The reasons of unhappiness are many, including the opinion of the PC in that agri-businesses should be investing in funding their own research.
The PC does not question itself the proportion of agribusinesses that would be able to invest in R&D. For example, about 51% of horticultural farms earn less than $50,000. They leave the faith of these small businesses to the market forces. The question is: what incentives do they offer to the shrinking rural industry to stay put? Innovation is the lifeblood of any small business. This is where public funding has a role in many countries. But in Australia, small innovative businesses will need to survive alone.
Further, the PC states that when processors leave to other countries (such as New Zealand, which has much more interest in keeping their agri-food R&D alive and kicking), it is because it is cheaper to do so. Tough luck for Australian farmers again. Does the PC question whether R&D in NZ is one of the reasons why NZ is more competitive/attractive for McCain and Simplot? Nope.
The report states that ”In short, both the contention that Australia should necessarily be seeking to undertake more food-related value-adding activity, and the consequential perception that this justifies public funding for R&D, are highly questionable”. Yet, no analysis of the value of value addition to the Australian economy is made. No analysis of the value chain effect of R&D is made. The report is heavy in opinion and light in facts. Almost no statistics are presented to back this and other points of view. This is established in page 4: “rather than add to the plethora of empirical work already in the public domain, the Commission has used judgement and qualitative assessment to supplement the available quantitative evidence”. This, to me, is the problem of this report. Assessment of how much funding RDCs should receive, what mechanisms should be used, whether farmers are able to fund their own R&D (and what types of farmers) are issues that require solid, hard evidence and sound analysis. If someone bothers in presenting a good case, with figures showing the how’s and why’s, there is always the disclaimer that “judgement” and qualitative assessment” will be used.
I could go on forever.But the intentions are to eventually decrease (not maintain) R&D funding, make no mistake. The overview of the report indicates: “At the end of the 10-year phase down of the matching contribution cap for the industry-specific RDCs, the Government’s total contribution to the RDC program would be around $60 million a year lower”.