed and food grains, and those of likely future markets. Aspirational outcome (10+ years) Australian grain growers maintain and increase access to current and future grain markets by aligning variety selection and on-farm production practices with quality and functionality requirements. Intermediate outcomes (5 years) Understanding market opportunities for Australian grain Acquisition and interpretation of information about market requirements, trends and opportunities to support informed RD&E investment decisions and to assist grower decisions. Crop and variety selection aligned with market requirements Growers use market information to select crop, variety and cropping sequence that addresses their profit and risk. Crop production aligned with market requirements Growers use information on appropriate in-crop management to maximise the potential of delivering grain that meets the quality and functionality requirements of the intended customer. Grain harvest and storage practices aligned with market requirements Growers adopt harvest and storage practices to maximise their potential to deliver grain that meets the quality and functionality requirements of the target market indicative budget - $10.6 million Investment highlights The GRDC will continue ongoing discussion and negotiation with the entire grains supply chain through the Australian Grains Industry Discussion Group to develop an industry plan that identifies required industry good activities and appropriate funding mechanisms. The focus of the plan will be on: Working with the Australian Export Grains Innovation Centre to facilitate ongoing interaction with the entire supply chain to understand and support current, developing and future markets. Working with grain traders, breeders, growers and the wider industry to ensure that Wheat Quality Australia is sustainably funded to provide required continuing classification services. Providing ongoing, and potentially increased, support for the Grains Industry Market Access Forum that supports ongoing access of Australian grains to current markets. Page 11

15 Theme 2 Improving crop yield This theme focuses on the delivery of new crop varieties with demonstrable improvements in genetic yield potential and yield stability. Given the wide range of farming environments and crop choice, targets will be crop specific and region specific. The WLYP of a variety is the maximum yield attainable when the variety is grown under average, rain-fed conditions without the limiting impacts of nutrient deficiency, soil toxicity, weed competition, insect damage and disease. Although the actual yield that is captured on farm depends on a grower s ability to manage the biotic and abiotic factors that contribute to yield losses (and the cost limitations of management practices), WLYP is genetically determined. Plant breeders aim to continually improve the WLYP of crops through new varieties although, for many crops, continued improvements in genetic yield potential and stability are becoming harder to realise. Aspirational outcome (10+ years) Cereal, pulse and oilseed varieties with significant, sustained and stable improvements in water- limited yield potential over current elite varieties in key agroecological zones and across a range of seasons. Intermediate outcomes (5 years) Genetic yield potential and stability improvement of cereal varieties Growers access and increase production of adapted cereal varieties with a significant yield potential and stability increase over current elite varieties. Genetic yield potential and stability improvement of pulse varieties Growers access and increase production of adapted pulse varieties with a significant yield potential and stability increase over current elite varieties. Genetic yield potential and stability improvement of oilseed varieties Growers access and increase production of adapted oilseed varieties which continue to meet target oil levels with a significant yield potential and stability increase over current elite varieties indicative budget - $46.6 million Investment highlights The 10 Genome Wheat Sequencing Consortium Until recently, the combination of size of wheat genome (17 Gb), high degree of sequence similarity between homoeologous genomes (95 99% coding sequences), and large proportion of repetitive DNA (> 80%) had hampered efforts to create a draft sequence of the wheat genome. The advent of Next Generation Sequencing technologies (NGS) however, has enabled new approaches to tackle sequencing of the wheat genome resulting in the availability of a reference wheat genome resource in an old variety called Chinese Spring. However, Chinese Spring is a relatively poor reference for current Australian wheat germplasm limiting the capacity to capture important genetic information of Australian wheat breeding germplasm. The sequencing of appropriate Australian wheat cultivars is a critical foundational resource for Australian wheat genetic improvement. GRDC will invest in the sequencing of two Australian wheat cultivars as part of an International consortium seeking to sequence ten wheat genomes. The benefits of formal Australian involvement in the consortium are: 1. Priority GRDC access to a minimum of 10 wheat genomes (diverse cultivars) generated within the consortium 2. Financial leverage of 5:1 for each GRDC dollar invested 3. Access to world-leading bioinformatics capacity within the Consortium including breeder-deployable tools for use of sequence resources Future Vetch Breeding for Grain and Hay The Australian National Vetch Breeding Program aims to deliver improvements in profitability and reliability of the Australian farming system by improving vetch varieties enabling production to spread into new growing areas. The aim is to provide farmers with a reliable and consistent legume option that fits into the modern farming rotation. Page 12

