A sustainable and nationally coordinated plant biosecurity R,D&E system for Australia. Research Report

Transcription

1 A sustainable and nationally coordinated plant biosecurity R,D&E system for Australia. Research Report August, 2016

2 Australian Farm Institute, August, 2016 This publication is protected by copyright laws. Apart from any use permitted under the Copyright Act 1968, no part may be reproduced by any process without the written permission of the publisher: Australian Farm Institute Limited Suite 73, 61 Marlborough Street Surry Hills NSW 2010 AUSTRALIA ABN T: F: E: info@farminstitute.org.au W: All rights reserved The views and opinions expressed in this publication are those of the authors and do not necessarily reflect those of the Board of the Australian Farm Institute or the Institute s members or corporate sponsors. Disclaimer The material in this Report is provided for information only. At the time of publication, information provided is considered to be true and correct. Changes in circumstances after publication may impact on the accuracy of this information. To the maximum extent permitted by law, the Australian Farm Institute disclaims all liability for any loss, damage, expense and/costs incurred by any person arising from the use of information contained in this Report. Publication Data Keogh M and Goucher G A sustainable and nationally coordinated plant biosecurity RD&E system for Australia. A research report prepared for the Plant Biosecurity Cooperative Research Centre, August, 2016 Design and Production: Australian Farm Institute

3 Executive Summary Australian agriculture increasingly relies on the quality and high biosecurity status of farm products in order to successfully compete in Australian and international markets. With increasing reliance on Australia s high biosecurity status comes increased risk in the event that a biosecurity incident occurs. Rapidly growing agricultural trade and international travel further exacerbates biosecurity risk, as does the emergence of potential bio- or agri-terrorism. Australia s plant industries generate in excess of $30 billion in annual economic value and more than $20 billion in export revenue each year. Much of the success and continued growth of Australia s plant industries can be attributed to the relative absence of plant pests and diseases that are endemic in overseas locations. The current biosecurity status of Australia s plant industries is a result of robust national biosecurity systems, to which plant biosecurity research, development and extension programs (R,D&E) have been a major contributor. For the past decade, much of the responsibility for managing and funding cross-sectoral and strategic plant biosecurity R,D&E in Australia has fallen on the current Plant Biosecurity Cooperative Research Centre (PBCRC) and its predecessor. This structure will expire in mid- 2018, and at present there is no obvious alternative structure or organisation that will take responsibility for plant biosecurity research after that date. This research paper was initially prepared to consider the future of plant biosecurity R,D&E in Australia, and to stimulate discussion among stakeholders and policymakers about how this important activity should be managed in the future, post the current CRC. The Plant Biosecurity CRC has managed a portfolio of R,D&E projects which have involved annual expenditure of approximately $25 million per annum, with funding contributed by industry, state governments and the Australian Government. This amount of funding will most likely be lost, in the absence of a future structure and agreement between industry and governments about future plant biosecurity R,D&E in Australia. A number of different options for the future management of plant biosecurity R,D&E activities was proposed to stakeholders and governments. These included; 1. Do nothing Allow the current CRC to run to the conclusion of its term, wind-up its research program and make no arrangements for co-ordinated national plant biosecurity R,D&E post New CRC Prepare an application for a third plant biosecurity CRC to succeed the current CRC. 3. Plant Biosecurity RDC Create a statutory RDC under the Primary Industries Research and Development (PIRD) Act. The RDC would receive Australian Government funding to undertake plant biosecurity R,D&E that delivers a high proportion of public benefits

4 that otherwise would not occur. The RDC should also have the ability to operate programs on behalf of third party stakeholders (industry or states) that would attract matching Australian Government funds (in a similar manner to RIRDC industry programs). 4. RIRDC plant biosecurity program Provide additional funds to RIRDC to undertake a program of plant biosecurity R,D&E that delivers a high proportion of public benefits that otherwise would not occur. The program should also be enabled to accept contributions from third party stakeholders for R,D&E projects that would deliver significant private or industry benefits which should qualify for matching Australian Government funding. 5. Plant Biosecurity Research Corporation Create a jointly owned (government and industry) research corporation for the purpose of undertaking plant biosecurity R,D&E. The corporation would be funded equally by the Australian Government, state governments and industry (via relevant plant industry RDCs) to support public-benefit and industry-benefit plant biosecurity R,D&E programs. The corporation would have the capacity to accept third party contributions to support specific projects and operate in a manner similar to the PIRD RDCs having a board responsible for governance and determining research priorities, and contracting with research providers to undertake research and deliver specified outputs. Of these options, the most preferred based on 46 submissions received in response to the initial discussion paper was the proposed Plant Biosecurity Research Corporation (Option 5). Other options preferred by lesser numbers of respondents were those which involved a current organisation (including Plant Health Australia or CSIRO) expanding its role to include managing a plant biosecurity R,D&E program. Other options received less support, while the Do Nothing option was strongly opposed by almost all respondents. The responses to the discussion paper revealed considerable misunderstanding about current structures and roles in relation to plant biosecurity R,D&E. The PBCRC has focused on crosssectoral and strategic R,D&E and, while accounting for a relatively small proportion of total national plant biosecurity R,D&E projects, has been almost the sole funder of strategic, crosssectoral projects which also provide an opportunity for future capability development. Funding for the PBCRC has come from a mix of Australian Government, state government and industry funding, with industry funding derived from plant industry RDCs or post-farm project collaborators. A new post-2018 structure would ideally derive funding from the same sources, and would not require an additional industry levy to be struck. The scale of the current PBCRC program (approximately $25 million per annum investment in R,D&E) was not well understood by some respondents, nor the size of the potential loss of both Australian Government and state government funding ($12-$14m per annum) in the event no future structure and associated funding agreement is able to be secured prior to 2018.

5 The potential scale of a future plant biosecurity R,D&E organisation also means that the preferred future governance structure is one which involves a dedicated, skills-based board, elected or appointed by contributing organisations or governments, solely focused on maximizing returns from a portfolio of plant biosecurity R,D&E projects. While the desire of industry participants to minimize overheads by adding governance of a future plant biosecurity R,D&E to an existing organisation is understandable, funding and associated governance issues make a stand-alone structure the preferred option. Taking into consideration the views of industry participants and the analysis associated with this research, the recommended future plant biosecurity R,D&E structure is a stand-alone corporation, created via a joint venture agreement between the Australian Government, state governments and the plant industries (in the form of current plant industry Research and Development Corporations). The structure should have the flexibility to bring in other partners (for example the New Zealand Ministry for Primary Industries) and to enter into joint-venture projects with other industry participants, such as grain or horticulture trading corporations. The new organisation should aim to achieve annual funding levels approximately equal to the current PBCRC (around $25 million per annum), sourced equally from the Australian Government, state and territory governments and Australian plant industries (via current plant industry RDCs). The focus of the new structure should be on funding strategic and cross-sectoral plant biosecurity R,D&E projects, also providing enhanced opportunities for the training and development of younger researchers who will provide an important future industry capability, in an era in which the biosecurity status of Australian plant industry products will play a more and more important role in enhancing the economic value of Australian plant industries.

6 Table of Contents Executive Summary... iii 1. Introduction Objective Scope A changing environment for Australian agriculture Development of plant biosecurity in Australia The Nairn Review The Beale Review Biosecurity research The importance of plant biosecurity R,D&E An outline of plant biosecurity R,D&E in Australia Biosecurity R,D&E organisational structure The plant biosecurity R,D&E policy background The plant biosecurity R,D&E task The research of the PBCRCs Funding of the PBCRCs The need for a permanent plant biosecurity R,D&E organisation A complement to the plant biosecurity strategies The limitations of temporary structures Plant biosecurity risks are nationally significant Importance of cross-industry R,D&E High levels of public benefits Maintaining technical and research skills Ancillary benefits International agricultural biosecurity models Plant biosecurity in Canada Plant biosecurity in New Zealand Lessons for Australia A preferred future model for plant biosecurity R,D&E Do nothing... 44

7 8.2 New CRC Plant Biosecurity RDC RIRDC plant biosecurity program Plant Biosecurity Research Corporation A preferred future model Next Steps References Appendix 1. The Australian rural research and development corporation model Appendix 2. The Australian cooperative research centre model Appendix 3. Responses to the discussion paper.... 1

8 1. Introduction The Plant Biosecurity Cooperative Research Centre (PBCRC) was established in recognition of the need to strengthen the plant biosecurity scientific capacity of Australia. The PBCRC started its six-year term on 1 July 2012, as an extension CRC from the Cooperative Research Centre for National Plant Biosecurity, which began operating in November The PBCRC brings together 27 participating organisations from Australia and overseas, representing industry, universities, and state governments and the Australian Government. It plays a leadership role in coordinating and commissioning research relevant to plant biosecurity in Australia. A major challenge for the PBCRC is to ensure that a key legacy of its $260 million investment in plant biosecurity research, development and extension (R,D&E) over its thirteen-year life will be, in addition the outcomes of that research, an enduring and well-resourced plant biosecurity R,D&E system in Australia. Indeed, the PBCRC is required, as a condition of its funding agreement with the Australian Government, to consult with industry and government to develop national biosecurity structures into which its accumulated knowledge, research capacity, education, training and intellectual property can be transitioned. This is becoming more important for the future of Australian agriculture and preserving Australia s environmental assets. Developing the trade opportunities available to Australia, as a result of new, bilateral and regional trade agreements, will require development of science-based protocols to address the biosecurity risks associated with import and export trade with new markets. As Australian agriculture transitions from being a supplier of bulk agricultural commodities towards being a preferred supplier of safe and high quality consumer products, the risks associated with a breakdown in Australian biosecurity systems become much greater. ABARES has recently estimated that the profitability of Australian cropping farms would be reduced by an average of 20% as a consequence of a biosecurity incursion such as Karnal Bunt, and citrus producers would suffer losses of up to 30% of average farm profitability as a consequence of an incursion of Citrus Greening (Hafi et. al. 2015). It is worth noting that these costs escalate if the unit value of Australian agricultural production increases. Plant biosecurity RD&E in Australia has traditionally been carried out by a range of different stakeholders, including the CSIRO, state government agricultural agencies and universities. These have been funded by the Australian and state governments, and some rural research and development corporations. Over recent decades, two significant changes have occurred. The first has been the progressive downscaling of state government agricultural agencies, and with that a reduction in the resources state governments dedicate to agricultural R,D&E activities, including plant biosecurity research. A second significant change has been the reductions that have occurred in the capacity of agricultural faculties of Australian universities. A result has been that less non-industry research funds have been directed towards rural R,D&E and, as a consequence, it is also likely that the P a g e 1

9 total funding of plant biosecurity research within universities has declined, along with the associated scientific and technical capacity. The maintenance of plant biosecurity R,D&E investment in Australia is important for four principal reasons. The first is that university research activities, as well as being important in their own right, perform a training and development function which ensures that Australia maintains adequate scientific and technical capacity in plant biosecurity R,D&E. The second is that scientific capacity is important in efforts by Australia to maintain high biosecurity standards via pre-border and border protection systems. The third reason this capacity is important is because it ensures that Australia has the skills and knowledge base to enable a rapid and effective response to any biosecurity breaches that do occur. This is particularly important in seeking to restore market access and limit economic harm in such situations. The fourth reason is that research-based assessment of biosecurity risks and control strategies is essential to the development of new international trade opportunities for agricultural and manufactured products. The PBCRC has played an important coordinating role across industry and government over the past eleven years and in doing so has been able to have some influence in ensuring that scarce plant biosecurity research funding is directed towards priority issues, and that spending is also nationally coordinated. However, with the projected wind-up of the PBCRC in 2018 there is a very real risk that plant biosecurity R,D&E will no longer be nationally coordinated, and the absence of the lure of matching CRC project funding will make it likely that plant biosecurity issues will slip down the priority order of research funding organisations. This will result in diminished capacity and increased risk, at the time when plant biosecurity issues are becoming even more important. The research reported here involved the development of a discussion paper addressing the future structure and capacity of plant biosecurity R,D&E in Australia. It canvassed a range of possible options that may be available in a post-pbcrc environment to ensure that Australian plant biosecurity R,D&E remains adequately funded and nationally coordinated. These were circulated to industry and stakeholders for comment, and those comments considered in the development of a preferred future option for the management of plant biosecurity R,D&E in Australia. 1.1 Objective To develop a preferred option for the national coordination and funding of plant biosecurity R,D&E to follow on from the current Plant Biosecurity Cooperative Research Centre. 1.2 Scope The discussion paper canvassed a range of issues relevant to future arrangements for plant biosecurity R,D&E in Australia. It initially considered the changing role of agriculture in the national economy, and the changing international market environment in which Australian farmers and agribusinesses compete. Against this background, the economic significance of Australian biosecurity standards was considered, and by inference the contribution that biosecurity R,D&E makes, specifically plant biosecurity R,D&E. P a g e 2

10 The paper then examined the national agricultural R,D&E system, and the implications of some of the changes that are occurring for the future of plant biosecurity R,D&E. A particular focus was the changing roles of the Australian Government, state and territory governments and industry. Two international biosecurity models were analysed as part of the research one being Canada (which has a similar federal system of government) and the other being New Zealand (which competes in some similar agricultural markets). Finally the research involved canvassing some options for the future of plant biosecurity R,D&E in Australia in the post-crc era, with a particular focus on structural and funding arrangements. The discussion paper, including the range of options, was made available to relevant stakeholder groups and interested parties more generally via the Plant Biosecurity CRC website. It was available for comment over the period from 11 April 2016 to 21 May Stakeholders were able to comment via an online submission form, could download a submission form and respond manually, or could submit a free-form submission. A total of 46 submissions were received over this period. A detailed analysis of the responses provided via the submission process is attached as Appendix 3. As a consequence of the issues raised in submissions, some additional clarification was added to the paper, and the responses were then used to guide the identification of a preferred future option for the management of plant biosecurity R,D&E in Australia. It should be noted that the scope of this research was limited to plant biosecurity, but that there are very similar issues at stake across the biosecurity system as a whole in Australia. This research has not canvassed issues relating to animal biosecurity, save to observe at the outset that the conclusions reached could equally apply. It is hoped that this research will be instrumental in the future development of a plant biosecurity R,D&E system that optimizes the potential of Australian plant and animal industries in Australia to compete domestically and internationally. P a g e 3

11 2. A changing environment for Australian agriculture. The Australian agriculture sector, consisting of the farm sector and associated downstream and upstream service and processing industries, is a small but vitally important sector of the national economy. The gross value of farm production in 2014/15 was $53.5 billion, divided almost equally between plant and animal production. The value of the principal agricultural commodities produced by Australian farms in 2014/15 are shown in table 1. Table 1. Gross value of Australian agricultural production ($A millions) Value of major agricultural commodities produced in Australia, 2014/15 Wheat $ 6,914 Vegetables $ 3,809 Fruit and nuts (excl. grapes) $ 3,543 Barley $ 2,286 Canola $ 1,737 Cotton $ 1,114 Nurseries, flowers and turf $ 1,420 Sugar cane $ 1,143 Grapes $ 745 Sorghum $ 655 Rice $ 298 Oats $ 296 Cattle and calves $ 10,188 Milk $ 4, 720 Sheep and lambs $ 2,953 Wool $ 2, 676 Poultry $ 2,430 Pigs $ 1,156 Eggs $ 687 (Source: ABARES, 2016) The farm sector, comprising 121,000 farm businesses, produced approximately 2% of national GDP and directly employed approximately 280,000 persons in 2014/15, some 2% of the total Australian workforce. The farm sector is a larger component of regional economies comprising up to 10% of total employment in some regions. Almost two thirds of agricultural production (by volume) is exported, valued at $43.6 billion (fob value) in , making up 17% of the total value of Australian merchandise exports. Major export commodities include wheat, barley, rice, cotton, sugar, wine, wool, dairy products, beef, lamb and horticultural products. P a g e 4

