Over the past 30 years, Australia has experienced the highest growth in wheat productivity globally.  When compared to Argentina, the US, France and Canada, Australia’s total factor productivity (TFP) growth for wheat was 2.75 per cent. This compares to Argentina at 0.98 per cent, the US and France at 0.89 per cent, and Canada at 0.61 per cent.

Rather than measuring simple yield tonnage or value, TFP compares the total gross output with total land, labour, capital and material inputs. A growing TFP indicates total output is growing faster than total inputs.

These number-crunching results come from a benchmarking study by ACIL Allen, an independent advisory firm commissioned to undertake the study by GRDC. The results help GRDC with its investment strategy and five-year plan. ACIL Allen found that Australia’s growth in wheat productivity comes from both area expansion (at 1.97 per cent a year) and yield growth (at 1.5 per cent).

The report states that this yield growth has occurred within the context of significant droughts and an unprecedented rate of technology-driven grain production. The latter has supported yield increases under water-limited circumstances.

Australia’s level of public investment is relatively similar to most of the other countries, with the US being the largest investor.

When Australia is compared to just Canada and the US, it is the second-largest investor in genetics, the highest in crop protection and the third in crop nutrition. Australia and Canada both invest more than the US in automation, and Australia ranks second to Canada for investment in market access.

Table 1 summarises Australia’s relative position against the benchmarks assembled for six other countries in the ACIL Allen study. The US is the largest economy, dominates agriculture research, development and extension, and ranks top in most of the indicators analysed. Australia ranks higher on research intensity (amount spent on RD&E compared to sales or profits) than on agricultural and grains RD&E expenditure. It also ranks higher on grains research priorities in crop protection and automation.

GRDC managing director Nigel Hart says TFP is a valuable indication of grower profitability – the core objective of GRDC RD&E investments. “Although economies of scale and increasing farm size will improve TFP, the metric is mainly driven by enhanced farming practices such as more-efficient input use, improved crop protection, higher-yielding cultivars and better soil management,” he says.

GRDC board chair John Woods says the report highlights why GRDC is important for Australian grain growers. “Not only are we the major investors in critical RD&E domestically, we are also the front door for overseas investors,” he says.

The report shows that Australia invests approximately 1.5 per cent of the gross value of grain production (GVP) in RD&E each year, including government contributions.  Funding from research partners increases RD&E investment to about 2.5 per cent of GVP. This investment is funded through commodity levies and matching Australian Government R&D contributions. State governments, public research bodies, universities and other private entities also contribute to research outcomes.

While other grain producers undertake research suited to their environment, public RD&E structures in those countries are vastly different from the Australian system.

Australia’s levy-based rural funding has advantages. For example, levy-based funding provides certainty and stability, which allows GRDC to allocate RD&E funding against priorities across the entire grains industry.

This investment has focused on genetic improvements, agronomic and farming systems, crop protection, crop nutrition, automation, market access, climate change, biosecurity and others.

Private-sector incentives are changing and are affected by scientific advances in biotechnology, food and agricultural market globalisation, stronger legal protection for intellectual property, and changes in agricultural and regulatory policies. The study identified a trend that suggests that private-sector investment broadly complements public RD&E. The investment has focused mainly on seeds, biotechnology, agricultural chemicals, fertilisers and farm machinery.

The study examined RD&E funding across selected countries by theme over the past five years. While comparing the investment mix across nations is difficult, it shows that Australia’s research allocation is broadly comparable to the US and Canada.

For example, the average percentage of research spending on genetic improvements is more than 50 per cent in the US, 44 per cent in Australia and 29 per cent in Canada.

The next most significant RD&E investment theme is crop protection. The study identified that Australia ranks first among top grain-producing countries, with 24 per cent of its funding allocated towards crop protection.

The third major category is agronomic and farming systems research, where Australia ranks the lowest. Twelve per cent of funding is allocated to this.

Australia’s RD&E spending on automation is comparable with Canada’s, while the US reported the lowest spending share among these three countries. RD&E expenditure on market access is lower for Australia than for Canada but higher than in the US.

GRDC’s RD&E 2023-28 Plan, launched in late July, reflects the increasing importance of strategic and innovative investments for the long-term future of the Australian grains industry.

Table 1: Comparative RD&E benchmarks and rankings

Source: Various