Modernising the RDC system
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Australia’s Rural Research and Development Corporations (RDCs) have helped drive agricultural innovation since 1989. They allow Australian government and primary producers to co-invest in research and development (R&D). This benefits industry and regional communities.
There are currently 15 RDCs:
- 5 Commonwealth statutory bodies
- 10 industry-owned companies (IOCs).
All RDCs manage R&D services. Most IOCs also provide other industry services, mainly marketing. Following legislative amendments in 2013, statutory RDCs are also able to undertake marketing activities at the request of industry, where supported by a statutory marketing levy.
Commonwealth statutory RDCs are Australian Government entities with a board of directors appointed by the Minister for Agriculture, based on recommendations from a selection committee.
Commonwealth statutory RDCs, their enabling legislation and declared representative organisation(s) are below:
Commonwealth statutory RDC
Statutory RDC enabling legislation
Declared representative organisation(s)
Australian Grape and Wine Incorporated
Rural Industries Research and Development Corporation (trading as AgriFutures Australia)
Industry-owned research and development companies are independent corporate entities with expertise-based boards. Industry-owned RDCs and their enabling legislation are below:
IOC enabling legislation
Government support for RDCs
The RDCs invest in R&D and innovation to improve the profitability, productivity, competitiveness and long-term sustainability of Australia's primary industries. These include agricultural, fishing and forestry industries. Both industry and government recognise that creating and meeting demand for Australian produce is essential to the competitiveness and profitability of our primary industries and provides benefits for the whole Australian community. The government-industry partnership model that supports the RDCs has been operating successfully for over 25 years.
The RDCs are funded primarily by statutory R&D levies (or charges) on various commodities, with matching funding from the Australian Government. To expand Australia’s rural R&D efforts, the government matches expenditure on eligible R&D, generally up to 0.5 per cent of the determined industry gross value of production. RDCs are accountable to both industry and government.
Levies for R&D and marketing are initiated at the request of industry and are collected and administered by the Department of Agriculture, Water and the Environment. These funds are distributed to the RDCs to undertake R&D and industry services. The department’s levies webpage contains further information on the levy system.
The key performance and accountability framework for IOCs and statutory RDCs is set out in the funding agreements signed with the Commonwealth. These agreements are required to allow funds appropriated by Parliament to be spent by the RDCs and to ensure the funds are expended by the RDCs for the purposes for which they are appropriated, essentially for the delivery of R&D and marketing services.
Individual funding agreements with RDCs outline what is expected of them. This includes expectations of performance and transparency, as well as accountability to levy-payers, the government and the public. The funding agreements are renegotiated based on the performance of the RDC during the term of the funding agreement (usually four years). The performance review allows flexibility for parties to adapt to changing expectations and priorities for R&D.
The funding agreements prevent the RDCs from using funds to engage in agri-political activity.
Legislation, regulations and individual funding agreements provide the framework for how RDCs operate.
The Primary Industries Research and Development Act 1989 and the Australian Grape and Wine Authority Act 2013 set out arrangements for the establishment of statutory RDCs and the preferred structure for the administration of their R&D program funds. These Acts, along with the funding agreements, set out the performance, reporting, accountability and industry consultation obligations for statutory RDCs.
The two Acts state that the Minister must declare at least one representative organisation for each statutory RDC. Declared industry representative organisations are listed in Statutory RDCs.
Statutory RDCs are also required to comply with the Public Governance, Performance and Accountability Act 2013. This Act is the cornerstone of the Commonwealth Resource Management Framework that governs how the Commonwealth public sector uses and manages public resources. It is an important feature of an accountable and transparent public sector and informs the daily work of Commonwealth entities and their employees.
The IOCs are declared by the Minister as an industry service body under industry-specific legislation. They are established under, and must comply with, the provisions of the Corporations Act 2001 which sets out the obligations of companies and their boards of directors.
The department’s role
The Minister for Agriculture is responsible for administering the legislation that governs the RDCs (known as enabling legislation) and has delegated some tasks to the department. The department assists the RDCs to adhere to their statutory and contractual requirements and advises the Minister on RDC-related matters. The Minister is ultimately accountable to Parliament.
The principles governing the department’s approach to corporate governance responsibilities and its oversight of portfolio agencies are:
- the individual entity is primarily responsible for ensuring the quality of its own corporate governance
- the department’s oversight of the entity is not to duplicate nor lessen the entity’s governance responsibilities.
The department does not direct the RDCs in their operations as that is the role of the RDC’s board of directors. However, it takes a support role to:
- assist RDCs to meet legislative requirements and comply with their funding agreements, including providing guidance on better practice administration
- assist the Minister to discharge statutory and parliamentary obligations with respect to the RDCs, including providing advice on the operations of these agencies and their accountability of funds
- continue to reinforce and promote that the RDC boards are responsible and accountable for the operations/governance of that entity
- ensure the RDCs have a framework to deliver R&D and marketing to underpin the profitability, productivity, competitiveness and long-term sustainability of portfolio industries
- administer the flow of levy funds
- implement R&D policies as directed by the Minister.