12 $A millions Plant biosecurity R,D&E in Australia This output is estimated to have used approximately $30 billion of product and service inputs from other sectors of the Australian economy, and farm sector products were the key inputs to the food and beverage processing sectors in Australia, which contributed in excess of $90 billion to Australia s economy in 2014/15. The restaurant and retail food sectors also rely heavily on Australian farm sector products. The plant industries are critically important, making up half the total value of production, and approximately half the total value of agricultural exports. The plant industries are also critical as the source of the fodder and feedstuffs utilised by the livestock industries, in particular the pork, poultry and feedlot cattle industries. $6,000 Australian crop and plant exports ( ) $5,000 $4,000 $3,000 $2,000 $1,000 $- Figure 1. Value of plant-related agricultural exports. Major international markets for Australian agricultural products include China, the USA, Japan, Indonesia, Taiwan, the EU and New Zealand. The global agricultural trade environment has undergone major changes over the past decade, due to several factors. The progressive freeing-up of global agricultural trade under multilateral trade agreements and more recently as a result of bilateral and regional trade agreements has dramatically increased the market opportunities for Australian agricultural exports. The annual value of global agricultural trade has more than tripled since the year 2000, and the rate of growth shows few signs of slowing down. P a g e 5

13 Figure 2. Gross value of global agricultural trade At the same time, strong export competition has emerged from South American, Asian and Eastern European agricultural exporters, many of many of which have considerably lower costsof-production for similar products from Australian farms. Nations such as Brazil, Argentina, Ukraine, India and Malaysia have become very competitive suppliers of agricultural products to high-volume markets such as Japan, China and Russia. Some of these emerging exporters are also succeeding in more challenging markets such as the EU. Fortunately, to date, the superior quality and very high biosecurity and safety standards of Australian agricultural exports have ensured that they remain competitive in markets which place a premium on such characteristics. Examples include beef, sheepmeats and milk powder exports to Japan, Korea and China, and Australian rice, barley and noodle wheat exports to China, Japan and Korea. In each of these instances, Australian products are traded at a significant premium, as a consequence of the importing country s recognition of the superior quality and safety of those products. The rapid expansion in global agricultural trade has coincided with a number of other developments impacting on biosecurity, which were the subject of research conducted by the CSIRO in 2014 (CSIRO, 2014). That research pointed out that not only was agricultural trade growing rapidly (and hence an increasing biosecurity risk), but this was coinciding with greater vertical integration of supply chains (often across international borders) making entire supply chains more sensitive to biosecurity breakdowns at any point alo ng that chain. Coincidental with the development of integrated multi-national supply chains has also been the development of a much more diverse range of niche and specialist markets, including those focused on organic and natural production systems which do not use conventional herbicides and pesticides. The growth of these production systems may create additional or altered biosecurity risks, and may also create the need for changed approaches in response to biosecurity incidents. P a g e 6

14 Other developments that have the potential to change or exacerbate biosecurity risks include the sustained increase that is occurring in global tourism, which increases the chance of humans acting as a pest or disease vector. In combination with growing urbanisation, this means that an increasing proportion of those people travelling are not familiar with farms, or aware of the potential for pest and disease incursions to disrupt food production. The prospect of deliberate introduction of agricultural pests or disease to harm the economy and Australian food production, sometimes called agri-terrorism, is also seen as an increasing risk. The development of international airport terminals in regional areas such as Canberra, Toowoomba and Cairns also creates additional risks, given the proximity of these to major agricultural production areas. In combination, all these changes are adding to the biosecurity risks faced by Australian agriculture. Other factors noted in the CSIRO report that are changing biosecurity risks include the persistent reduction in the number biosecurity specialists available within the Australian science community, potentially limiting both research and response capacity in the event of a biosecurity shock. Climate change also has the potential to alter biosecurity risks by changing the capacity of exotic pests and disease organisms to migrate as well as the changing their survival prospects and population growth rates within Australia. P a g e 7

15 3. Development of plant biosecurity in Australia Attention to biosecurity in general and in particular plant biosecurity and related research has been evolving at an accelerating pace in Australia. The origins of biosecurity policy start with the Australian Quarantine Act 1908, which was a response to the request by the States for uniform laws governing infected persons, vessels, plants and animal entering Australia from overseas. The act was originally administered by the Department of Trade and Customs and later passed to the Department of Health when it was formed in This likely reflects a prevailing view, at least at the Australian Government level, that the primary concern was around human health and infectious diseases. Plant and animal health matters were substantially administered by the States through their departments of agriculture. In December 1984, responsibility for the administration of quarantine matters was moved to the Australian Government Department of Primary Industries. The States continued to deliver operational services in border protection under service agreements with the Australian Government. In 1995 the respective state and Australian Government primary industry ministers agreed that the service delivery functions for quarantine should be transferred from the states to the Australian Government. This occurred progressively over subsequent years. 3.1 The Nairn Review In 1995 the Australian Government undertook a review of Australia s quarantine system. The Nairn Review published its report in 1996, titled Australian Quarantine a shared responsibility (The Report), which foreshadowed a watershed in the policy approach to plant and animal biosecurity. The Report stated: In the past, quarantine has tended to focus on a border or barrier approach. The Review Committee sees quarantine as much broader than this (p.5). The Review Committee defined a new approach to quarantine as: effective quarantine as a continuum reflecting a nationally coordinated system of surveillance, inspection and control using pre-border, border and post-border measures to prevent the establishment and spread of unwanted pests and diseases that may have a deleterious effect on humans, animals, plants or the natural environment, At present the activities under the three elements of the continuum of quarantine pre-border, border and post-border are addressed by each segment of the Australian community in different ways. (p. 32-3). This view that a comprehensive biosecurity system requires coordinated control measures at preborder, border and post-border stages; supported by surveillance and diagnostic capability continues to guide quarantine and biosecurity activity today. The Nairn Review also identified that responsibility for biosecurity for the natural environment had assumed a greater importance than previously existed. Rising volumes of international trade P a g e 8

16 also brought greater threats to indigenous plants, animals and ecosystems. A range of international treaties and conventions dealing with biodiversity, biosafety, endangered species and world heritage listings had increased Australia s responsibility to protect its environmental assets. Australia s accession to the World Trade Organisation Technical Barriers to Trade (TBT) Agreement and Application of Sanitary and Phytosanitary Measures (SPS) Agreement also required greater rigor in reaching decisions on how to apply biosecurity measures for the protection of the agriculture and the natural environment. The Review Committee found an imbalance between the resources devoted to plant and animal quarantine. It commissioned four studies of the number of pest and disease incursions over the previous 25 years. These studies found that over that period the rate of incursions of plant pests and diseases had been 10 times more than animal pests and diseases. It concluded that steps need to be taken to redress this imbalance. In particular, the Review Committee noted the (then) recent formation of the Australian Animal Health Council (the forerunner to Animal Health Australia) to coordinate animal health and disease preparedness activity while no equivalent organisation existed to address plant health matters. The Nairn Review proposed the formation of a national organisation to coordinate plant health policy and operational activities. This recognised the economic importance of plant industries, the growing risks from international trade and tourism and need for a more broadly based, rigorous approach to managing plant biosecurity. This led to the formation of Plant Health Australia (PHA) in April PHA brings together representation from industry, state governments, the Australian Government and CSIRO, having a total membership in excess of fifty industry organisations, governments and associate members. PHA is a partnership between industry and government that coordinates risk management, emergency preparedness and response against incursions of plant pests, as well as developing strategies for management of plant pests and diseases such as the National Fruit Fly Strategy and the National Plant Biosecurity Strategy. PHA is also responsible for managing the Emergency Plant Pest Response Deed (EPPRD), a formal agreement between PHA, the Australian Government, all state and territory governments and plant industry signatories covering the management and funding arrangements for responses to emergency plant pest incidents. States continue to contribute significant resources to biosecurity in post-border quarantine preparedness and action to prevent the spread of plant pests and diseases. Control measures maintain areas free of Queensland Fruit Fly, which enables overseas trade in many products to continue unrestricted. State government action in relation to many other exotic weeds species and plant pests limit their spread and the impact they might have on agricultural production and trade. P a g e 9

17 PHA continues as the central focus for coordinating plant biosecurity policy and activity in Australia. However, its role is limited to coordination and education and does not have active operational responsibility for responding to plant pest incursions or implementing management strategies. PHA s activities are funded by subscriptions from member organisations which raised $2.3 million for 2015/16. PHA also assists with the development in industry-specific and cross-sectoral biosecurity risk management plans with additional funding contributed by industry and separate government contributions. The National Biosecurity Committee was established in 2008 comprising the relevant senior state and Australian Government departmental executives with responsibility for biosecurity matters. The Committee considers all biosecurity matters and advises the council of agricultural ministers and meetings of departmental heads on biosecurity matters. The Plant Health Committee comprises senior plant health policy officers from the Australian and state governments. The Committee is the national policy and decision-making forum in which plant biosecurity matters are considered. It provides policy, technical and regulatory advice on plant biosecurity matters to all levels of government. PHC has responsibility addressing development of plant biosecurity policy in areas, including those identified for implementation in the Intergovernmental Agreement on Biosecurity (IGAB) and overseeing the implementation of the National Plant Biosecurity Strategy (NPBS). 3.2 The Beale Review In response to a changing regulatory environment and growing tensions around biosecurity issues the Australian Government commissioned another detailed review of Australia s quarantine and biosecurity arrangements in February The inquiry, chaired by Roger Beale, published its report - One biosecurity; A working partnership - in September 2008, containing 84 recommendations for reform. The Beale Review was prompted by at least four emerging factors: Tension between the Australian Government s treaty obligations, particularly in relation to trade and import restrictions, and state actions to protect specific industries from pest and disease threats. Disagreement over roles and responsibilities in maintaining seamless biosecurity protection arrangements for Australia. Increasing demands on the biosecurity system from increased trade volumes, increasing tourist numbers and heightened concern about agri-terrorism. Inconsistency between states in biosecurity regulations and procedures that hindered interstate business and raised the potential for biosecurity breaches. P a g e 10

18 In addition, a number of high-profile biosecurity incidents including an outbreak of foot and mouth disease in the UK, the outbreak of bovine spongiform encephalopathy (BSE) in Europe, outbreaks of avian influenza and an outbreak of equine influenza in Australia, heightened the awareness of the risks to both people and international trade in food and manufactured products. Actions through the WTO under the TBT and SPS agreements had clearly established that Australia needed a single national commitment to developing objective, science-based, sanitary and phytosanitary criteria to apply to imports. The Beale Review endorsed the concept of shared responsibility for biosecurity in which the Australian Government has responsibility for pre-border, border and some post-border aspects of the system and states have responsibility for other post-border elements and for general plant and animal health within their jurisdictions. Industry and the community were also acknowledged to have an important role in preventing, reporting and controlling incursions. Although responsibility for surveillance and diagnostic capability lies primarily with the states, their investments in this area has a clear common good. The Beale Review emphasized the need to coordinate the states to agree on surveillance and diagnostic regimes, to share information, to work on system development and efficiency improvement and to appropriately share costs. The review highlighted the importance of science and research in relation to compliance with trade agreements and facilitating trade. It found there were no national arrangements for setting research priorities or undertaking biosecurity research and that there was a need for research on improved diagnostics. It noted gaps in the available research facilities and a lack of attention to ensuring the adequate skills in key research fields required to support the biosecurity system. The Beale Review concluded that the Australian Government s role should extend beyond its border responsibilities and should develop a clearer partnership with the states that would involve: enforcing import permit decisions so that states cannot impose additional biosecurity measures; developing a traceability scheme on a risk basis so that animal and plant matter of greater biosecurity interest can be tracked across the border; managing emergency responses through national powers where this would be sensible; harmonising biosecurity requirements for interstate trade in specified circumstances; and information sharing between jurisdictions based on a national biosecurity risk information sharing protocol and data sharing infrastructure. In the period since the Nairn Review the concept of a shared responsibility for biosecurity had developed considerably. However, the Memorandum of Understanding on Animal and Plant P a g e 11

19 Quarantine measures signed between the Australian Government and the states in 2002 was not legally binding, left room for differences in policy and administration, and did not ensure adequate resourcing of the biosecurity system. The Beale Review recommended developing a new, legally binding, agreement between the Australian Government and the state governments to address biosecurity responsibilities and operations. This recommendation led to the development of the IGAB which came into effect in January Biosecurity research The attention to research that supports quarantine and biosecurity in Australia has had a similarly fragmented and sporadic development. Throughout most of the 20 th century, this type of research was mostly conducted by state governments within various agricultural industry research programs. Some broader, cross-industry research occurred in the disciplines of entomology within CSIRO and state departments of agriculture, in plant and animal pathology, and in institutions such as the CSIRO s Stored Grain Research Laboratory. The Nairn Review did not directly address research matters. The Report noted that few submissions addressed the agricultural research needed to support quarantine and biosecurity. It noted that several submissions had expressed concern at significant human resource deficiencies in particular disciplines such as entomology and veterinary diagnostic pathology. The Report recommended that the Australian Animal Health Council and proposed Australian Plant Health Council (PHA was created instead of this body) should respectively review field diagnostic and research capacity for animal and plant health. The Beale Review acknowledged the importance of R&D in relation to biosecurity and found that steps needed to be taken to ensure it was appropriately structured and funded to support the biosecurity system but did not recommend specific structures or arrangements for undertaking research. Australia has a creditable history of successful agricultural research that has made a major contribution to the agricultural sector s enduring high rate of productivity growth. The research has also responded to a range of pest and disease incursions and threats, and contributed to establishing and maintaining access for Australian produce to markets across most regions of the world. During the early and mid-20 th century most applied agricultural research was funded and undertaken by state governments. This effort was supported by CSIRO and universities which undertook basic and strategic research relevant to agricultural science and technology. This research incorporated what is now recognised as aspects of biosecurity R,D&E though for the most part it took place within various industry portfolios. Toward the end of the last century significant change occurred in agricultural research in general at the same time as the biosecurity policy and administration was undergoing the changes outlined above. Most noticeably, community and as a consequence, government P a g e 12

