Profit makes GIG cool

Pingrup famer Doug Smith believes the formation of any new WA grains research and development body must be based on the simple premise of improving the profitability of grain growers.

Mr Smith said the recently released Grains Industry Group’s response to the State Government’s GrainsWest proposal, was a more secure way to ensure grain levies were returned to WA grain growers in the future.

GrainsWest PLUS, the GIG response to the GrainsWest proposal announced last year, cites nine key imperatives that any new body must incorporate, and three key recommendations for the future of the industry.

The report was developed following extensive investigation into other research and development structures around the world.

Mr Smith said the major flaw in the State Government’s original proposal was that the model did not appear to be project or outcomes based.

In contrast, he said the new proposal would not simply transfer Department of Agriculture and Food WA staff to the new facility, but would employ staff on an as-needs basis.

“If you are just going to take the grains part of DAFWA and dump it in a new facility in Northam, what have you got? Basically, you’ve just got DAFWA in a different location with some else is funding it,” he said.

He said he did not believe a complete shift of the organisation to Northam was in the best interests of growers.

“Its imperative to attract quality researchers to these projects, and while retaining research assets in regional areas is important, I don’t believe there is a need to put a single facility outside Perth,” he said.

“Rather, linking with research bodies and universities that already have those research skills is a more practical way to go.”

But Mr Smith said any proposal must be clearly explained to growers.

“Consultation with the entire grains industry is the key to the success of this new proposed model,” he said.

Mr Smith said under the PIERD Act (1989), GRDC was restricted in its ability to fund projects, with statutory red tape meaning it could only ever be a minority funding partner.

“Until GRDC is transitioned into an Industry Owned Corporation, we are really reliant on other funding bodies to commit to research in this State, in order to secure funding from GRDC,” he said.

“Under this new GIG proposal, there is a rolling five-year State Government funding commitment, which will ensure levy money can be returned to WA, and research undertaken here for the benefit of WA growers.”

He said reducing overheads, to ensure maximum value for levies paid was critical for any new research and development body.

“Its my understanding that DAFWA can’t put a definitive number on their overheads at the moment, but they have been talking in rough figures of around 30-40 per cent.”

“We need to ensure this is significantly reduced and I believe this GrainsWest PLUS model better places our industry to achieve a multiplier effect from our levies, and makes sure the State doesn’t walk away from its commitment to farmers and R&D.”

According to GIG Chairman David Falconer, the GrainsWest PLUS model challenges DAFWA’s original concept of setting up a single entity in Northam and instead proposes an administration node in Perth combined with regional capacity to deliver projects.

“The DAFWA model proposes a contractual commitment from DAFWA of five years of funding, but in our view that is a red flag and by the critical year 2-3 stage, staff will be more focused on the next round of funding than the research tasks at hand,” Mr Falconer said.

But DAFWA director-general Rob Delane defended the original GrainsWest concept, saying the genesis of the proposal had been the drive to deliver the best productivity and profitability benefit to grain growers.

He said this original premise had also been recognised by the recently released GIG response.

In fact, Mr Delane said DAFWA had part funded the consultancy work in the development of this response.

“(We are) pleased to see that the report endorses the proposed not-for-profit company and many of the other facets originally proposed by DAFWA. GIG has presented potential improvements to components of the GrainsWest model, which we are currently reviewing with GRDC.”

As previously reported byCountryman , GRDC managing director John Harvey refused to confirm a move of its organisation to Northam despite an announcement to that effect by the Federal agriculture minister, saying only that the organisation was awaiting the outcomes of the GIG response.

Now in the wake of the GIG response Mr Harvey said he was in the early stages of reviewing the recommendations and would work with all groups involved to keep the Minister and key stakeholders informed of their progress.

A spokesman for Federal Agriculture Minister Barnaby Joyce confirmed the GRDC was scoping options to establish a regional office in WA in line with the coalition Government’s decentralisation agenda.

1) Industry supported business plan formed after extensive grower and GRDC consultation.

2) Independent chairman and a skills based board.

3) Long term contractual funding commitments.

4) Initial five year financial commitment with a rolling commitment linked to performance.

5) Capacity and capability of new body not linked to current DAFWA staffing arrangements.

6) Establishment of a collaborative culture.

7) A Perth-based administrative node with use of regional locations on an as needs basis.

8) Maximise involvement of universities.

9) New body should not compete with services in the commercial sector.