16 In previous vetch breeding projects, a range of common vetch varieties with improved adaptation to low and mid rainfall environments (Morava, Rasina, Volga and Timok) were released to growers, as well as a woolly pod vetch variety, RM4. The vetch breeding program has worked closely with a range of specialists including agronomists, pathologists, marketers, international institutions and other stakeholders. Collaboration with institutes in Serbia, US, Japan and Korea have sought germplasm with cold tolerance and botrytis resistance. The vetch breeding program continues to make progress in pyramiding traits that increase yield potential and reliability, disease resistance, tolerance to abiotic stresses; drought, salinity, frost and high temperatures during the reproductive phase of plant development aiming to improve general adaptation to more marginal climates for vetch production across Mallee cropping zones in Australia. Page 13

17 Theme 3 Protecting your crop This theme develops the cultural, chemical and genetic options available to manage key pests, weeds and diseases in each region. Management options need to take into account cost-effectiveness, resilience of control strategies and flexibility to fit different farming systems. Existing control measures for pests, weeds and diseases require ongoing review in light of: potential and actual incursions of exotic pests changes in regulation of pesticide use and access the need to reduce the cost and increase the speed of delivery of resistant and tolerant varieties manage herbicide and pesticide resistance provide ongoing stewardship of gene technology and pesticide products to support long-term access Aspirational outcome (10+ years) Australian grain growers managing their farms to maximise profit and reduce risk by adopting effective, sustainable and efficient control of weeds, pests and diseases. Intermediate outcomes (5 years) Effective, sustainable and efficient management of weeds Growers use a combination of new genetic, biological, cultural and chemical weed management tools to reduce crop losses and minimise control costs. Effective, sustainable and efficient management of vertebrate and invertebrate pests Growers use a combination of new genetic, biological, cultural and chemical tools to reduce crop losses and minimise control costs of vertebrate and invertebrate pests. Effective, sustainable and efficient management of cereal rusts Growers use a combination of new genetic, cultural and fungicide management tools to reduce crop losses and minimise control costs of cereal rusts. Effective, sustainable and efficient management of cereal (non-rust), pulse and oilseed fungal pathogens Growers use a combination of new genetic, cultural and fungicide management tools to control cereal (non-rust), pulse and oilseed root and foliar fungal diseases. Effective, sustainable and efficient management of nematodes New genetic, biological and cultural management tools for the control of nematodes are delivered. Effective, sustainable and efficient management of viruses and bacteria Growers use a combination of new genetic and cultural management tools for the control of viruses and bacteria. Biosecurity and pesticide stewardship Effective biosecurity and science-based support is available for pesticide and genetic technology stewardship indicative budget - $63.4 million Investment highlights Delivering the genetic tools and knowledge required to breed wheat, barley and oats with rust resistance Cereal rust diseases are a major threat to Australian cereal crops. Genetic resistance has been, and remains, the key first line defence mechanism for Australian cereal growers to combat highly mobile and variable rust pathogens. Australian researchers have collaborated for over 20 years to ensure Australian cereals/particularly wheat, remain resistant to key rust strains. These collaborative activities were formalised by the GRDC through the formation of the Australian Cereal Rust Control Program (ACRCP) in 2002 and is currently a co-investment between the GRDC, Page 14

18 University of Sydney, CSIRO, University of Adelaide and CIMMYT. The ACRCP s goal is to delivery world-class genetic solutions to controlling rust in Australian winter cereal crops. Phase 4 of the ACRCP will continue to identify and progress new sources of resistance with a view to enabling commercial breeders to produce varieties with durable rust resistance. Control of slugs and snails Slugs and snails cause substantial losses to the Australian grains industry through damage to seedlings and growing plants and contamination of grain at harvest time. Contamination of grain is especially problematic and can cause severe losses especially if grain deliveries are rejected by the customer. Current bait technology does not provide the persistence and efficacy required to control pest activity in crops. There are also environmental concerns associated with the over-use of the current molluscicidal chemistries, metaldehyde, and methiocarb. Indeed, the European Union have moved to withdraw the use of methiocarb as a molluscicide. Some biological mollusc control alternatives have been identified and are in use overseas. For example, a parasitic nematode, Phasmarhabditis hermaphrodita, which can kill slugs and soil-dwelling snails is the active component of the product Nemaslug, however this product is not registered for use in Australia. GRDC is investing in two biological control options. The first is the development of a ciliate protozoa that infects and degrades snail and slug tissue. This work is in the early phase of development and there are several issues that need to be addressed for progress to a control product from production through to formulation and registration. The second biological control investment will enter phase two focussed on the delivery and release of a new strain of the conical snail parasite biological control agent Sarcophaga villeneuveana to Australian grain growers. This strain will be better adapted to Australian conical snail genotypes than the current strain released in the early 2000's. Page 15