20 acknowledgement of the importance of agricultural research declined from the high priority it was accorded following the food shortages during the Second World War. Sciences of all types became less highly regarded as the economy broadened, as living standards improved and as service industries outgrew the resource and industrial based segments of the economy. Over the past two to three decades funding and performance of agricultural R,D&E by state governments has declined. Industry funding of agricultural R,D&E has increased and industry has been handed an increasing share of the responsibility for prioritising and managing its own R,D&E. This shift was substantially encapsulated and encouraged by the creation in the mid- 1980s of a series of rural R,D&E councils, later incorporated into rural R,D&E corporations. The corporations were the result of a succession of agreements in which each major agricultural industry agreed to a levy to fund its research in return for which the Australian Government would match the funds raised up to a limit of 0.5% of gross value of production, and industry would have substantial control of the research priorities and management of the research spending. Appendix 1 provides a description of the development of the Australian rural research and development corporations which are now responsible for the management of a substantial share of the investment in Australia s agricultural research. The research has been conducted by state governments, the Australian Government through organisations including CSIRO, by universities and by private companies. While the R&D corporation model is regarded as highly successful and is strongly supported by agricultural producers, it has its limitations. The Productivity Commission in its most recent review of the rural R&D corporations in 2011 found that the corporations gave insufficient attention to so-called cross-industry and strategic research where the benefits might flow to multiple industries, or to broader resource management and security research. The under-investment in research directed at resource management and biosecurity reflects a gap left by the Australian Government s decision in 2009 to wind-up Land and Water Australia (LWA), an R&D Corporation that was totally funded by the Australian Government for the purposes of undertaking research into maintaining and improving the sustainability of agricultural landscapes. These two areas in which the industry R&D corporations have notably not been heavy investors, overlaps with and includes much plant biosecurity research. Unlike other R&D corporations, LWA was predominantly focused on research aimed at delivering substantial public benefits in areas relating to the health of rivers and water supply catchments, preservation of public lands and natural landscapes and wildlife habitat and addressing long-term land management challenges such as erosion, soil loss, structural degradation, soil salinization and acidification. Compared to the high degree of private benefits delivered by industry R&D corporations, the benefits of LWAs research were far more widely distributed through the community and extended over much longer time frames. Some plant biosecurity R&D also has these characteristics. P a g e 13

21 LWAs funding was almost all provided by the Australian Government and so lacked the direct financial interest of an immediate constituency in that other R&D corporations possess. Without the implicit partnership with industry that underpins both the funding and management of other R&D corporations, LWA was vulnerable to waning political support and cost cutting by government, which ultimately led to its demise. To avoid a new plant biosecurity organisation facing this threat in the future, consideration should be given to ensuring it has a robust support base and is not wholly dependent on a single funding source for its continued existence. Prior to the Nairn Review, when biosecurity was primarily focused on border protection, little specific attention was paid to the role of research and development in maintaining biosecurity. Where a research need arose this was addressed either directly by the Australian Government and CSIRO or coordinated through the relevant Ministerial Council or the Standing Committee of the heads of state and Australian Government departments. As the approach to biosecurity has broadened, as biosecurity risks have increased and as science has developed to enable it to play a greater role in providing protection, research and development has assumed a more prominent role in plant biosecurity. While RDCs were effective in addressing industry specific biosecurity R,D&E requirements, cross-industry research, basic biosecurity research and matters requiring international cooperation were addressed on an ad-hoc, case-by-case basis. The broadening of biosecurity operations into pre- and post border matters and the increased demands on the biosecurity system gave rise to technical and scientific questions that needed to be answered. Stakeholders, especially state governments, initially responded to these research questions on a case-by-case basis within their own organisations. As these research needs became more clearly defined and some more complex medium-term projects emerged, stakeholders sought to address these needs with the formation of a cooperative research centre that brought together industry, government and university research capability. The Cooperative Research Centre for National Plant Biosecurity (CRCNPB) was formed in 2005 with research programs addressing the following; Preparedness and prevention developing the knowledge required to underpin decisions on the risk of entry, establishment and spread for exotic harmful plant pests and diseases. Diagnostics developing new tools and procedures to provide accurate, sensitive, reliable access to data and expertise. Surveillance developing surveillance procedures and new technologies to assist in accurately defining Australia s plant health status and market access. Impact management developing management strategies to minimise the social and economic impact of a harmful plant pest or disease incursion. Post-harvest integrity contributing to the management of biosecurity threats in the post-harvest grains sector. P a g e 14

22 Education and Training providing resources to support PhD students, workshops/training in plant biosecurity and the development of a national schools program and postgraduate curriculum in plant biosecurity These CRC programs addressed research needs across the pre-border, border and post-border biosecurity continuum. The CRC continued until investing $55.6 million (cash and inkind) into 180 projects over the life of the CRC. A summary of the projects undertaken by the CRCNBP is shown in table 2. Table 2. Summary of CRCNBP projects. CRC NPB Program Number completed % of portfolio projects Preparedness and Prevention Diagnostics Surveillance Impact Management Post Harvest Integrity Education and training* Delivery and Adoption* Cross Program Consultancies* Total * Note almost all of these projects would fit as part of the Program portfolios Source: PBCRC The role of the CRC was considered sufficiently relevant and important that in 2011 it was successful in its bid on behalf of the members for the CRC to continue. A new CRC was created and will run until 2018 with the objective of developing scientific knowledge, tools, resources and capacity to safeguard Australia s plant industries from the economic, environmental and social consequences of damaging invasive plant pests and diseases. The six-year PBCRC commenced with a commitment of $59m of cash and $72m in-kind, although that commitment has already been exceeded by about $30m (cash and in-kind) less than four years into its term. While the CRCs have provided a valuable capability and focus for plant biosecurity R,D&E, CRCs are intended as medium-term structures with a defined finite, research task. They are not designed or intended to provide permanent institutions to meet ongoing, evolving research needs or research that is substantially of a public good nature. An outline of the CRC model is contained in Appendix 2. The development of Australia s biosecurity system and its biosecurity R,D&E effort have been influenced by a number of broad driving factors that provide a perspective from which to better understand that development and that are important to future development and funding of biosecurity R,D&E. These are briefly outlined in the following dot points; P a g e 15

23 The reliance on border quarantine barriers for biosecurity has been supplanted by a broadly based pre-border, border and post-border regime supported by stronger surveillance and diagnostic capability. International treaties and agreements impose responsibility on Australia to protect natural environmental resources and provide an evidence base for both industry and natural resource biosecurity measures. Through most of the 20 th century state governments provided much of the agricultural R,D&E capability in Australia, but this has been progressively rationalised. The development of the rural R,D&E corporation model in the 1980s is a world class model for managing industry R,D&E but there is less evidence that the model is effective for public-good and cross-industry R,D&E. The need for a concerted national biosecurity R,D&E effort has been met by two CRCs which have fulfilled needs identified by government and industry but cannot provide for a permanent, ongoing R,D&E effort either for industry or for public-good research. P a g e 16

24 4. The importance of plant biosecurity R,D&E The focus of this discussion paper is on plant biosecurity R,D&E, and the value that activity provides to Australian agriculture, the Australian environment and the general community. However, there is only limited analytical information available that specifically attempts to put a value on plant biosecurity R,D&E activities. Such valuation estimates are intrinsically difficult, because they involve making assumptions about the potential impact of a biosecurity incident in the absence of concerted plant biosecurity efforts, and then making some assumptions about how investment in plant biosecurity R,D&E over time would add to the overall biosecurity capability and better equip the nation to either prevent the incident occurring, or to respond to it more effectively. A recent report by ABARES (Hafi et al 2015) noted: The value of biosecurity is approximated by the on-farm costs and losses avoided as a result of biosecurity activities that target the pathways through which pests, diseases and weeds enter, become established and spread throughout Australia. Without an effective biosecurity system, the likelihood of a pest, weed or disease incursion is expected to be significantly higher and, in the event of an incursion, pests, weeds and diseases are expected to become endemic. As a result, farm profits may be lower because of: direct production losses (for example, reductions in the productivity of crops and livestock and output quality) additional expenditures on control measures and damage mitigation (for example, additional chemical inputs) export market losses (for example, because of trade bans or the loss of price premiums as products are diverted to lower value markets where the pest, disease or weed is endemic). In this instance the discussion concerned the biosecurity system part of which is plant biosecurity R,D&E. Quantifying the significance of plant biosecurity R,D&E in the overall biosecurity system is a challenge in itself, let alone quantifying its significance for Australian agriculture. While recognizing this challenge, there are some indicators available that can provide a sense of the value of plant biosecurity R,D&E. The gross value of agricultural crop production in 2014/15 was $26.9 billion and the gross value of forestry production was $3.4 billion (2013/14), together representing almost 50% of the value of agricultural output. In 2014/15 the value of crop and forestry exports totaled $24.4 billion, comprising 51% of total rural exports and 9.5% of total merchandise exports. These statistics provide a measure of the value of production and trade that is at risk from incursions of plant pests and diseases. To this could be added a substantial share of animal production that is dependent on natural and improved pastures as well as rangelands and the natural environmental assets that comprise landscapes and natural habitats. P a g e 17

25 The extent to which plant production and the nation s assets are at risk from plant pests and diseases is more difficult to estimate. All plant crops are susceptible to exotic and endemic pest and diseases that have the potential to diminish or in a worst case completely destroy economic production. It is impossible to assess in aggregate the potential economic cost of exotic pests and diseases to Australia s plant industries and natural environment. However we get an idea of the potential costs and disruption by looking at some examples of specific pests and threats to particular industries. There are a range of studies that have examined the potential impact of some specific plant pests and diseases, and other studies that have estimated the pay-offs from research in particular plant biosecurity fields. Abdalla et al. (2012) estimated the potential impact on horticultural farm output of Queensland fruit fly and Mediterranean fruit fly. It found annual benefits of Australia s fruit fly control program of between $29 million and $37 million depending on the severity of the outbreak scenario that could occur. Around half of the benefits come directly from reduced production losses and improved market access. Murray and Brennan (2009) assessed the cost of wheat diseases in Australia. They found that the lost production due to endemic wheat diseases was valued at $913 million of which almost 50% was due to three major diseases, yellow spot, stripe rust and septoria. In the absence of existing control measures it was estimated that the five most damaging wheat diseases (stripe rust, yellow spot, CCN, stem rust and crown rot) would reduce the value of production by $3,154 million per annum, equivalent to about 2/3 of total wheat production and about 90% of wheat exports. Stansbury et al. (2002) modelled the risk of an outbreak of Karnal bunt, a fungal infection of wheat seeds, on the wheat industry in Western Australia. The disease impacts quality of the wheat more than yield, but would likely also result in closure of many markets that do not accept grain from countries where the disease is endemic. The authors estimated that the disease would have an economic effect of between 8 and 24% of the 8-10 million tonnes of wheat produced in WA, currently with a value of around $2.5 billion per annum. WA s wheat production represents about 40-50% of Australia s wheat production and about 50-60% of wheat exports. Schofield Robinson and EconSearch Pty Ltd (2002) investigated the potential impact of incursions of the insect pest, Phylloxera (Daktulsphaira vitifoliae) on the South Australian wine industry, regional economies and the state economy. The impact of Phylloxera on grape production, before considering the impact of remedial action, was estimated to vary from 8% to almost 99% in different regions, with the biggest impact felt in some of the most economically important growing regions including Coonawarra - 99%, Padthway - 42%; McLaren Vale - 40% and Barossa Valley - 36%. The study estimated that vineyard profitability would be reduced by between 20% and 54% across the various winegrowing regions, with the biggest impacts in the Riverland (the largest P a g e 18

26 producing region) - 54%; and the major, premium winegrowing regions such as McLaren Vale - 41%; Barossa Valley - 39% and Coonawarra - 35%. The aggregate loss of value added across the South Australian economy was estimated at $170m and a loss of 560 jobs. Around 80% of the impact on value added and 85% of the impact on employment would fall on the Riverina, because of the volume of its output, and on the larger premium wine regions of McLaren Vale, Barossa Valley and Coonawarra. An instance of an industry at very high risk is the Australian banana industry. The value of Australia s output of bananas was $438m in 2013/14 of which about 95% are Cavendish varieties. The most economically damaging exotic diseases of bananas are Black Sigatoka and Panama disease. Black Sigatoka is controllable but would significantly diminish production if it became widespread and would result in loss of most export markets. Panama disease is specific to Cavendish bananas and once established is virtually impossible to contain or treat. If it were to become widely established in the North Queensland production region it could eliminate 80-90% of Australian banana production. These examples show the potential for serious impact on some of Australia s most significant plant-based industries. Plant Health Australia oversees 34 industry strategies aimed at containing the risks associated with specific exotic and endemic plant pests and diseases. The impact of the most critical pests or diseases in any one of these industries is, as the above examples show, highly disruptive to the industry and to regional economies. Because of the range of pest and disease organisms, differing vectors for their incursion and spread, and the variety of methods of control, the research task for plant pests and diseases is more complicated and involves a wider array of disciplines than for the most prominent animal disease risks. The principle animal biosecurity risks, such as foot and mouth disease, brucellosis and tuberculosis, affect multiple species and would cause widespread disruption to animal production and trade. These prominent disease risks have readily attracted the most attention from governments and research funding agencies. As recognised as long ago as the Nairn Review in 1996, there is a need to redress the imbalance between the research efforts on biosecurity risks to plant industries compared to animal industries. The value of plant biosecurity R,D&E is further magnified by two factors. One is the increased reliance on pre-border surveillance and control measures for an effective quarantine system. This requires trained and skilled personnel from Australia who can be deployed overseas to assist in biosecurity efforts in key trading partner nations. Such personnel would normally receive their early training while participating in R,D&E activities in Australia. A second is the growth of trade agreements that involve technical protocols for surveillance and testing requiring equivalence between trading partners. For Australia to continue to be able to meet these requirements necessitates an adequate, technically-skilled biosecurity workforce, and biosecurity R,D&E activities in Australia provide the basis of such a workforce. P a g e 19

27 5. An outline of plant biosecurity R,D&E in Australia To many readers, plant biosecurity R,D&E will seem a somewhat arcane field of science. It receives little public attention, is rarely a source of newsworthy technological breakthroughs and its contribution to the community s wellbeing is not well understood. To better appreciate the dimensions of the plant biosecurity task it is helpful to describe the key component parts of the overall effort and the organisational structure through which the R,D&E is administered. This section seeks to provide that description. It is first necessary to appreciate the separation between plant biosecurity R,D&E and the operational activity that is charged with maintaining Australia s plant biosecurity. The operational activities managed by the Australian Government include border barriers against importation of pests and diseases. State governments, with support from industry and the community, undertake on-ground, domestic surveillance that checks for incursions. Diagnostic services are mostly provided by state governments. Maintenance of response strategies for specific disease incursions involves the Australian Government, state governments and industry, mostly under the guidance and support of Plant Health Australia. The following discussion focuses on R,D&E functions and not these operational activities, albeit some of the R,D&E feeds into and informs these operational activities. 5.1 Biosecurity R,D&E organisational structure Biosecurity in Australia is a shared responsibility between the Australian Government, state governments and industry and so too is responsibility and involvement in biosecurity R,D&E. The shared responsibility has created a complex array of policies, strategies, agreements, committees and other organisations that contribute to managing biosecurity R,D&E. Figure 3 shows the principal components in the organisational structure for biosecurity R,D&E for plants and animals in Australia, as distinct from the organisations that actually perform the R,D&E. This acknowledges the current research management philosophy that separating the responsibilities for funding of research, priority setting and management, and research performance leads to more transparent governance and more efficient use of resources. This complicated structure has evolved over the past two decades as the biosecurity task and the R,D&E that contributes to it has been progressively cut and diced into smaller, more homogeneous parts. Plant and animal biosecurity matters are clearly separated at all levels. There is a cascading hierarchy of R,D&E strategies that address R,D&E needs, each with a committee responsible for implementation, although conspicuously the implementation committees have no budget for implementing their strategy. Each state also has its own biosecurity strategy, some more explicit than others, through which decisions on policy and operational matters must be progressed. The hierarchies of biosecurity committees are each charged with coordinating activity between industries, the Australian Government and state governments, on operational activities (surveillance, diagnostics, incursion management) and research, but the links to the operations of respective state departments are opaque and indirect. P a g e 20

