Chapter 6.1
Support for value-adding activities
6.14 Significant assistance has been provided to the development of
value-adding activities in Australia through research carried out in the various sectors
of agricultural production particularly in employment of new technology.
Research
6.15 The wool, meat and grain industries are examples of industries
where research has benefited value-adding activities.
6.16 The primary function of the Australian Wool Research and
Promotion Organisation (AWRAP) which was integrated with the International Wool
Secretariat (IWS) in 1995, was to increase the value of the Australian wool clip. AWRAP
had been formed from the merger of the Australian Wool Corporation and the Wool Research
and Development Corporation on 1 December 1993. According to the Australian Wool Research
and Promotion Organisation Act, 1993, AWRAP was:
- to undertake generic promotion, or arrange for generic promotion of
the use of wool and wool products, both in Australia and overseas;
- to investigate and evaluate the requirement for research and
development in relation to the wool industry; and
- to facilitate the dissemination, adoption and commercialisation of
the results of research and development in relation to the wool industry.
[9]
6.17 When examining applications for research and development
assistance AWRAP applied several assessment criteria, including whether the project would
increase returns to Australian woolgrowers through the development of new products.
6.18 Apart from the immediate benefits to wool production from research
and development programs designed to add value to Australia's wool production,
these programs often contribute to the economic well being of rural and
regional communities. These communities benefit from wages, salaries and
the operating costs related to an array of research projects taking place
in rural and regional locations throughout Australia. Wool industry research
and development programs have been responsible for the establishment of
a number of significant research facilities, such as the expanded Commonwealth
Scientific and Industrial Research Organisation (CSIRO) Division of Textiles
in Geelong, Victoria, and the Division of Animal Production and Wool Technology
located at Armidale in northern NSW. [10]
6.19 The CSIRO has a large number of projects underway examining early
and later stages of wool processing. The Committee understands that about
half of these projects are funded by the International Wool Secretariat
through its research budget and the other half by the CSIRO using its
own budget. [11]
6.20 The Australian Meat and Livestock Corporation (AMLC) saw research
activities assisting meat producers and processors to more closely align
their production with market requirements, for example research can result
in livestock with specific meat characteristics. In appreciation of the
importance of research to the industry the Corporation expressed the view
that there was a need for continued government support for bodies involved
in meat research such as the CSIRO. [12]
6.21 Research plays a significant role in efforts by Australian
grain industries to add value to their production with the Grains Research and Development
Corporation (GRDC) playing a particularly important role in supporting research in the
industry.
6.22 The Grains Research and Development Corporation told the Committee
that its two major research objectives for 1993-94 were to develop products
for markets and the improvement of production efficiency. These two objectives
took up 67 per cent of GRDC's budget allocation for the period 1993-94.
[13] In the 1995-96 budget this allocation
had risen to 69 per cent. [14]
6.23 The Corporation has supported the following main research and
development areas:
- national grain marketing;
- malting barley;
- milling wheat; and
- grain legumes. [15]
6.24 The GRDC assisted in the creation of the “National Barley Agenda”,
a mechanism for coordinating barley research across Australia. The aim
of this body is to accelerate the development of new, world class barley
varieties for the malting and brewing industries. [16]
6.25 The Corporation provided support to facilitate the use of non-chemical/low
residue pest control methods that address concerns, both in Australia
and overseas markets, relating to pesticides and chemical residues. [17]
6.26 The GRDC supported a project investigating the processing of weather
damaged wheat for the production of starch and gluten. The Corporation
told the inquiry in evidence that this project had been completed with
inconclusive results. [18]The Corporation also supported another project
examining the possibility of using damaged wheat in flour milling, baking
and stockfeed. [19]
6.27 The Committee understands that the GRDC was intending to invest
$7 million over the seven years from 1995 to identify value-added products,
particularly from the wheat industry. The Corporation has been joined
by a number of bodies in supporting this project, including Arnotts Limited,
the Australian Wheat Board, CSIRO and the University of Sydney. [20]
Technology
6.28 It was argued that advanced processing and packaging technology
in the food processing field are crucial determinants of efficiency and
the ability of firms to maintain sustained competitive advantage in the
marketplace. For Australian value-adding in agricultural production to
be efficient and profitable their must be a high level of innovation in
the industry including a strong commitment to technologically sophisticated
production processes. To attain this necessary technological sophistication
there has to be an adequate level of industry based research and development.
[21]
6.29 Mr Robert Calder of the Department of Primary Industries and Energy
(DPIE) commented during his evidence to the inquiry that Australians are
“very good at adapting overseas machinery and technology and putting
it together to suit our particular requirements.” [22]
6.30 Professor Nicholas Samuel of Adelaide University maintains that
a good research infrastructure exists in institutions such as CSIRO for
the development of competitive technologies, particularly biotechnologies.
