Presentation by Simon Hearn (Australia) at the APAARI High Level Policy Dialogue, 8 Dec 2015

1. A comparison of public/private
agricultural research partnerships
Dr Simon Hearn

2. Background: Research partnerships
• This presentation outlines the main features of
Australian government and rural industry research
alliances and considers the scope for wider application
in the Asia-Pacific region
• The Australian Rural Research and Development
Corporation (RDC) model was approved in 1989
• This is a unique model of funding and management
partnerships between the Australian Government and
the agriculture, fisheries and forestry industries
• Co-funded public/private research has helped
Australian agriculture to double its productivity over
the last thirty years

3. Private sector key contributions
• Apart from joint funding the private sector has
five key contributions in RDC partnerships:
1. Pathways to greater scale and impact
2. Diversity of partnership models and value chains
3. Access to value chain knowledge, technologies
and innovation capacity
4. Potential to leverage private sector investment
5. Access to markets

4. RDC framework
• There are currently fifteen RDCs co-ordinated by
a Council of Chairs
• Each RDC is focussed and jointly funded by
particular farm industries
• Producers in each industry pay levies on
production for collective research activities
• This model recognises that individual farmers
generally cannot undertake research or
appropriate the returns from such investment
(market failure)

5. RDC public/private partnerships
• The RDCs commission joint research amongst public and
private providers
• Research is funded using investment funds from farm
based production levies matched by Federal government
grants to each RDC
• Currently the government provides dollar for dollar
matching of industry levy funds up to a maximum of
0.5% of each industry’s gross value of production (GVP)
• This joint public/private funding system enables close
partnerships to determine and agree on research
priorities and goals to achieve both public and private
benefits (economic, social and environmental)

6. RDC modes of operation
• The RDC model is based on private/public partnerships given the
joint dollar for dollar by producers (levies) and government
• Co-funding also compels accountability to both industry and
government and collaborative development of strategies, goals and
priorities in research programs and business plans
• Joint priorities and goals are regularly updated in five year
corporate plans, complemented by annual operating plans and
annual reports on achievements
• Decision making includes mixed multi-skilled boards and industry
research advisory- committees to address key research programs
• This model helps to facilitate investment partnerships to enhance
financial resources, research capacity, market knowledge and
complementary technologies
• Dissemination and Commercialisation terms are influenced by all
members of public/private research consortiums

7. RDC legal basis
• Farmer levies are generally raised at the point of sale, and
are the subject of mutual agreement between the
government and a clear majority of industry producers
• Once agreed the levies are mandatory, and in Australia are
the subject of Parliamentary legislation
• The RDC model has two main legal instruments-statutory
authorities and industry owned companies limited by
guarantee
• Both statutory authorities and industry owned R&D
companies are accountable to the Minister for Agriculture
for research expenditures and performance
• They are also compelled to engage in consultation with
public and private stakeholders

8. Commercial partnerships
• There is no single commercialisation model but the RDC experience suggests some
common characteristics or options for working with private sector providers
• An examination of RDC mechanism of engagement highlights the following broad
(but not exclusive) operational investments:
 Single or multiple partner specific agreements with milestones and reporting
 Business relationships by ongoing contract including research agreements and licensing
of resulting IP
 Establishment of joint company (generally companies limited by guarantee) involving the
RDC and other commercial members in Australia and/or other country
 Unincorporated joint ventures including pooling of funds and challenge programs
 Service agreements with private providers
• The choice of business model will vary according to circumstance but governance,
funding, effective management of IP; and ease of interaction with the private
sector are dominant influences
• For all agreements, a key objective is to achieve adoption of research outcomes
leading to improved livelihoods for end users with mutual benefits for Australian
communities and industries where feasible

9. Major successes
• Major successes of this Australian public/private case
study include;
1. More effective research, development, innovation
and extension of results in areas that are priorities for
both industry and government (productivity, climate,
natural resource management)
2. Increased efficiency and effectiveness of joint
communications enhancing research adoption
3. Increased funding incentives to leverage higher total
research investment than would be possible by each
party acting alone.

10. Issues for Asia-Pacific consideration (1)
• It needs to be considered whether this approach with government/industry
research alliances (or variations on the model) could usefully apply more widely in
our region?
• An essential pre-condition is agreement by government and farmer/food industry
representatives to establish the ways and means to raise joint research funding
(this may require legislation to be enacted)
• Regional national governments would need to provide incentives and security for
farm industries to commit funds-with likely budget implications
• This in turn requires a political commitment to research by governments, and
mutual trust to achieve both community and commercial benefits as a basis for
partnerships
A pre-requisite for imposing farmer levies also involves the main canons (principles) of
revenue raising
• reasonable collection costs for levies; certainty of payment; timing of payment (at
sale); fairness and equity (based on ability to pay); cost effectiveness (benefits
outweigh costs)

11. Issues for Asia-Pacific consideration (2)
• The agricultural sectors in many Asia-Pacific countries
are predominantly smallholder farmers, which raises
practical questions over capacity to pay voluntary or
compulsory production based research levies
• There could be excessively high administrative costs
involved as levies normally collected at point of sale to
processors, slaughter houses or wholesale outlets
• The informal market is probably more usual in many
parts of Asia-Pacific than in Australia
• Further consideration of joint funding models needed
in Asia-pacific

12. Alternative levy/tax options for joint
research
• Since not all farmers in Asia-Pacific are smallholders levies could be applied to
larger commercial farms/plantations above a designated financial size with a
matching commitment from government
• Some sectors such as coffee, palm oil, cotton, intensive chicken and piggeries are
examples of such opportunity
• A similar arrangement could be designed for agricultural cooperatives covering
larger numbers of farm members which could enter joint agreements with
governments-but these need to be sustained and not short term to be effective
• The levy could be paid by processors/wholesalers with or without ‘pass back’
• Equal public/private funding commitments are one option, but other options such
as tax incentives may be more feasible depending on farm industry structures
• Either way there are budget implications, and a need for forward obligations on
each party to allow research to proceed
• Public/private partnerships may need to be undertaken on a program or project
basis only, including research and adoption and/or only extension

13. THANK YOU