28 While the committees and structures often involve many of the same people, the communication between structures is often not efficient and the decision-making processes are complex and time consuming as matters shuttle between committees. While it is easy to pass off many of the components of this structure as being a consequence of Australia s federal structure it is also clear that the current arrangements are the cause of considerable inefficiency in organising and managing biosecurity R,D&E. COMMONWEALTH GOVERNMENT STATE GOVERNMENTS INDUSTRY Intergovernmental Agreement on Biosecurity Primary Industries R, D & E Framework Plant Health Australia Animal Health Australia National Biosecurity R, D & E Framework National Biosecurity Committee Pest Plant Response Deed Emergency Animal Diseases Response Agreement National Environment and Community Biosecurity R, D & E Strategy Plant Health Committee PlantPlan Ausvet Plan National Plant Biosecurity R, D & E Strategy National Plant Biosecurity R,D & E Implementation Committee Animal Health Ccommittee National Plant Biosecurity Strategy National Animal Biosecurity R, D & E Strategy Nat. Animal Biosecurity R,D & E Implementation Committee Invasive Plants and Animals Committee Marine Pests Sectoral Committee Industry Research & Development Corporations National Biosecurity Emergency Preparedness Expert Plant Biosecurity CRC Information Governance Expert Group Invasive Animals CRC Note: for convenience, not all relationships are displayed Legend - Corporation - Policy, Strategy - Committee - Binding agreement Figure 3. Organisational structure for biosecurity research and development. P a g e 21

29 5.2 The plant biosecurity R,D&E policy background There is a plethora of policy statements, documents and agreements that acknowledge plant biosecurity R,D&E is an important component of the overall R,D&E task and is crucial to an effective plant biosecurity system. These statements include: Intergovernmental Agreement on Biosecurity (IGAB) which states that an improved biosecurity system will be supported by a national biosecurity research development and extension framework that aligns resources to address priorities, builds capacity and contributes to collaborative management of risks. Schedule 8 of the Agreement sets out a national biosecurity R,D&E framework intended to deliver a robust, integrated biosecurity R,D&E capability. National Plant Biosecurity Strategy which highlights declining availability of skilled human resources, effects of climate change, conflicting priorities for resources and funding, and difficulties in coordinating and funding plant biosecurity R,D&E. It identifies the need for a national framework for national plant biosecurity R,D&E. National Plant Biosecurity R&D Priorities are listed in the National Plant Biosecurity Strategy. National Plant Biosecurity R,D&E Strategy identifies a number of specific responses in relation to R&D to effectively implement the plant biosecurity strategy agreed to under IGAB. These include monitoring plant biosecurity R&D and research capability, identifying and prioritizing R&D, developing national plant biosecurity R&D programs and a commissioned research program. These documents all make a clear commitment to the importance of a well-funded and coordinated plant biosecurity R,D&E effort but are all deficient in providing for a dedicated full time structure that is able to; develop a research agenda, ensure that funding is directed to the highest priority research questions, ensure that the research is well administered and delivers results, and ensure that the results are taken up by industry and biosecurity agencies. The documents also fail to commit the parties to funding for the R,D&E that is clearly required. The National Plant Biosecurity Strategy acknowledges the success of the industry R&D corporations in directing research for their respective industries and their record in effectively prioritizing research and managing R&D to deliver high returns from their investments and productivity gains for producers. The Strategy notes that cross-industry R&D (of which plant biosecurity is part) has struggled to achieve the same level of prominence and funding. However, when the strategy document comes to addressing structural arrangements for plant biosecurity R,D&E, it does not look to the RDC model for guidance or seek to emulate its P a g e 22

30 success. Without any supporting arguments, the National Plant Biosecurity R,D&E Strategy concludes that successful R&D outcomes can be achieved by an implementation committee that has no budget for R&D and meets only periodically, and by nominating (presumably one of its members) as a coordinator, also with no budget or staff for commissioning and administering R&D. Funding for the strategy is addressed in three lines and extends only to covering meeting costs, the cost of an independent chairman and the cost of the coordinator. 5.3 The plant biosecurity R,D&E task Plant biosecurity R,D&E lies within a continuum of plant oriented research rather than existing as a separate and distinct field in its own right. Microbiology, plant pathology, entomology, plant genetics, plant physiology, biochemistry and biometrics all contribute to plant biosecurity R,D&E and to improving industry productivity. Within state governments, the plant biosecurity operational functions of diagnostics, surveillance and incursion management (and the staffing of these functions) often overlap with plant biosecurity R,D&E. Plant biosecurity R,D&E can also be categorised, as applies in other fields of scientific research, as: Strategic basic research Applied research or Experimental development. At the basic research end of this spectrum the research may not be directed specifically at biosecurity outcomes and will likely not be directed at benefiting a specific industry sector of the economy. Such research mostly delivers public rather than private benefits and needs to be managed and funded accordingly. At the experimental development end of the spectrum the research is likely to generate more private benefits and have relevance to specific industries. It is generally the case that much of the applied research and experimental development related to plant biosecurity is carried out by state governments or by industry. Private R,D&E may also make a contribution to developing specific products for the purpose of control and management of plant pests and diseases. Basic research (and some applied research with broader application) in plant biosecurity has a broader national and international focus and, as a result, falls more to the Australian Government to coordinate, facilitate and manage. The research strategies and committees identified in Figure 3 are an acknowledgement of this responsibility. However, because the funding of R,D&E and the conduct of R,D&E are separated from the prioritisation and management of R,D&E it is difficult to trace this responsibility through to ultimate outcomes. Much of the plant biosecurity R&D undertaken has a strong industry focus that reflects the economic costs of pest and disease incursions. Less visible, and mostly with less vigorous stakeholder support, are the risks to natural environmental assets and habitat from pest or disease incursions, which could devastate natural forests, wildlife and aquatic environments. Research P a g e 23

31 in these areas is almost exclusively for public benefit but often struggles to achieve prominence or to find consistent effort or adequate funding. Research conducted in universities and CSIRO in fields including plant pathology, microbiology, entomology and plant breeding make a contribution to the plant biosecurity R,D&E effort, although they are not always identified as such. There is also research undertaken by governments, universities and other organisations in areas including economics, risk management and operations management, which may not be defined as science but are a significant part of the plant biosecurity R,D&E effort. The funding of plant biosecurity R,D&E is poorly documented and a picture of the overall source and application of funds is difficult to assemble. The National Plant Biosecurity Status Report 2014 (PHA, 2015) provides a list of more than 550 projects that aim to improve plant biosecurity in Australia, with more than half of these projects targeted at the management of a single pest, and many projects more correctly characterized as extension or industry awareness projects. Most plant biosecurity R,D&E projects are funded by a range of collaborators. Funds are ultimately contributed by the Australian Government, state governments and from industry, but sourced from various government grants and allocations, and from industry levies and corporate contributions that pass through RDCs, universities, CRCs and government departments before the research occurs and outcomes are generated. Recent experience has shown that it is impossible to determine, within reasonable bounds of accuracy, the amount of money expended on agricultural R,D&E as a whole. As is evident from the above, the complications involved in determining the expenditure on plant biosecurity R,D&E are even more daunting. For the most part, the Australian Government s responsibility to ensure there is adequate investment in high public-benefit plant biosecurity R,D&E has been vested in the CRC for National Plant Biosecurity and its successor the Plant Biosecurity CRC (the PBCRCs). The following sub-section describes the R,D&E that the PBCRCs have supported. 5.4 The research of the PBCRCs The PBCRCs have focused on the higher-level R,D&E that underpins Australia s national plant biosecurity system. While most industry-specific plant biosecurity R,D&E is undertaken by state departments of agriculture or industry organisations, often with funding support by the relevant RDC, the CRCs have focused on strategic basic and applied research projects that have wide application across industries or regions, or address systems for management of surveillance and outbreaks of pests or disease. These projects also typically provide the opportunity for postgraduate students to gain training and experience, and hence have an important industry capacity development function. P a g e 24

32 Table 3 Programs and program objectives of plant biosecurity CRCs Plant Biosecurity CRC ( ) 1. Early Warning Improve biosecurity decision-making through the development of practical tools and approaches to help decision-makers better anticipate and respond to future threats. 2. Effective detection Develop new technologies and methodologies to improve the detection and identification of exotic pests and improve pest incursion response. 3. Safeguarding trade Conduct analysis to assist industry and government to meet quarantine requirements for trade and develop improved systems for managing pests of quarantine concern. 4. Secure future Improve responses to biosecurity threats by identifying how policy, industry and community systems interact with biosecurity research and changing research investment behaviour. CRC for National Plant Biosecurity ( ) 1. Preparedness & prevention Support decision-making in biosecurity with increased knowledge of the ecology and epidemiology of emergency plant pests. 2. Diagnostics Decrease the impact and cost of eradication of plant pests through research that permits more rapid identification of the causative organism. 3. Surveillance Develop sampling and survey methodologies that enhance the ability to capture sound and reliable information on plant health. 4. Impact Management Develop strategies for managing pest outbreaks that will minimise the social and economic impact of emergency plant pest incursions. 5. Post-harvest Integrity Develop new technologies that will reduce costs in the post-harvest supply chain for grains or other products. 6. Education and training Providing support for PhD projects in plant biosecurity disciplines and vocational training for technical jobs in plant biosecurity. 7. Commercialisation and utilisation Facilitate delivery and commercial utilisation of the outputs of the CRC s projects. Note: while the current CRC does not identify as separate programs the investment in education and training, and the commercialization and utilisation of research outputs, there is a considerable investment in these areas as part of each of its four core programs. These nationally oriented and cross-sectoral projects are typically not undertaken by individual states or industries. Table 3 lists the Programs of the two CRCs and describes the content of each of their research programs. The new CRC reports that, to date, 14% of its research (by value of expenditure) has been on strategic basic research, 47% on applied research and 39% on experimental development. Expenditure to date by industry category is shown in Figure 4. These research priorities and allocations collectively reflect the priorities and research needs of its state government and industry participants and were set out in its investment plan at the commencement of the CRC. P a g e 25

33 Figure 4. Annual R,D&E investment ($m) to date by PBCRC by industry (Source: PBCRC Ltd Board Papers, March 2016) P a g e 26

34 The investment by the PBCRCs in research on stored grain pests and post-harvest management of grain is something of an exception to the role of the PBCRCs to undertake research that predominantly produces public benefits or has broad cross-industry application. This research comprises a portfolio of research and capability transferred from the CSIRO s former stored grain research laboratory, and related post-harvest grain research that principally benefits the grain storage and marketing sector rather than grain growers. The proportion of the budget devoted to this research in the original CRC is not known, but included at least 23 out of a total of 158 completed projects, or about 15% of the CRC s projects. The current CRC reports a cumulative investment of $53.8 million in post-harvest integrity and stored grain research projects at the end of , equivalent to 39.5% of its project expenditure. 5.5 Funding of the PBCRCs Table 4 shows the investment in the two CRCs by origin and type of contribution. Table 4. Total investment commitment in plant biosecurity CRCs by source type (Source: Commonwealth Agreements). CRC NPB ($m) PBCRC ($m) Combined ($m) Cash Commonwealth CRC Programme Cash Participants (committed) In-Kind Staff (committed) In-Kind non-staff (committed) The participants have contributed $198.6 million to the two CRCs to date (cash and in-kind) amounting to 76% of the total contributions toward research; a sum that each participant, individually, would not be able to undertake. Over the two CRCs to date the Australian Government contribution of approximately $33.5 million (24% of total contributions) has been leveraged up to a total investment of almost $261.1 million. This is an endorsement of the capacity of the CRC structure to generate collaboration between participants but more importantly shows the level of commitment among the participants to the importance of plant biosecurity R,D&E. The Australian Government s direct contribution under the CRC program administered by the Department of Industry, Innovation and Science, to date accounts for 24% of the total contributions to the CRC and 55% of the cash contributions. However, this underestimates the total Australian Government support for R,D&E undertaken by the CRC, since there are contributions by CSIRO, the Grains Research and Development Corporation, Horticulture P a g e 27

35 Innovation Australia Ltd and Plant Health Australia, all of which receive significant cash support from the Australian Government. It has not been possible to estimate the total Australian Government support received by the CRC, however attributing a share of the contributions from the four members identified above would add in excess of $1.5 million to the total annual contribution originating from the Australian Government. P a g e 28

36 6. The need for a permanent plant biosecurity R,D&E organisation A permanent organisation that funds and administers plant biosecurity R,D&E in Australia is required to address the following: The plant biosecurity strategies formulated by the Government and the coordinating roles of the various plant biosecurity committees will be unable to deliver the desired results without a structure that ensures the necessary R,D&E is undertaken. The plant biosecurity CRCs which have to date undertaken the role of managing the high public benefit and cross-industry plant biosecurity R,D&E are temporary structures that cannot provide a secure long term commitment to the R,D&E task. There is a substantial share of the Australian economy, its exports and many of its rural communities, as well as many of its environmental assets, that are at constant and arguably increasing risk from incursions of plant pests and diseases. Because of the diversity of pathogens, vectors and pests that threaten various plant industries there is a significant role for R,D&E that is focused on underlying biological mechanisms that will contribute to surveillance, detection and control across a range of pests and diseases and which will benefit many industries and complement industryspecific plant biosecurity R,D&E conducted by state government and the private sector. Because such R,D&E produces outputs that have a high proportion of public benefits, there is insufficient incentive for the private sector to establish and provide ongoing support for an organisation to manage the funding and oversight of R,D&E. Without a permanent commitment to plant biosecurity R,D&E, the technical skills needed in a range of research disciplines and in the operation of surveillance and diagnostic programs, as well as for maintaining incursion response strategies, will continue to decline and likely fall below the critical mass needed to be effective. The establishment of a central organisation for management of plant biosecurity R,D&E will likely have ancillary benefits in coordinating private sector involvement in plant biosecurity R,D&E and providing Australia with the capacity to engage in international collaborative research to better manage potential threats. These points are discussed in more detail below. 6.1 A complement to the plant biosecurity strategies Governments have developed and committed to a series of R,D&E strategies including those specifically addressing plant biosecurity R,D&E and natural biosecurity R,D&E, supported by implementation committees and committees of relevant senior departmental officers to coordinate plant and natural biosecurity activity. While some elements of the plant biosecurity effort can and are being undertaken by states and industry, other elements, especially those that P a g e 29