19 Theme 4 Advancing profitable farming systems This theme aims to provide growers and their advisers with the tools to design and manage a farming system with the flexibility to adapt and respond; manage risk; and generate profit. The Advancing profitable farming systems theme: ensures that research results from the other themes are integrated on farm undertakes production agronomy research for systems development provides an important conduit for identifying on-farm production constraints and opportunities to inform activities in other themes The investment strategies for this theme differ across agroecological zones and farming systems, and are a combination of: applied farming systems research to overcome major, widespread regional constraints Short-term development and extension activities to improve technologies or practices for a target group of growers in an agroecological zone. Aspirational outcome (10+ years) Australian grain growers managing farming systems that are able to respond and adapt to changing environmental and market conditions to reduce risk and deliver an increase in profitability. Intermediate outcomes (5 years) Knowing what is important (key business drivers) Identification and understanding of the opportunities, risks and potential impacts of key farming practices in each agroecological zone is improved. Planning strategically (building system benefits and rotations) Growers adopt integrated management of opportunities and constraints to increase profit and minimise risk across seasons (above the five-year rolling average). Responding tactically (individual crop agronomy) Gross margin generated from the major crops in each agroecological zone is increased indicative budget - $46.4 million Investment highlights Improving farming system efficiency in southern NSW This investment will focus on using spatial temperature mapping and modelling enhancements to assist growers, and advisors manage heat stress at the farm scale. Heat stress is a key abiotic stress affecting crop and cereal production in all regions of the Australian wheat belt and can have significant effects on grain yield and productivity, with potential losses equal to and potentially greater than other abiotic stress such as drought and frost. Short-term extreme temperate events during flowering and grain fill (e.g. above 32 o C) can have drastic effects on wheat grain yield even if good soil moisture is available. Engagement activities with producers, agronomists and support industries continue to highlight that a key limitation is a lack of accurate, user-friendly, spatial temperature information of a resolution sufficient to enable the risk of extreme temperatures to be managed. The ability to produce high resolution maps as well as model the yield implications of extreme heat events will provide producers with key knowledge to undertake actions to mitigate heat stress. The actions may be short term, including modified agronomic practise, altered inputs or harvest windows in response to events, or longer-term such as revised paddock segregation and altered management on paddocks identified as high risk for heat stress. Page 16

20 Evaluating in-furrow liquid delivery systems GRDC is investing in a project over the next three years to initially identify key input products that are delivered by liquid systems and then to evaluate the performance of these products applied via these systems. Two project phases are proposed, and described below: Phase 1 of the project will investigate how liquid in-furrow delivery systems are utilised by growers. A survey of advisors within the southern region survey is proposed in the first instance to provide an indication of the uptake of these systems by growers and to identify growers to be targeted with a subsequent grower survey. A follow-up survey of growers who have adopted liquid delivery systems will provide more detail on key products applied (fungicides, insecticides, crop nutrients), rates of application, and perceived effectiveness. The survey results will identify priority products for evaluation in field trials. It is envisaged that during the survey process, grower experiences in delivering nutrient and crop protection products via liquid systems will be captured (i.e. tips, traps, product compatibility issues etc.) which may be included in extension material that will also be delivered as part of this project. Phase 2 of the project involves evaluating the efficacy of key products when applied using in-furrow liquid delivery systems via replicated field trials. The products evaluated will be contingent on the findings of the Phase 1 surveys and subject to approval by the GRDC. Understanding the distribution (vertical and horizontal) of the key nutrients N, P, K and S One of the constraints to better nutrient management is an understanding of the distribution (vertical and horizontal) of the key nutrients Nitrogen (N), Phosphorous (P), Potassium (K) and Sulphur (S). In the Southern Region few growers (< less than 15%) regularly measure to depth for N and even fewer for S. Measuring to depths below cultivation depth (0-10 cm) is almost non-existent for P and K with the exception of a limited number of previous research projects. Distribution data is not known for key soil types under long-term no-tillage systems. Available soil pit data are generally greater than 20 years old and do not accurately reflect current management strategies. This investment will investigate: The horizontal and vertical distribution profile of N, P,K & S in key soil types How distribution is influenced by soil type, management and sub-soil constraints The effect of horizontal stratification of nutrients on crop nutrient uptake The contribution of nutrients at depth to crop growth and yield How much of the previous year s fertiliser application can the current season crop access? Page 17