An example of such technology is the CSIRO's development of “active
packaging” that preserves fresh fruit and vegetables by slowing down
biological processes. Technological advances can lead to better “storability”
and transport of foods. Professor Samuel, stressed that “much of
the future competition between Australian processed foods and Asian processed
foods may well be in terms of the biotechnology embodied in them.”
[23]
6.31 The following technologies provide opportunities for Australia
to improve value-adding in its agricultural production:
- plant genetic engineering;
- animal genetic engineering;
- improved reproduction techniques including embryo banks and cloning;
- cell micropropagation, including;
- cell culture technologies;
- cell receptor manipulation, including;
- animal growth hormones;
- plant growth regulators;
- computers;
- communications networks;
- green house, robot or sensor control
- analyses of spatial data such as models of climate;
- mechatronics that encompasses tools and robotics, including;
- sheep shearing; and
- robot butchers. [24]
6.32 It has been claimed that the use of genetic engineering can provide
unique opportunities for adding value to livestock and that this “bred-in-added
value” has a persistent and widespread benefit in return for a focused
effort. It has been further argued that the direct cost of genetic improvement
in terms of money and energy is small compared with the more direct costs
of purchasing chemicals, fuel and fertiliser. [25]
6.33 The success in marketing Canola oil is an example of how genetic
engineering can benefit producers. Canola oil was produced as a result
of genetically modifying the constitution of the oils produced by rape
oilseed and changing the name of this oil to Canola. [26]
6.34 In evidence to the inquiry Professor John Hamblin, Director of the
Centre for Legumes in Mediterranean Agriculture at the University of Western
Australia, detailed the progress his Centre has made in adding value to
lupins in that State through genetic engineering. [27]
Conclusions
6.35 The Committee considers that the use of new technology
resulting from research and development programs will continue to have a significant
impact on the future course and success of value-adding to Australia's agricultural
production.
6.36 In its attempt to compete in the Australian and international
market place Australian agricultural based industries face intense competition. To gain
and maintain a significant share in these market places Australian value-adding industries
must exploit every resource possible to be competitive. Due to the increasing
liberalisation of world trade, even within Australia, food producers can no longer count
on having a near monopoly on the supply of food, in all its varied forms. Australian
value-adding industries must be competitive in whatever market place they are operating.
To be competitive, primary producers and value-adding enterprises must have access to the
best available research and to the most advanced technology that can be developed or
purchased to exploit the results of this research.
Footnotes
[6] Evidence, Murray Goulburn
Cooperative Company Limited, p. 245. Murray Goulburn Cooperative is one to the two largest
dairy cooperatives in Australia with an export turnover of about $500 million per year.
The Cooperative has six factors throughout Victoria employing about 3 000 people.
[7] Evidence, Murray Goulburn
Cooperative Company Limited, pp. 245, 248.
[8] Evidence, UMT, p. 852.
[9] Evidence, IWS, p. 170.
[10] Evidence, IWS, p. 172.
[11] Evidence, IWS, p. 181.
[12] Evidence, AMLC, pp. 314-315.
[13] Evidence, GRDC, p. 1047.
[14] Evidence, GRDC, p. 1056.
[15] Evidence, GRDC, p. 1053.
[16] Evidence, GRDC, pp. 1053, 1057
[17] Evidence, GRDC, p. 1053
[18] Evidence, GRDC, pp. 1054-1055,
1058.
[19] Evidence, GRDC, pp. 1054-1055.
For other research projects discussed by GRDC during their evidence to the inquiry see Evidence,
GRDC, p. 1057.
[20] Evidence, GRDC, p. 1057.
[21] Evidence, Professor Nicholas
Samuel, p. 605; see also Evidence, Vegco Limited, p. 258
[22] Evidence, DPIE, p. 927.
[23] Evidence, Professor Nicholas
Samuel, p. 599.
[24] Strategic Technologies for
Maximising the Competitiveness of Australia's Agriculture-Based Exports, Bureau of
Rural Resources, 1991, pp. vii, 6-12.
[25] James Walcott and David Adams,
Bred-in Added -value, Agricultural Science, Vol. 5, No. 2, March 1992, p. 35. For more
information on the impact of technology, particularly biotechnology, on agricultural
production see John Radcliffe, New Technologies for Australia's Primary Industries,
Outlook 96, Vol. 2, Agriculture: collection of papers delivered at the Outlook 96
Conference held in Canberra 6-8 February 1996, organised by ABARE, pp. 98-101.
[26] James Walcott and David Adams,
Bred-in Added -value, Agricultural Science, Vol. 5, No. 2, March 1992, p. 37.
[27] Evidence, Centre for Legumes
in Mediterranean Agriculture, pp. 747- 750, 753, 755, 759-761.