37 deliver high public benefits and that address large, national industries such as grain handling and marketing, require a combined national approach to funding and managing the R,D&E. In the absence of ensuring that this national plant biosecurity is adequately catered for, the overall effectiveness of plant biosecurity strategies and coordinating committees is compromised. In the period since the Beale Review, coordination and collaboration have been key themes in the evolution of the plant biosecurity system in Australia. The CRCs, the first of which commenced prior to the Beale Review, are completely in keeping with those themes and the participants, especially state governments, are reliant on the services they have provided. A return to the fractured, uncoordinated research efforts by individual jurisdictions and organisations would likely now be all but impossible: the facilities required for such work are no longer widely available, the skills required to manage and undertake the research have changed and are no longer widely available, and the funds that supported such work in the past have been redeployed. 6.2 The limitations of temporary structures. To date, management of plant biosecurity R,D&E projects which produce substantial public benefit or have cross-industry application have been managed by two successive Cooperative Research Centres. These have been successful in supporting nationally significant research projects for over a decade. However, CRCs are not intended to be permanent structures, nor to undertake long-term research programs. Because of their short-term focus, CRCs are unable to provide industry or government stakeholders with the assurance and continuity required to successfully pursue a long-term research task. CRCs do not provide a satisfactory environment for planning or completing projects that have very long time horizons, or for addressing those plant biosecurity risks that are constantly changing or are becoming progressively more severe. The long-term efficiency of the plant biosecurity system requires an ongoing commitment to researching biological systems, improved and broadly applicable surveillance and diagnostic methods and efficient incursion response methods. 6.3 Plant biosecurity risks are nationally significant. All of Australia s plant production agriculture the broadacre grain industry, horticulture, forestry industries, pasture-based livestock industries and Australia s natural environmental assets confront plant biosecurity risks. The extent of the threat is, in many cases, beyond the resources of state governments or local communities to manage and prepare for. Maintaining effective biosecurity protection has widespread benefits across the community. The threats that face these industries and assets are expected to increase over time rather than to diminish. Increasing levels of international trade and tourism add to the potential for pests and diseases to enter the country. Increasing intensity in agricultural production around the world also raises the risks associated with development and proliferation of pests and diseases. Waage et al. (2008) found that over the 20 th century the incidence of new plant fungal, bacterial and viral diseases appearing in Europe had risen from less than five to over 20 per decade. Bebber et P a g e 30

38 al. (2104) note considerable debate in the literature about the relative importance of various drivers of the proliferation of plant pests and diseases, but the relentless rise in their incidence and importance in agricultural countries is unequivocal. It is also in Australia s interest to maintain an ongoing national commitment to plant biosecurity R,D&E in order to benefit from international cooperation in responding to crop and horticultural pest risks. 6.4 Importance of cross-industry R,D&E. In the plant biosecurity field, more so than in animal biosecurity, it is important to focus significant R,D&E on underlying biological mechanisms by which plant pests and disease proliferate. Because of the number of pathogens and vectors, and different target species, it is more efficient to focus on research that can be applied to the biology of broad groups of pests and diseases, and to systems that can be used in the surveillance, diagnosis and control of multiple pathogens across a range of environments. R,D&E at this level is best conducted at a Australian Government level in collaboration with affected states and groups of industries. This has substantially been the manner in which the PBCRCs have operated, but to be thoroughly effective this R,D&E should be approached as a long-term undertaking. 6.5 High levels of public benefits. When the outputs of R,D&E are non-exclusive (when the outputs are provided to one party, other parties cannot be excluded from also reaping the benefits), or non-exhaustive (the outputs can be provided equally to one or a large number of recipients without diminishing the capacity to supply to others) it is accepted that private operators have insufficient incentive to invest. Without intervention by government the result is a long-term sub-optimal amount of investment in research that has these characteristics. A lot of plant biosecurity R,D&E is either nonexclusive or non-exhaustive, or both, particularly when focused at a higher level as discussed in the previous section. To provide for adequate investment in plant biosecurity R,D&E the Australian Government must address both the institutional arrangements that will facilitate efficient selection and management of appropriate R,D&E projects and provision of public funding sufficient to support an appropriate amount to R,D&E across the sector. 6.6 Maintaining technical and research skills After more than a decade of the CRCs effectively managing a national plant biosecurity R,D&E program, the coordination and collaboration within that program has circumvented the effects of, and underpinned, a rationalization of facilities and skills across the country. This has allowed effective R&D, surveillance and diagnostics programs to be maintained with fewer resources than were required in the past. To wind back the clock and return to individual jurisdictions operating independently is no longer a practical reality and would run counter to all of the biosecurity and R&D strategies of the Commonwealth and the states. P a g e 31

39 The plant biosecurity CRCs and their research programs have provided a focus for maintaining a core of critical research skills and facilities, through a period when funding of research in the relevant disciplines has declined across all jurisdictions. The CRCs have also taken on a responsibility for funding postgraduate programs to encourage students to develop the high-level skills required in plant biosecurity science and research. If Australia cannot develop a permanent structure through which to coordinate, fund and manage a national plant biosecurity research program, it is likely that this skill development role will be lost, the critical mass of science and research skills will be dissipated and Australia will lose the capacity to support its biosecurity system with high-quality scientists and R&D. 6.7 Ancillary benefits. Industry has shown that it is willing to co-invest in plant biosecurity R,D&E because it recognises the risks associated with pest and disease incursions, even though there is insufficient incentive for producers or industries to undertake the research alone. An Australian Government sponsored organisation with responsibility to facilitate and manage plant biosecurity R,D&E would be well placed to encourage and receive contributions from industry to support R,D&E which otherwise may be undertaken. A critical component of the preparedness of plant biosecurity system is the collaboration that occurs with international agencies to identify and study pest and disease organisms and their vectors in countries in which they are endemic. Australia has neither the resources nor the local knowledge to undertake this work. International collaboration is crucial to maintaining a viable, global plant biosecurity system and effectively protecting Australian industry and the community from biosecurity threats. Australia s ability to participate in this international collaboration rests on maintaining a domestic research effort that can utilize foreign research outputs as well as contribute to the accumulation of knowledge in the relevant fields. The CRCs have fulfilled this role over the past decade and continued participation in international collaboration will be most effectively pursued through a national, Australian Government sponsored plant biosecurity research organisation. P a g e 32

40 7. International agricultural biosecurity models. The challenge of maintaining biosecurity standards and preventing invasive species or diseases from damaging national agricultural and environmental assets is one faced by all governments internationally. This challenge is particularly important for nations that are significant exporters of agricultural products, as international markets are particularly sensitive to biosecurity risks, and market access can be lost overnight in the event a biosecurity breach occurs. In considering future biosecurity management and research policies for Australia, it is therefore instructive to examine models that have been implemented internationally. Two nations that have some similarities with Australia in their reliance on agricultural export markets are Canada and New Zealand. Canada is a major agricultural exporting nation and has a federal system of government that is similar to the Australian system, so may provide some useful insights. New Zealand is highly dependent on agricultural exports and relies very strongly on its biosecurity standards; it may be considered near to international best practice in relation to agricultural biosecurity. 7.1 Plant biosecurity in Canada. Canada, like Australia, has an agriculture sector that is heavily dependent on agricultural exports, and which has increasingly relied on the perceived safety and integrity of its agricultural exports over recent decades to secure higher value markets. Unlike Australia, however, Canada has an extended land border with the USA, and hence faces different biosecurity challenges than is the case for an island continent like Australia. In many respects, the Canadian agricultural biosecurity system is very closely linked to the US agricultural biosecurity system. The system of government in Canada is a federal one, very similar to that which operates in Australia. Canada consists of ten provinces (Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Prince Edward Island, Quebec, and Saskatchewan) and three territories (Northwest Territories, Nunavut, and Yukon). The Canadian Government has responsibility for international trade relations, national biosecurity standards, the majority of agricultural research and development funding, and national farm policy as it relates to farm financial support and other programs. Broad science and technology policy in Canada is set by Industry Canada, a Canadian Government department. There are a number of funding bodies within this Department which provide research funding in broad economic areas, such as Sciences and Engineering, Health Research, Social Sciences and Humanities, consistent with national priorities. The same situation applies at the Provincial level. The agriculture sector is able to tap these funding sources, although more likely to receive support at the provincial level via funding provided by provincial governments to universities. As is the case in Australia, there is concern that this system favors academic research over industry-initiated R,D&E, and reconfiguration is underway to achieve more demand-driven applied research better able to serve business needs (OECD, 2015). P a g e 33

41 Most of the Provincial and Territory governments have agriculture departments that have responsibility for some research and development activities, extension and advisory services, and on-ground activities associated with implementing biosecurity standards and systems. Over recent years, several provincial governments have either consolidated their agricultural research stations and capability to a small number of sites (Alberta), or discontinued their in-house R,D&E activities and outsourced this to relevant provincial universities (Ontario and Quebec). The majority of agricultural research and development activities in Canada are carried out by approximately thirteen universities and colleges, and by Agriculture and Agri-food Canada (AAFC), the federal agricultural agency which has approximately twenty agricultural research stations spread across Canada. Strategic direction and coordination of agricultural R,D&E in Canada arises via a complex array of industry consultative committees at both the national and provincial level. The AAFC has established seven commodity-based R,D&E strategies, these being; Forages and Beef; Cereals and Pulses; Oilseeds; Horticulture; Dairy, Swine, Poultry and other livestock; Bioproducts and Agri-food. There are also two other cross-cutting strategies, namely; Agroecosystem productivity and health, and Biodiversity and Bio-resources. The AAFC encourages collaboration across industry, academia and government in implementing these strategies. At the provincial level, R,D&E directions are largely driven by a focus on achieving farm profitability, sustainable resource use and the adoption of new technology. The dominant funder of agricultural research and development in Canada is the Canadian Government. It has historically contributed approximately 75% of total government funding for agricultural research and development, with the balance funded by Provincial and Territory Governments. Unlike most developed nations, total public expenditure on agricultural research and development in Canada has slowly increased in nominal terms over the period since 1990, although research intensity (R,D&E investment as a proportion of agricultural GDP) has declined. The OECD estimates that Canadian public agricultural R,D&E intensity is approximately 2.4%, compared to approximately 1.8% in Australia. Some funding for agricultural R,D&E is derived from mandatory levy (Check-off) arrangements, the majority of which are implemented at a provincial level. These levies are typically used to fund marketing and promotion, R,D&E, communications and organisation operations. One national example is the National Beef Checkoff which involves a mandatory levy of $C 1 applied on all cattle sales, and which results in the collection of $C 8 million annually. While aggregated data are not readily available, it appears that the total level of funding collected via levies is much less than is the case in Australia, and only a part of this is allocated to R,D&E. Responsibility for Canadian biosecurity lies with the Canadian Food Inspection Agency (CFIA) which, despite its name, has responsibility for both biosecurity and food safety. The CFIA reports to the Minister of Health. The CFIA also has responsibility for approvals associated with the introduction of genetically modified organisms. P a g e 34

42 The CFIA is both the organisation that develops and implements standards associated with food safety and animal and plant biosecurity, as well as the inspection agency with responsibility for enforcement and export certification. It has more than 6,000 employees, and its most recently published operating budget exceeded $C 800 million. The legislative framework in relation to plants is the Canadian Plant Protection Act. Under the Act, the Agency develops and implements policies and programs to prevent and manage the introduction of invasive plants (weeds), pests, and diseases that pose a hazard to Canada s plant resources and the economy. The purpose of the Act is to protect plant life and the agricultural and forestry sectors of the Canadian economy by preventing the importation, exportation and spread of pests and by controlling or eradicating pests in Canada (Auditor General of Canada, 2008). Given the disparate nature of the different agriculture sectors and agencies involved in agriculture and biosecurity in Canada, the Canadian Government developed a national Invasive alien species strategy for Canada in This initiative was led by the Environment Department, with CFIA given responsibility for invasive plants and plant pests. This strategy involved all levels of government within Canada, as well as industry, academic institutions and non-government organisations. It included measures to strengthen biosecurity preparedness and responsiveness, and action plans endorsed by all parties in order to implement the various initiatives. The Canadian Government allocated $C 85 million over five years to support actions identified in the strategy. There does not appear to have been any subsequent funding allocated to this strategy after The funding was also used to support projects initiated by stakeholders to raise awareness, increase surveillance, or eradicate existing infestations of various pests. This initiative, and the overall efforts to manage risks to Canada s plant resources were reviewed in 2008 and very strongly criticised by the Canadian Auditor General (Auditor General of Canada, 2008). Key criticisms related to the timeliness of risk assessments, coordination of information and low surveillance standards. Subsequent academic analyses (see for example Smith et al 2013) have criticised the lack of co-ordination between the respective agencies and governments with responsibility for plant biosecurity. A contrary view (McLean, 2015) is that while national coordination may not have developed in a formal sense, each of the provinces now has an Invasive Species Council (which was not the case in 2005), and the formation of the Canadian Council on Invasive Species in 2012 has provided a vehicle for national coordination and information sharing, although this organisation does not appear to have significant resources. In summary, Canada does not appear to have developed any specific national strategic policies in relation to plant biosecurity or plant biosecurity R,D&E, and subsequent to the cessation of funding for projects under the national invasive species strategy of 2004, plant biosecurity R,D&E appears to have been incorporated in the more general biosecurity R,D&E strategies of Agriculture and Agri-food Canada. No doubt the presence of a long land-border with the relatively biosecure USA to the south, and the presence of the arctic region to the north provide Canada with a degree of protection from invasive species meaning that efforts to manage such threats are less intense than may otherwise be expected. P a g e 35

43 7.2 Plant biosecurity in New Zealand. New Zealand has a number of similarities to Australia in relation to biosecurity. Being an island nation without any land borders, and located a long distance from other nations, biosecurity risks arise mainly from the movement of freight and people to and from New Zealand, rather than from the movement of plant seeds or animals across porous land borders. An additional similarity to Australia is the strong dependence of the New Zealand agricultural sector on access to export markets, and the extra value that New Zealand derives from its image as a source of safe and biosecure agricultural products. In contrast to Australia, however, New Zealand only has two levels of government (national and local) meaning that the implementation of national policies or strategies is not hindered by the need to first obtain the agreement of state governments. The New Zealand biosecurity system is a key responsibility of the New Zealand Ministry for Primary Industries (MPI), which has the protection of New Zealand from biological risk as one of its four key objectives. The significance of biosecurity for the Department (and New Zealand) is very evident from the focus that is given to the issue, and the science associated with it, in the many strategic plans and reviews that are regularly carried out in relation to this issue. In recent times, the foundation document directing biosecurity-related activities in New Zealand has been the Biosecurity Strategy of 2003 (Government of New Zealand, 2003). The strategy was developed in recognition of the growing threats to New Zealand s agricultural and environmental resources due to increasing tourism and trade, and the risks for both the tourism and agriculture sector if biosecurity standards were not maintained. The 2003 strategy document set an overall direction for biosecurity, and also; identified areas of priority for biosecurity programmes applied to primary production (agriculture, horticulture, forestry), public health, and indigenous terrestrial, marine, and freshwater environments provided guidance to all involved in biosecurity, and included initiatives aimed at raising public awareness and understanding of biosecurity. The strategy applied to all of New Zealand, all environments (land, freshwater and marine), and to both indigenous and valued introduced flora and fauna. It also had regard to international obligations. It took into account the interests of central and local government, Māori, and all relevant sectors, including environment, primary production, public health, trade, travel, and science and research. The 2003 Biosecurity Strategy identified key expectations for biosecurity science, identified the need for more effective investment in biosecurity science, and sought to engage the science community more strongly in biosecurity decision-making. In response to the identified importance of science in maintaining biosecurity, the New Zealand Government developed a strategic document entitled A biosecurity science strategy for New Zealand in 2007 (Government of New Zealand, 2007). P a g e 36