21 Theme 5 Improving your farm resource base This theme is focused on protecting and enhancing soil, water, habitat and atmospheric resources to maintain production performance under a variable climate and ensure enduring profitability Soil and water are major determinants of yield and as such have major impacts on profit. Although much has been achieved in terms of soil conservation and improvement as well as significantly increasing the water efficiency of grains production, ongoing investment in these areas remains a priority. Climate variability will also continue to have an ongoing and possibly increasing impact on Australian grain grower production and profitability. In addition, growers must react to Australian Government and international policies, programs and market expectations set within the climate debate for example, in relation to greenhouse gas emissions. The issues of climate variability and change need to be factored into both seasonal and longer term farm business decisions These impact of soil, water and climate on production and profit need to be understood to minimise exposure to downside risk while also maximising opportunities. Aspirational outcome (10+ years) Grain growers are valued for adopting practices that improve regional habitat, soil, water and atmosphere resources in a changing climate. Intermediate outcomes (5 years) Understanding and adapting to climate variability Farm business plans provide the flexibility to respond to the risks and opportunities of a changing and variable climate. Improving soil health Soil health is improved and soil, nutrient and chemical losses are reduced. Managing water use on dryland and irrigated grain farms Water-use efficiency, quality and availability are improved on dryland and irrigated grain farms that manage the risk of off-farm impacts, including soil, nutrient and chemical run-off, and dryland and irrigated salinity. Understanding and valuing biodiversity Biodiversity is managed on farm for ecosystem services (such as habitat, amenity, pollination and profitability). Communication of sustainable production methods Markets and the broader community recognise the environmental credentials of grain farm businesses indicative budget - $12.9 million Investment highlights Quantifying the effectiveness of cover crops as a means of increased water infiltration and reduced evaporation in the northern region On average 25-50% of rainfall is transpired by crops. Evaporation losses account for 40-60% of the annual water balance with runoff and deep drainage contributing 5-10% in min or zero tillage systems. An extra mm transpiration can be gained through improved fallow management (stubble cover, reduced evaporation and runoff). Minimum-tillage and standing stubble slows evaporative losses immediately after rain events, but does not stop evaporative losses over the entire fallow period. This investment will examine whether cover crops can provide an agronomic and economically viable solution to re-establishing soil cover during the fallow period to aid in water infiltration and reduced evaporation to generate a net gain in plant available water for the subsequent cropping season. Page 18

22 Theme 6 Building skills and capacity This theme is focused on generating leadership, innovation and education in the grains sector. To compete and succeed internationally, the Australian grains industry needs a highly skilled and motivated workforce, including growers, advisers, researchers and managers. The industry has identified several critical challenges: the grains industry and farming are becoming increasingly complex, with many types and sources of information that growers need to make decisions the number of appropriately skilled researchers and advisers being trained to replace the current generation is inadequate this is compounded by a large number of experienced people reaching retirement age agricultural careers are not traditionally attractive to potential candidates the grains industry lacks a whole-of-industry approach to building skills and capacity growers are time-poor and face succession-planning challenges the uptake of technology often requires substantial technical support. Through the Building skills and capacity theme, the GRDC has identified opportunities to focus its investment to address these challenges. Aspirational outcome (10+ years) A dynamic Australian grains industry with the skills and capacity to continuously innovate. Intermediate outcomes (5 years) Grains industry leadership and communication The Australian grains industry has the leadership and communication capacity to proactively engage with the broader Australian community. Capacity building in the extension sector Australia has a skilled agricultural extension sector with access to appropriately skilled people. Capacity building in the R&D sector Australia has world-class R&D personnel with the appropriate skills to meet current and future needs of the Australian grains industry. Capacity building for grain growers Growers recognise the benefits to their businesses of acquiring additional skills and knowledge and hence the value of their participation in training and continuous learning indicative budget - $9.1 million Investment highlights Herbicide innovation partnership The Herbicide Innovation Partnership, established in 2015 by the GRDC and Bayer, is now close to halfway through its 5 year term, and strong progress has been made towards its major aims of discovering and developing novel solutions to the challenges of Australian weed management and, in particular, herbicide resistance. Bayer s recently renovated research facilities house labs and offices for more than 30 chemists and lab technicians focused on weed research, and include several newly recruited postdoctoral researchers from Australia and New Zealand. The Australian and New Zealand postdoctoral program plays a very important role in the Herbicide Innovation Partnership, and will help to build the weed research expertise of the participating scientists. In the second tranche of 10 young Australian and New Zealand researchers will take up their two year research contracts in Frankfurt as part of the partnership. GRDC is very pleased that another tranche of very high quality Australian researchers has been identified will receive valuable industry experience. Page 19

23 Appendix A Investments across the Science and Research Priorities and the Rural RD&E priorities The following table summarises the expected total expenditure allocated against each of the Australian Government s Science and Research Priorities for Food Soil and Water Cybersecurity Energy Resources Advanced manufacturing Environmental changes Health Expenditure $M % of total research expenditure 28% 13% The following table summarises the expected total expenditure allocated against each of the Australian Government s Rural RD&E Priorities Advanced technology Biosecurity Soil water and managing natural resources Adoption of R&D Expenditure $M % of total research expenditure 10% 16% 3% 13% Page 20

24 GRDC CONTACT DETAILS Location: Level 4, East Building 4 National Circuit BARTON ACT 2600 Post: Grains Research and Development Corporation PO Box 5367 KINGSTON ACT 2604 Phone: grdc@grdc.com.au Website: grdc.com.au Grains Research and Development Corporation 2017 ISSN X This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without permission from the Grains Research and Development Corporation.

25 grdc.com.au