44 The Strategy identified a number of challenges for the current biosecurity system. Those challenges included the need to: prioritise science needs; minimise biosecurity risks at the earliest stage possible by increasing focus on research that is strategic and proactive; improve planning, integration and communication in the delivery of science; ensure research outputs can be used effectively; and improve biosecurity operations and decision-making. As well as identifying science needs and priorities, the Strategy outlined a fundamental change in the way that biosecurity science is prioritised and directed. It outlined a biosecurity science system that aimed to provide clear advice on priorities to all those involved in biosecurity science. The system aimed to regularly review and identify research priorities as well as advising on implementation of research outputs. The Strategy identified three key areas as needing development. These made up the three high level goals of the Strategy. These goals, and the objectives and actions that have been identified to help achieve them, were intended to guide all government agencies and biosecurity stakeholders in decision making about biosecurity science. Goal 1: Science direction. To clearly identify and address research needs. Goal 2: Science delivery. To build and maintain biosecurity science capability and capacity in priority areas. Goal 3: Science uptake. To ensure that uptake of science is timely and effective. Funding to implement the Strategy was divided between the New Zealand Government core science funding organisation (for more fundamental and long-term research activities) and the Ministry of Primary Industries (for research into operational level biosecurity issues). The Strategy also incorporated review processes over extended timeframes. Under the Strategy, a list of priority research areas is prepared, and these are updated periodically. While not specific to plant biosecurity research, the priority research list provides a strong focus for the research activities of a number of different research funders and providers within the New Zealand biosecurity research system. Specific responsibilities for resourcing biosecurity science in New Zealand were incorporated as part of the Strategy, and can be observed in the following table. As is evident from the table, the Strategy incorporated responsibilities for each level of government and for industry. P a g e 37

45 Table 5. Responsibilities for resourcing biosecurity research under the 2007 New Zealand biosecurity science strategy. (Note: The Ministry of Agriculture and Forestry is now the Ministry for Primary Industries (MPI)) The New Zealand Government has recently announced a comprehensive review of this strategy Biosecurity 2025 commencing with an independent review of current arrangements and the development of a draft directions statement. In announcing the review, the Minister stated: The project, Biosecurity 2025, will update and replace the founding document of New Zealand s biosecurity system, the 2003 Biosecurity Strategy, with broad input from stakeholders, iwi and the New Zealand public. Government and industry have set a goal of doubling the value of our exports by 2025, and an effective biosecurity system is fundamental to achieving this, P a g e 38

46 That is why biosecurity is my number one priority as Minister, and why the time is right to take a longer term view. Since last year, I have been discussing with officials the need to better prepare ourselves for future biosecurity threats, challenges and opportunities (Guy, 2015). The agricultural innovation system in New Zealand has many similarities with that of Australia, although also has some major differences. The former Ministry of Agriculture (now Ministry for Primary Industries) has a similar role to the Ministry of Agriculture and Water Resources in Australia. Key science providers include the seven Crown Research Institutes (Agresearch, Plant and Food Research, ESR (a general environmental and epidemiological science agency), GNS Science (specializing in earth and geoscience research), Landcare research (focused on natural resource sciences), NIWA (environmental and climate science), Scion (forestry), and Science New Zealand, (a national coordinating body). Callaghan Innovation provides science and technology expertise and R&D grants. All of these have some involvement in various aspects of biosecurity research activities. The other key research providers are the eight New Zealand universities (Auckland University of Technology, Lincoln University, University of Auckland, University of Canterbury, Massey University, University of Otago, University of Waikato, Victoria University of Wellington). There are a number of important organisations involved in science investment in New Zealand. Two of particular importance are the Centres of Research Excellence (CoREs) and the National Science Challenges (NSC). The CoREs were established in 2001 to encourage the development of excellent tertiary education-based research that is collaborative, strategically focused and creates significant knowledge-transfer activities. They are inter-institutional research networks, with researchers working together on commonly agreed workplans. The CoREs are funded through the Tertiary Education Commission. One of the ten CoREs is specifically focused on biosecurity The Bio- Protection Research Centre hosted by Lincoln University. As explained by the Centre, The Bio- Protection Research Centre is finding innovative, natural and sustainable solutions to protect New Zealand s plant-based, productive ecosystems from pests, diseases and weeds. The NSC are designed to take a more strategic approach to the New Zealand s science investment by targeting a series of goals, which, if achieved, would have major and enduring benefits for New Zealand. One of these is New Zealand s Biological Heritage, which is a science challenge established to protect and manage New Zealand s biodiversity, improve biosecurity, and enhance resilience to harmful organisms. Better Border Biosecurity (B3) is a multi-partner, cooperative science collaboration that researches ways to reduce the entry and establishment of new plant pests and diseases in New Zealand. It is a key component of New Zealand s Biological Heritage. An important point to note about the Bio-Protection Centre, New Zealand s Biological Heritage and B3 is that they are P a g e 39

47 all multiple organisational groups including Government ministries/departments, research providers and industry. There are also three major levy-funded statutory organisations in New Zealand (Dairy New Zealand, Horticulture New Zealand and Beef and Lamb New Zealand) which receive compulsory levy funds from relevant farmers, and allocate these funds to a range of research, promotion and advocacy activities considered to provide an industry good. Biosecurity research funding is an important focus of the expenditure of these three organisations, with Dairy New Zealand, for example, reporting that it allocates 22% of its annual expenditure to biosecurity science although not all of this is plant biosecurity Government Industry Agreements (GIA) are a very important and emerging aspect of biosecurity management in NZ. GIA operate as a partnership between industry and government to manage pests and diseases that could badly damage New Zealand's primary industries, economy, and environment. They are agreements between the government and individual sectors in NZ with shared decision-making, shared governance and shared costs. At present there are seven sectors (Forest Owners, Pork, Kiwifruit Vine Health, Onions, Pipfruit, Avocado, and Citrus) and MPI who have signed agreements. It is reported there is the potential for 30 such agreements and negotiations are underway for many of these, including dairy and livestock. The constant attention that the New Zealand agriculture sector and successive governments have given to biosecurity and biosecurity science highlights strong national recognition of how important biosecurity is to the ongoing success of the New Zealand agriculture sector. The recently announced Biosecurity 2025 review process reaffirms the significance of the issue, and the determination of New Zealand to take steps to protect the nation s biosecurity status in the future. What is also noteworthy about the New Zealand system is that many of the arrangements involve partnership arrangements between industry and multiple funding and research agencies. These arrangements obviously foster a much greater degree of collaboration, and while it might be argued that they also create cumbersome administrative arrangements, they do ensure that all relevant parties are committed and engaged in the issues. 7.3 Lessons for Australia. The two case studies provide a contrasting picture of government approaches to biosecurity, and biosecurity science, in nations with similar interests in maintaining biosecurity. Canada, with a federal government structure similar to Australia, has in the past developed a comprehensive national strategy to better coordinate and manage biosecurity (including biosecurity science) and that strategy resulted in important developments occurring in relation to surveillance and invasive species management, as well as an increase in research activities. It is also reported that the strategy has led to the establishment of a stronger focus on biosecurity issues at a provincial level. However, funding of projects under that strategy ceased in 2010, and it is likely that the priority accorded to biosecurity since that time has declined. The grants-based approach adopted under P a g e 40

48 that strategy was also heavily criticised by the Canadian Auditor General, who argued that despite the strategy, the performance of the Canadian Food Inspection Agency had not improved. New Zealand has an advantage in having fewer layers of government structure, which means that both the development and implementation of national biosecurity strategies is much simpler, and any strategy developed has very clear lines of responsibility. It is quite apparent that biosecurity is considered a very high priority by the New Zealand Government and agricultural sector, and this is reflected in the strong focus on the national strategy, the well-developed science strategy associated with it, and the continuing focus that is directed towards this issue via multiple, collaborative structures and organisations. There are parallels between the Canadian and Australian experiences in relation to biosecurity, in that the emergence and then dissipation of the national biosecurity strategy in Canada could be considered to be similar to the potential outcome at the conclusion of the current Plant Biosecurity CRC, in the event that no continuing national focus is directed towards these issues. In contrast, New Zealand appears to have adopted the mantra that the price of biosecurity is eternal vigilance, has directed considerable focus and resources towards these issues and continues to do so. P a g e 41

49 8. A preferred future model for plant biosecurity R,D&E. In this section, the options for the future management of plant biosecurity R,D&E in Australia are considered. The consequences of the do nothing and status quo options were assessed along with options for the creation of a new organisation to manage a portfolio of plant biosecurity R,D&E. The options considered were: 1. Do nothing Allow the current CRC to run the conclusion of its term, wind-up its research program and make no arrangements for co-ordinated national plant biosecurity R,D&E. 2. New CRC Prepare an application for a third plant biosecurity CRC to succeed the current CRC. 3. Plant Biosecurity RDC Request the Australian Government to create a statutory RDC under the Primary Industries Research and Development (PIRD) Act. The RDC would receive Australian Government funding to undertake plant biosecurity R,D&E that delivers a high proportion of public benefits that otherwise would not occur. The RDC should also have the ability to operate programs on behalf of third party stakeholders (industry or states) that would attract matching Australian Government funds (in a similar manner to RIRDC industry programs). 4. RIRDC plant biosecurity program Request the Australian Government to provide additional funds to RIRDC to undertake a program of plant biosecurity R,D&E that delivers a high proportion of public benefits that otherwise would not occur. The program should also be enabled to accept contributions from third party stakeholders for R,D&E projects that would deliver significant private or industry benefits which should qualify for matching Australian Government funding. 5. Plant Biosecurity Research Corporation Request the Australian Government, state governments and relevant RDCs to create a jointly owned research corporation for the purpose of undertaking plant biosecurity R,D&E on behalf of all of its stakeholder members. Each member would contribute funds on an agreed basis to support publicbenefit and industry-benefit plant biosecurity R,D&E programs. The corporation would have the capacity to accept third party contributions to support specific projects and operate in a manner similar to the PIRD RDCs having a board responsible for governance and determining research priorities, and contracting with research providers to undertake research and deliver specified outputs. It is possible to conceive of a myriad of other options for structures that could undertake or manage a plant biosecurity R,D&E program. The options outlined above were selected as those P a g e 42

50 with the most chance of being effective in delivering outputs, with reasonable prospects of being acceptable to government and which could be expected to continue for an extended period. Options which placed the responsibility for plant biosecurity R,D&E within an existing or new research provider were considered and rejected, as such options are considered to be less effective in determining research priorities, less well placed to attract external funding and less efficient in retaining the best research providers for each project. In particular, consideration was given to placing the responsibility for plant biosecurity R,D&E with either PHA or CSIRO, but it is considered that these options would be less effective than those outlined above. PHA has participation from all the relevant levels of Government and has experience in engaging with industry in developing industry strategies and programs. However, PHA s objectives and focus are on operational programs for maintenance of plant health and incursion management, and it has built its membership structure around this function. Measured in terms of its budget, PHA is approximately one-fifth the size of the current CRC. While PHA has some features that could be suited to an R&D management role, its current structure is not well suited to the management and governance task associated with a $25 million per annum plant biosecurity R&D portfolio. In addition, the size of the R&D program would be difficult for PHA to absorb under its current structure and it is likely to be difficult for the current organisation to balance the two functions and manage the different skills and drivers inherent in these functions. CSIRO clearly has credibility as a research provider. However, while CSIRO has demonstrated expertise as a contract research provider to the private sector, structures such as the RDCs and CRCs have proven to be more effective at long-term engagement with industry. CSIRO also lacks the independence to transparently select the best researchers and facilities for each project. CSIRO already has a very diverse research agenda and by divesting itself of responsibility for the Stored Grain Research Laboratory has indicated that it does not consider plant biosecurity R&D as a stand-alone part of its core business. For the purposes of developing the options it is anticipated that the plant biosecurity R,D&E task would require research expenditure at least equal to that of the existing CRC (approximately $25 million per annum) in areas including surveillance, diagnostics, trade facilitation and capacity building. This would involve a commitment of approximately $8 million annually from the Australian Government, $8 million collectively from State and Territory governments, and approximately $8 million per annum from industry, through the allocation of some of the existing R&D levies contributed to plant industry RDCs. However, the final decision on funding will be subject to decisions about the scope of the organisation s R,D&E in areas including involvement in weeds research, continued involvement in grains related research, and involvement in animal biosecurity R,D&E. P a g e 43

51 Each of the options described above are assessed in the following sub-sections against five criteria: Effectiveness Capacity to manage a complex R,D&E program and deliver high net benefits for the community. Stakeholder attractiveness ability to continue to attract key stakeholders to commit funds and resources to support the R,D&E program. Structural resilience prospects of making a long-term contribution to plant biosecurity R,D&E Industry support prospects of attracting and maintaining strong plant industry support. Government support prospects of attracting and maintaining government support and involvement. 8.1 Do nothing If no arrangements are made for coordinating and funding plant biosecurity R,D&E after the end of the current CRC there will likely be no significant R,D&E effort aimed at protecting against the biosecurity risks confronting Australia s annual $30 billion of plant industries output. There would be little opportunity for at-risk stakeholders to invest in R,D&E to mitigate those risks. Prior to the creation of the CRCs, successive reviews had noted the chronic underinvestment in plant biosecurity R,D&E; in the absence of concerted action Australia would likely return to a situation of negligible investment in this field. It is likely that the public benefit derived from the relatively small reduction in government spending as a result of not continuing to invest in plant biosecurity R,D&E would be outweighed by the increased risk of serious loss of output and confidence in Australia s food production capacity arising from incursions of plant pests and diseases. If, as is anticipated, this option resulted in the decline of Australian plant biosecurity R,D&E capacity, the nation s ability to collaborate in international plant biosecurity R,D&E would be compromised. It is highly likely this option would result in the loss of current Australian Government funding ($6-8 million per annum) and also the loss of funding from states and industries that has been able to be leveraged by the availability of the Australian Government funding. P a g e 44

52 8.2 New CRC An alternative default scenario is for an application to be made to the Australian Government to establish a third plant biosecurity CRC, to succeed the current CRC. The prior and current CRCs have been effective in managing a portfolio of R,D&E and, if approved by the Australian Government would likely attract significant support from interested stakeholders, including state governments and industry. By their nature CRCs are temporary and a third CRC would further defer a solution to the need for a permanent means through which to fund and manage R,D&E that mitigates Australia s plant biosecurity risks. There is a significant likelihood that the Australian Government would not entertain an application for another CRC under the current 10-year rule. In the absence of a plan to cover this contingency, the outcome may be similar to that described in 8.1 above. Perhaps the only argument in favour of this option, should it succeed, is that the fiscal environment for creating a permanent plant biosecurity structure may be more favourable at the end of the third CRC than it is at present. 8.3 Plant Biosecurity RDC A plant biosecurity research and development corporation created under the PIRD Act and following the governance and management processes of the established RDCs would be well equipped to manage a complex plant biosecurity R,D&E portfolio. It is anticipated that core funding from the Australian Government would provide for administrative costs and for funding R,D&E projects expected to deliver a high proportion of public benefits research that would not otherwise be undertaken by private interests or individual state governments. It is also anticipated that the RDC would be well placed to attract ad hoc funding from state governments and industry (or groups of industries) to undertake R,D&E that would deliver benefits specific to those stakeholders. It is anticipated that these contributions would qualify for matching funding from the Australian Government in a manner similar to the industry programs managed by RIRDC. The creation of an RDC has the advantage of employing a structure and operating model that has proven effectiveness and resilience. It is anticipated that a plant biosecurity RDC that succeeded the current CRC would be able to establish good relationships with existing industry RDCs and be well placed to attract funds for plant biosecurity R,D&E relevant to the risks facing those industries. P a g e 45

53 This option would transfer ministerial responsibility for plant biosecurity R,D&E from the industry portfolio to the agriculture portfolio and should ensure that it is more appropriately managed as a long term commitment. Potential disadvantages of this option are: o It would require amendment to the PIRD Act. o The model does not specifically provide for state governments to make long-term funding commitments to plant biosecurity R,D&E in areas such as surveillance and diagnostics, from which they are significant beneficiaries. o The Australian Government may not favour creating an additional RDC and funding the administrative overheads in addition to the outlays for R,D&E. In the current fiscal environment it is likely to want to minimise any uncertainty about the annual budget costs required to meet matching funding commitments. 8.4 RIRDC plant biosecurity program The Rural Industries Research and Development Corporation (RIRDC) currently manages a range of industry-focused R,D&E programs and public-benefit focused programs that should provide a strong footing on which to base management of a plant biosecurity R,D&E program. RIRDC s experience in managing its diverse portfolio of R,D&E programs indicates it has the capability to attract resources from external stakeholders and maintain productive relationships with those stakeholders. RIRDC is incorporated under the PIRD Act and has consistently met its performance and governance targets and has established itself as sound administrator of a diverse range of R,D&E programs. RIRDC maintains the support of a range of industries for which it manages R,D&E programs and there are no indications that it would be unable to secure the wider industry support needed to undertake plant biosecurity R,D&E. The Australian Government would likely see benefit in positioning plant biosecurity R,D&E within RIRDC because it would avoid incurring the additional overhead costs of establishing a new corporation or other organisation by leveraging an existing structure, governance and expertise. Transferring ministerial responsibility for plant biosecurity R,D&E from the industry portfolio to the agriculture portfolio should ensure that it is more appropriately managed as a long term commitment. P a g e 46

54 The potential disadvantages of establishing a plant biosecurity program within RIRDC are: o RIRDC does not presently have staff expertise or consultative structures suited to the existing plant biosecurity R,D&E programs and would need to establish this capability. o Absorbing the existing plant biosecurity R,D&E ($30 million p.a. including inkind) would more than double the size of RIRDC s investment portfolio ($20 million p.a. program expenditure), creating significant growth challenges for the organisation and potentially diminishing the focus on its current core responsibilities. o The model does not specifically provide for state governments to make long-term funding commitments to plant biosecurity R,D&E in areas such as surveillance and diagnostics, from which they are significant beneficiaries. o The RIRDC Board and management already have a broad range of divergent interests to manage, and despite the quality of the personnel involved, it would be inevitable that plant biosecurity research activities would attract a lesser focus than would be the case in a single-focus structure. o The RIRDC is currently being relocated from Canberra to Wagga Wagga, and is likely to experience significant staff and administrative disruption over the next few years, just as the integration of plant biosecurity R,D&E programs would need to occur. 8.5 Plant Biosecurity Research Corporation A new Plant Biosecurity Research Corporation would have a clear and singular focus on the R,D&E portfolio under its control, but would face the challenge of building new governance, consultative arrangements and staff expertise in order to be effective in delivering the anticipated net benefits. The key stakeholders (Australian Government, state governments and relevant plant industry organisations) having negotiated the terms of their involvement and funding of the corporation (a robust starting point would be one third funding from each of these) would be bound to the organisation, providing it with long-term security of participation and funding. It is anticipated that a corporate structure which engages interested stakeholders and which establishes good governance and consultative arrangements should be robust and resilient, and capable of sustaining a long-term commitment to plant biosecurity R,D&E. P a g e 47

55 It is anticipated that the structure would draw on some of the structural strengths of both the CRC model and the RDC model and while no stakeholder group would have a dominant equity or funding stake in the organisation, industry organisations could be expected to support the structure and share in the net benefits it delivered. The proposed research corporation would be expected to engage many of the key stakeholders in the existing CRC and secure their commitment to sustaining a plant biosecurity R,D&E effort that responds to the risks facing the plant industries. It would share the financial cost of the R,D&E on an agreed basis that reflected the relevant risks and responsibilities. The potential disadvantages of establishing a plant biosecurity research corporation are: o It is not expected that the corporation would require enabling legislation either by states or the Australian Government, but may require an intergovernmental agreement between the Australian Government and state governments to bind their ongoing involvement. o Although the proposed cooperative corporation draws elements from other models for government involvement in R,D&E and engagement with industry, the structure is novel and would require more effort, from all parties, to negotiate and become comfortable with the terms of involvement. P a g e 48

56 9. A preferred future model. The discussion paper detailing the above options was circulated to industry and made available for stakeholder comment, either in response to specific questions or via a free-form response. Some 46 organisations or individuals responded, and a summary of their responses is provided in the appendices. Some of the main responses were as follows; Approximately 80% of those who responded agreed that the conclusion of the current PBCRC in 2018 will result in a gap in plant biosecurity R,D&E capacity and capability. There was strong support for the scope of any future plant biosecurity R,D&E management structure to also encompass weeds and environmental biosecurity R,D&E, but considerable uncertainty about the inclusion of animal biosecurity R,D&E. Of the possible options for a future plant biosecurity R,D&E structure, the strongest level of support was expressed for the stand-alone Plant Biosecurity Research Corporation (23%), followed by None of the above (21%), a Plant Health Australia model (17%), RIRDC model (13%), while all other options were supported by 8% or less of the respondents. It was evident from the responses that current organisational responsibilities are poorly understood, and that many of the respondents were seeking greater clarification about the scale and scope of any proposed organisation. Industry representatives and RDCs generally do not support the establishment of a new entity, preferring to utilise current structures, whereas more governments were in favour of a new entity. There was a strong desire expressed by many respondents to ensure that a future structure has both the capacity and resources to deliver a long-term outcome for the plant industries. The responses highlighted that there are some pervasive misconceptions about current structures and responsibilities. A frequent comment was that current PBCRC projects and associated resources only account for approximately 15% of the total identified plant biosecurity R,D&E efforts in Australia, based on the annual PHA National Plant Biosecurity Status Report, and therefore the conclusion of the current CRC will not leave a significant gap in plant biosecurity R&D. This statistic is somewhat misleading, however, as many of the projects included in the PHA review are not research projects, but involve extension activities. It is also noteworthy that many of the projects that involve actual research which are conducted by other organisations are, quite understandably, specific to a particular pest or plant species. The focus of the PBCRC research portfolio has always been on cross-sectoral and strategic research, and where there are clear gaps of national P a g e 49

57 importance (e.g. post harvest grains). Cross-sectoral projects make up only 24% of the total projects in the PHA Report, and virtually all of these are PBCRC projects. Reinforcing this, 80% of respondents to the discussion paper supported the view that the completion of the current CRC would result in a gap in plant biosecurity R&D activities and future capacity, in the absence of a successor structure. The role of the PBCRC is to conduct cross-sectoral and strategic long-term research, rather than the pest-specific or commodity specific research projects currently carried out by the various organisations included in the review. Longer-term, cross-sectoral projects focus on more blue sky solutions to biosecurity challenges, and also provide the opportunity to engage postgraduate researchers and hence perform an important industry capability building function that is not possible in the case of short-term projects which are of relatively small scale. A second issue commonly raised is that creating a new or standalone structure would result in duplication and additional overheads, and that it would be preferable to utilise existing structures. While this is an entirely understandable sentiment, in reality the main overhead costs associated with a new service structure to manage an R&D portfolio are those associated with the board and staff members, and there are not a great number of scale-efficiencies available. Activities such as communications and IT management can readily be outsourced and scaled up or down as needed. The lack of substantial scale efficiencies for service organisations such as an RDC is evident from the observation that the fixed overheads of existing rural RDCs typically range from 15-20% of total expenditure, irrespective of the size of those organisations. A further point relevant to this issue is that a proposed research portfolio of the scale envisaged (approximately $25 million annually) would benefit from governance by a dedicated board, and is likely to be too large to simply tack on to an existing board s responsibilities, even if issues such as membership and ownership could be facilitated within an existing structure. By way of comparison, the total annual expenditure of Plant Health Australia is approximately $6.25 million, and of the RIRDC is $26.8 million. Industry groups also expressed concern about the potential need for new industry levies to support a future plant biosecurity R&D structure. This sentiment was expressed despite the fact that industry contributions to current PBCRC funding have come from existing RDC levy funds (contributed by participating RDCs) and not a separate industry levy, and there is no reason to suggest that this funding would not continue in the future. In effect, these industry funds have leveraged between $6m and $8m of Australian Government funding annually, as well as even greater contributions from state governments and post-farm industry participants. In the absence of these industry RDC funds being contributed to the PBCRC or its successor organisation, it is arguable that none of the Australian and state government contributions would have been made over the past decade, nor will they be made in the future. P a g e 50

58 A significant number of the responses expressed support for PHA to take over the role of the PBCRC and to manage a cross-sectoral plant biosecurity research program. There are a number of issues that need to be considered in relation to this proposal. The first is that while governments and relevant rural RDCs that would be expected to contribute funding for plant biosecurity R&D are currently members of PHA, so too are a large number of other industry organisations which have an interest in the issues but which would not be expected to be financial contributors to a future plant biosecurity research program. If PHA was to be the future organisation to manage plant biosecurity R&D, then internal structural change would be required to distinguish between those organisations which are members of PHA only, and those which are PHA members and are also contributors to the pool of funds used for plant biosecurity R&D. This also means that a separate board structure would be required, appointed via a process agreed by only those organisations which are contributors to the plant biosecurity R&D funding pool. An observation arising from this discussion is that it may in fact be simpler to create a separate structure for the plant biosecurity R&D organisation, noting that sharing of office facilities and administrative services may have some potential to deliver cost-efficiencies for both organisations. A second issue in relation to PHA is that while it currently manages a small number of research projects, the scale of the proposed future research portfolio would be considerably larger, and would necessitate a substantial upgrading of PHA staff capacity in order to appropriately manage this larger portfolio. This means that the implicit assumption of a number of submissions (that PHA could manage the future plant biosecurity R,D&E portfolio without incurring any additional costs) is incorrect. A number of discussion paper respondents suggested that the CSIRO or another existing research organisation could become the future management organisation for plant biosecurity R&D post A weakness with such a proposal is that the CSIRO is a research provider, rather than a research manager for the Australian plant industries. It would face a considerable conflict if it was to simultaneously carry out the role of managing a research program including the identification of industry priorities and the management of research project tenders while at the same time tendering to be awarded those projects. The long-standing structural separation that has existed for the delivery of rural R,D&E in Australia (whereby research procurers are separate from research providers) has developed in recognition of this, and there appears to be no logical argument available to overturn this. It is also reasonable to argue that the CSIRO does not have the administrative structures available to manage a portfolio of research projects on behalf of industry and government. The above analysis and discussion highlights that there are a number of different options available to ensure that, post the current Plant Biosecurity CRC, there is a continuing focus in P a g e 51

59 Australia on the research that is intrinsic to maintaining Australia s future plant biosecurity status, and maximising the value generated by Australian plant industries. Of the options considered, a stand-alone, single focus Plant Biosecurity Research Corporation appears to be the most promising. As a stand-alone structure, the potential exists for the creation of an organisation that is a true partnership between the Australian Government, state and territory governments and industry, and to which all contribute on an agreed basis that is secured by multi-year agreements. It may be argued that the current National Plant Biosecurity R,D&E Strategy provides an appropriate framework and structure for these issues, and therefore a stand-alone structure is unnecessary. However, a major weakness of the existing national strategy is that there is no capacity to implement the initiatives identified, and in fact since the strategy has been developed there has been a marked reduction in resources and capacity at a state and territory level. This has created the very real risk that the strategy will be little more than a piece of paper which is paid lip-service by its contributors, and which masks a significant reduction in national plant biosecurity capacity. A new, stand-alone structure not governed by the PIRD Act creates the opportunity to negotiate a complete partnership between the Australian Government, the state and territory governments and industry, in which all are involved in the development of strategies and initiatives, and most importantly to which all are committed via negotiated agreement to contribute financial resources under a rolling multi-year agreement. At first glance it might be considered that the effort involved in securing commitment and resources for such a structure would be a daunting prospect. However, a pragmatic approach under which each of the three parties contributes a third of the required resources, and which uses a gross value of production measure to weigh the relative contribution of states and commodity sectors (via their respective rural RDCs) has intrinsic appeal, and its simplicity would be likely to create a more robust and sustainable structure that would persist into the future. While the state and territory governments may initially baulk at the financial commitment, they are also potential beneficiaries in that the research funding from the corporation is likely to be directed to projects involving the CSIRO and state and territory government researchers, thereby helping to maintain capacity and resources at the national, state and territory level. An important aspect of such a proposed structure would be the capacity of that organisation to negotiate contractual and co-funding arrangements with private sector organisations, as has been the case with the current Plant Biosecurity CRC. The flexibility to negotiate these agreements, and potentially to benefit from future commercial revenue arising from successful research, is likely to be enhanced in a stand-alone corporate structure, rather than in a structure established under existing legislation. P a g e 52

60 In the event that a stand-alone corporate structure for plant biosecurity R,D&E is preferred, some consideration will be required of the relationship with Plant Health Australia, and the status of the current plant biosecurity national R,D&E strategy. Given that the national strategy is due to expire in 2016 and is therefore due to be revisited, the timing of current discussions about the future legacy of the Plant Biosecurity CRC is fortunate. 9.1 Next Steps This research paper and its findings have been prepared for consideration by the Board of the Plant Biosecurity CRC. A decision on whether to accept the preferred option outlined in this paper or to adopt one of the other options, or an alternative option, will be made by that Board. Subsequent to a recommendation being made, there will need to be further industry discussion and consultation with governments about the best way to manage the implementation of a preferred option for the future management of plant biosecurity research in Australia in the future. P a g e 53

61 10. References. Auditor General of Canada, Report of the Auditor General of Canada to the House of Commons. Chapter 4: Managing Risks to Canada s Plant Resources Canadian Food Inspection Agency. Office of the Auditor General of Canada. Abdalla, A, Millist, N, Buetre, B & Bowen, B. 2012, Benefit cost analysis of the National Fruit Fly Strategy Action Plan, ABARES report to client prepared for Plant Health Australia, Canberra, December, CC BY 3.0. Bebber, D.P., Holmes, T., David Smith, D., and Gurr, S.J. 2014, Economic and physical determinants of the global distributions of crop pests and pathogens, New Phytologist. May; 202(3): Government of New Zealand, Protect New Zealand: The Biosecurity strategy for New Zealand. Ministry of Agriculture, Forestry and Fisheries Biosecurity New Zealand. Government of New Zealand, A biosecurity science strategy for New Zealand. Ministry of Agriculture, Forestry and Fisheries Biosecurity New Zealand. Hafi, A, Addai D, Zhang K and Gray E, The value of Australia s biosecurity system at the farm gate. An analysis of avoided trade and on-farm impacts. Research by the Australian Bureau of Agricultural and Resource Economics and Sciences, June 2015 McLean B Invasive Alien Species in Canada: A coordinated approach. Environment Canada, February Murray, G. M., Brennan, J. P. 2009, The Current and Potential Costs from Diseases of Wheat in Australia, Grains Research and Development Corporation, Canberra. OECD, Chapter 7. The Canadian Agricultural Innovation System. In Innovation, Agricultural productivity and sustainability in Canada. A special report by the OECD. Primary Industries Standing Committee (National Primary Industries RD&E Framework), 2013, National Plant Biosecurity RD&E Strategy Schofield Robinson and EconSearch Pty Ltd 2002, The Risk and Economic Impact of Phylloxera in South Australia s Viticultural Regions Volume 1, Main Report, Phylloxera and Grape Industry Board of South Australia. Smith A, Bazely D and Yan N (2014). Are the legislative frameworks in Canada and Ontario up to the task of addressing invasive alien species? Biol. Invasions (2014) 16: Stansbury, C., McKirdy, S., Diggle, A. and Riley, I. 2002, Modelling the risk of entry, establishment, spread, containment, and economic impact of Tilleti indica the cause of Karnal bunt of wheat, using an Australian context, Phytopathology vol. 92, no. 3, pp P a g e 54

62 Waage, J.K., Woodhall, J.W., Bishop, S.J., Smith, J.J., Jones, D.R., Spence, N.J. 2008, Patterns of plant pest introductions in Europe and Africa. Agricultural Systems. 2008;99:1 5. P a g e 55

63 Appendix 1. The Australian rural research and development corporation model Australia s Rural Research and Development Corporations (RDCs) were established in 1989 by Federal Government legislation to commission research and development (R&D) relating to primary industries. The RDCs replaced the pre-existing research councils and committees, which had administered R,D&E programs and funds for a range of agricultural industries. Primary producers contribute to paying for the cost of the R&D and the administrative overheads of the RDCs through levies (mostly statutorily mandated) on the sale of rural products. Taxpayers, through the Federal Government also contribute funds to the RDCs, mostly by matching the industry levies up to a statutory limit of 0.5% of the gross value of industry production. The RDCs are important participants in rural R,D&E in Australia. In 2008/9 the 15 RDCs invested about $490 million in R,D&E, out of Australia s estimated $1.5 billion annual investment in rural research, development and extension, by the public and private sectors (Keogh and Potard 2011, Productivity Commission 2011). The structure of the RDCs has many strengths and the model is highly regarded in Australia and overseas. The RDCs have specific statutory objectives to: fund and administer R,D&E that will deliver economic, social and environmental benefits, achieve sustainable resource use, make more effective use of community and scientific resources and skills, and improve accountability for their expenditure on R,D&E. RDCs are corporations, governed by Australian Government corporations law and directed by boards that draw expertise from research providers, academics, industry, and the broader community. The RDCs do not own research facilities or conduct research, but they have considerable independence and flexibility to seek out and contract for the skills and resources needed to achieve the best research outcomes. RDCs operate collaboratively with a wide array of research providers in Australia and overseas. Most RDC R,D&E projects are jointly funded by industry and government, reflecting shared interests and a joint commitment to the research and the ultimate adoption of the resulting innovations. The breadth of engagement of RDCs with industry, government and research providers, the value of their stake in rural R,D&E in Australia, and their collaborative approach to funding and execution of R,D&E, places RDCs in a central and strategic position in directing and administering rural R,D&E in Australia. The joint funding from industry and the community is a crucial pillar of the Australian RDC structure. The nature of the benefits from much rural research is such that the private sector has insufficient incentive to invest in the research, even with the RDC structure that substantially overcomes free-riding within an industry. Without a community contribution, investment in P a g e 56

64 rural research in Australia would be far below the national optimum, and the Australian community as a whole would be less well off, with a less-resilient, less-productive, and lessdiverse food and fibre production sector; rural industries would be more likely both to underutilise and place at greater risk the country s considerable land and water resources. Nevertheless, experience has shown that sustaining the support of all stakeholders in the RDC structure will require a sustained effort in providing persuasive evidence to show that the funds have been well managed and that the investments have earned a satisfactory return. P a g e 57

65 Appendix 2. The Australian cooperative research centre model The Cooperative Research Centre (CRC) program was established in 1990 to improve the effectiveness of Australia s research effort through bringing together researchers in the public and private sectors with the end users. The CRC program links researchers with industry to focus R&D efforts on progress towards utilisation and commercialisation. The close interaction between researchers and the users of research is a key feature of the program. Research groups from universities and public research agencies across a range of disciplines are linked with users (typically but not exclusively private firms) that can apply research outcomes through commercialisation or other forms of adoption (a relevant distinction for CRCs focused on public good research).. Since the commencement of the program, there have been sixteen CRC selection rounds, resulting in the establishment of over 200 CRCs. The most recent selection round was in March CRCs operate across the manufacturing, information and social services, mining and infrastructure, agriculture, environmental services, and medical service sectors. A CRC is a company formed through a collaboration of businesses and researchers. A CRC must include at least one industry organisation and at least one research organisation. Participants include large and small business, industry associations, universities and government research agencies such as the Commonwealth Scientific and Industrial Research Organisation (CSIRO), and other end users. The CRC must operate as a company, generally with a full-time CEO and a board with an independent chairman. The industry and research participants in a CRC commit to cash and in-kind contributions toward addressing defined research objectives. The Commonwealth contributes additional funding to the CRC as determined on a case by case by the Minister. Since its inception, the Government has committed about $4 billion to the CRC program and participants have contributed around $12 billion in cash and in kind. CRCs are not permanent structures and recent policy changes do not allow government funding for more than 10 years. Some of the benefits of the CRC model are; CRCs assemble multidisciplinary teams from across research providers to address research priorities identified by end-users. CRCs provide a structure that facilitates collaboration across industry, academia, state government, consumers and industry associations. CRCs provide companies, including multinationals, with a structure through which they can access government funding support to collaborate with skilled researchers using high-quality facilities to address industry research needs. CRCs are accountable for delivering outcomes from their research programs. CRCs are based on agreed funding commitments from the participants, which provides certainty for the research partners and end-user partners. P a g e 58

66 CRCs provide a high standard of governance and research management skills and discipline. CRCs provide a mechanism for realising commercial opportunities from the research. CRCs foster development of research skills through direct support of postgraduate programs and more broadly with all levels of education and training system. P a g e 59

67 Appendix 3. Responses to the discussion paper. Australian Farm Institute draft discussion paper: A sustainable and nationally coordinated plant biosecurity RD&E for Australia Submission Analysis 2016 Prepared by Currie Communications May 2016 P a g e 1

68 2. Background As part of the Plant Biosecurity Cooperative Research Centre s Commonwealth Agreement, the organization has a commitment to develop an improved national RD&E system for Australia by the time CRC funding ceases in The National Plant Biosecurity Research Development and Extension (RD&E) Strategic Implementation Committee and Plant Biosecurity Cooperative Research Centre (PBCRC) project on A Sustainable Research Development and Extension System to Support National Plant Health sought to identify an agreed pathway to an enduring plant biosecurity RD&E model, which extends beyond the current 5-10 year approach. To achieve this, in 2015 PBCRC prepared discussion papers and invited broad consultation which confirmed across-the-board consensus of the urgent need to plan for a future system. This consultation identified that to support Australian agriculture in meeting its potential, protect production and protect our natural environment, the system must: Demonstrate leadership through a nationally coordinated single entity Have the authority to deliver on an agreed strategic direction Involve significant Commonwealth Government investment to guarantee collaboration Be cross-sectoral and cover the full biosecurity continuum Have strong international linkages Evolve without duplication in order to achieve outcomes Be agreed and actioned immediately To further this discussion and test these principles, PBCRC commissioned the Australian Farm Institute to develop an independent options paper outlining potential future models for a plant biosecurity RD&E system on which submissions were sought. This document provides an independent summary of the key themes highlighted in the submissions and will be considered in the development of a final paper by the Australian Farm Institute. This paper, and ongoing direct consultation with stakeholders, will provide the foundation for PBCRC s recommendation to the Commonwealth government in the second half of 2016 on future options to deliver smart biosecurity science that grows markets together. P a g e 2

69 3. Methodology A total of 46 submissions were received during the four weeks between Monday 11 April and Friday 21 May. Submissions are publicly available, unless confidentiality was requested. The submission process featured three different options to submit: 1. Completion of an online submission form 2. Download of submission form and return via 3. Free form submission Respondents represented stakeholders from across the agricultural plant biosecurity RD&E spectrum, and the online questionnaire was structured to discover attitudes, knowledge and preferences. A submission from the Commonwealth Department of Agriculture had not been received at the time of collation of this report. P a g e 3

70 4. Executive summary The Australian Farm Institute discussion paper: A sustainable and nationally coordinated plant biosecurity RD&E for Australia initiated strong engagement with submissions received from across the stakeholder spectrum. Input was vigorous, and should be considered carefully in the finalisation of the Paper in order to objectively reflect stakeholder submissions and further this important discussion for Australian agriculture. Stakeholders universally agree on the need for a new approach to Australia s plant biosecurity RD&E system that will support Australian agriculture into the future. The reasons for this support reflect the need for a broader prioritisation of plant biosecurity RD&E in the face of growing challenges, and to a lesser extent concern over the conclusion of the PBCRC. Concern over gaps in capacity is also a significant contributing factor in driving stakeholder interest in enhancing the current system. While unsure of the ideal approach, stakeholders are broadly encouraging of taking a fresh and innovative look at a future system that is not constrained by the past. They urge the author to look beyond those options included in the draft paper. Submissions, in their detail and scope, reflect the broad nature of plant biosecurity RDE and its complex integration with biosecurity operations. The opportunity that improved national coordination of plant biosecurity RD&E affords is clear to all stakeholders. However, there is a need to independently and comprehensively explain the current system, and identify who currently provides cross-sectoral plant biosecurity RD&E coordination and leadership, and articulate roles and responsibilities so as to engender mutual understanding of the status quo. There is no clear consensus on whether the scope of a new approach should be broadened to include animals, weeds, environment and/or social implications, although weeds in particular are of concern to many stakeholders. While there is a recognition that these areas are currently falling through the cracks, there is general reluctance to include them as this is likely to slow the process down and detract from the focus needed. However, stakeholders generally believe there is a need to prioritise extension and international collaboration in any future model. Diminishing resource and sustained funding, and its impact, is at the crux of every stakeholder s thinking. There is universal consensus on the need for the Commonwealth Government to be a partner in whatever future approach is adopted, but no consensus on how industry may fund its contribution. There is a desire to see more information on what this may look like within the options presented. P a g e 4

71 While a single coordinating entity is supported by most, a majority of submissions cited a need for more detail around the size and scale of the proposed new model, as well as other options, and remodelling of existing structures such as Plant Health Australia and Rural Industries Research Development Corporation (RIRDC). Stakeholders also identified improved leadership and coordination within and between current organisations and structures as worth investigating in order to achieve greater efficiency and innovation within the system. There is significant interest and impetus from organisations across the spectrum in continuing to discuss a future approach to RD&E in the short to medium term. P a g e 5

72 5. Benchmark figures In providing an overview, we considered both online and free-form submissions. Where submissions were made in free form, quantitative information has been extracted to present a total overview. Who submitted? The following data represents submissions received in both free-form and online formats. The other category featured consultancy businesses and individuals not affiliated with organisations or specific industries. Industry representative organisations were by far the largest group of contributors to the submission process. Stakeholder representation 20% 2% 9% 4% 13% 16% 7% Government - Federal Industry - Commercial organisation Other Research - RDC, service company 29% Government - State Industry - Representative organisation Research - non University / RDC Research - University P a g e 6

73 Support for national coordination and sustained funding Those who made online submissions were fully supportive of the previously articulated benefits of a nationally-coordinated and well-funded approach to plant biosecurity RD&E. P a g e 7

74 Gap left by PBCRC Of those who responded online, almost 80% agreed that the conclusion of the PBCRC in 2018 would leave a gap in Australia s RD&E capability. P a g e 8

75 Role and scope When asked to consider and rank levels of agreement about the role and scope of a permanent plant biosecurity RD&E organisation, the weighted average across seven key areas was reasonably consistent. The delivery of ancillary benefits was seen as the lowest priority, but still received significant support. The benefits of broadening this initiative beyond plant biosecurity was recognised by many, especially in relation to the inclusion of weeds and environment. P a g e 9

76 Desired attributes In considering online submissions alone, the attributes of a future approach were all generally well supported. However, industry co-investment had the lowest ranking of desired attributes, with national coordination, Commonwealth investment and capacity to deliver being almost universally supported. Full label description: Complement and underpin the plant biosecurity strategies Address the limitations of temporary structures by managing high public benefit and cross-industry RD&E into the long-term Address increased and nationally significant plant biosecurity risks Deliver highly important cross-industry RD&E Invest in research with high levels of public benefit that are unlikely to attract private sector investment Maintain a critical mass of technical and research skills necessary to maintain Australia s biosecurity shield Deliver ancillary benefits including international and private sector collaboration P a g e 10

77 Summary of attitudes and knowledge The first 14 questions of the online submissions clearly demonstrated stakeholder support for nationally coordinated and permanent entity to lead plant biosecurity RD&E. This was supported further in the free-form submissions. P a g e 11

78 Preferred model There is consensus across all respondent groups that doing nothing was not an option. However, there is no consensus around a preferred model for future plant biosecurity RD&E. Close to 25% of submissions are supportive of the preferred model a PB Research Corporation - as articulated in the draft paper. However, commentary indicated there was significant variation in what that model would actually entail. Full label description: Effectiveness: Capacity to manage and deliver a complex RD&E program Stakeholder attractiveness: Ability to attract and retain key stakeholders and resources to support the RD&E program Structural resilience: Prospects of making a long-term contribution to plant biosecurity RD&E Industry support: Prospects of attracting and maintaining strong plant industry support. Government support: Prospects of attracting and maintaining government support and involvement. P a g e 12

79 Of significant interest is the number of submissions (12 of 48) stating that none of the models meet the expectations. When considered in the context of all responses, and in specific comments provided in free-text, it is clear that stakeholders want further opportunity for discussion and are keen to know more specific details of what a future organisation would look like before feeling able to indicate a preferred option. Supporting commentary indicated a groundswell for exploring options (PHA, RDCs) that were not prioritised in the discussion paper. When asked to consider the attributes of the proposed model, online submissions indicated that the ability to commercialise and a stand-alone structure were the least important. P a g e 13

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