Ffic Rc Business Plan

7/29/2019 Ffic Rc Business Plan

1/75

The

Future Farm IndustriesCooperative Research CentreProfitable Perennials for Australian landscapes

Business Plan2007-08 to 2013-14

Date: 24 J anuary 2006


2/75


3/75


4/75

FFI CRC INTERIM BUSINESS PLAN 2007-08 TO 2013-14

2

Six Supporting Participants signed their intention to participate in the FFI CRC, and will beproject investors and partners. They are: Kondinin Group, Enecon Pty Ltd, Renewable OilCompany Ltd, The Oil Mallee Company, Forest Products Commission and North CentralCatchment Management Authority.

Want Further Information?

Key contacts

Kevin Goss Chief Executive Officer DesignateAndrew Inglis Chair Elec tLucinda Corrigan Deputy Chair ElectMark Stickells A/Chief Operating OfficerMike Ewing A/General Manager ResearchJ ohn Powell A/ General Manager, Commercialisation and Utilisation

Address

c/- CRC for Plant-based Management of Dryland SalinityThe University of Western Australia M08135 Stirling HighwayCrawley WA 6009

Phone

Natalie Lennon, Exec utive Assistant: 08 6488 1952

Mobile

Kevin Goss: 0418 274 361

Email

Kevin Goss: [email protected]

Web

www.crcsalinity.com.au


5/75


6/75


7/75


8/75


9/75


10/75


8

grown 7% per annum since 199514. This longer term initiative is higher risk but potentially veryhigh pay-off; scoping studies are already showing strong industry interest. Success will meannew options for sustainability in farming and resource-based industries, economic activity inregions and management of Australias natural resource base. Woody biomass grown onwheatbelt farms can be delivered at regional sites at a price highly competitive withconventional sources, if there is a technological breakthrough on harvesting15.

Agribusiness and NRM consulting services:The CRC is aware that of the 4,000 professionalsservicing Australian agriculture, about 1,200 are in the private sec tor. They and professionalsemployed by CMOs are growing in number16, and represent the new opportunity for FFICRCs path to adoption. Every $100 of farm activity draws on $19 of input services17. ALandmark client service manager (CSM) could generate $500,000 revenue over five yearsfrom developing and implementing a single farm business plan based on FFI CRCtechnologies and farming systems. Major revenue would come from the farm planning fee-for-service, sales of capital items (e.g. fencing, seed) and consumables (e.g. fertiliser), andcommissions on sales and financing, involving five of the six Landmark activity areas18.

Triple bottom line benefits

Better adapted land-use changes: The CRC will develop innovative farming systems andchanges in land uses that are better adapted to salinity, subsoil constraints and c limaticvariability; do not significantly trade off other important values e.g. water resources; andminimise the weed and genetic pollution risk to biodiversity. FFI CRC plans to developdecision tools capable of predicting these impacts and planning these changes forcommercialisation.

Reduced salinity damage: The CRC will prevent future salinity in some areas and significantlydelay its onset in others, through high-water-using farming systems, salt-adapted grazing andcropping systems and integrated management of earth works. There is a growing list of casestudies for how this can be done profitably19.

Enhanced biodiversity: By placing perennial systems on the farm, often with native spec ies,more diversified landscapes will provide additional habitat as well as other ecosystembenefits. The CRC will quantify these to build a more robust approach to developing marketsfor ec osystem services. There is potential for a much better informed public policy outcomethrough this approach and application of new decision tools20.

Capacity building: The establishment of a nationally ac credited training program foragribusiness and wider client networks, and the provision of industry-ready scienceprofessionals to the research community provide an important element in the pathway toadoption for FFI CRC products. In the case study undertaken for Landmark as part of the

14 Davidson A and Hanna D 2004, Engineered wood products: prospects for Australia, ABARE e-Report04.14, Canberra.15 ENECON 2001, Integrated tree processing of mallee eucalypts, RIRDC publication 01/160, Canberra.16 Roberts K and others 2005, Mapping of rural industries service providers, Publication No. 05/044, RuralIndustries R&D Corporation, Canberra.17 Productivity Commission 2005, as above.18 Powell J 2006, Case study for Landmark company (unpublished), CRC Salinity, The University ofWestern Australia, Crawley.19 LandWater and Wool 2004, Case studies on how farmers are successfully managing saltland for profitand sustainability, Land & Water Australia, C anberra.

20 Ridley AM and Pannell DJ 2005,SIF3: an investment framework for managing dryland salinity inAustralia, SEA Working paper 1901. CRC for Plant-based Management of Dryland Salinity, The Universityof Western Australia, Perth.


11/75


12/75


13/75


11

Key contributions of the outcomes to specific National Research

Priority Goals

National Research Priority Goal Contribution

Transforming existing industries(Environmentally SustainableAustralia)

Promoting an innovation culture andeconomy(Frontier Tec hnologies for Buildingand Transforming AustralianIndustries)

An estimated $1.3 billionnet present value incommercial and industrial growth. To achieve thisthrough more profitable farming systems based onperennial plants, including new production fromnative plants, requires innovation, new investmentand risk management. Enterprises in existingagricultural industries will be more intensive andfundamentally different bec ause ProfitablePerennials will be involved. New companies willenter agriculture and commercial serviceproviders will gain new business opportunities.

Other priority goals

Overcoming soil loss, salinity andacidity

Sustainable use of Australiasbiodiversity

Water a critical resource

(Environmentally SustainableAustralia)

The proposed research will fully integrate

economic drivers for change with sustainabilityprinciples and a systems approach. New farmingsystems and industries will be developed andpromoted for adoption where they meetstandards for conservation of natural resources,reducing the risk of dryland salinity, and improvingconservation of biodiversity and water resources.


14/75


15/75


16/75


17/75


18/75


16

FFI CRCs Path to Adoption

New agricultural innovation networks are providing challenges and opportunities for currentand proposed participants in the FFI CRC25. For the R&D corporations (RDCs) there are manyfarmer-run groups, some quite capable of conducting applied research and many more

expecting to be engaged from an early stage. Departments of primary industries haveevolved into program-management organisations driven by greater focus on deliveringgovernment initiatives and on servicing key industries through projects funded by RDCs.Landmarks business model is built on the capacity of its staff, and it will look to develop theabilities of its 300 agronomists to provide influential technical advice alongside sellingproducts and commercial services.

The FFI CRC is well positioned to engage agricultural and NRM sectors in a new way thataddresses these challenges and opportunities. Its strategy for adoption rec ognises that bothfarmers and those who service their commercial needs have the c apacity to innovate, andthat there is diversity within these groupings regarding attitudes to adoption. The CRCsstrategy builds on a network approach to participation, influence and adoption. Patterns of

relationships are now purpose-specific; a farmer will have a network of information sourcesand advisers for cropping systems entirely different to the network used for businessmanagement, and neither is constrained by distance. Building on this approach the FFI CRCwill have three modes of networking with industry:

Mode Description Example of FFI strategy

Engage Industry direc tly involved throughparticipatory arrangements in FFICRC research ac tivities

Engage participants networks of farmersand advisers in research (throughdemonstration sites, advisory groups)

including training of Landmarkagronomists.

IntegrateandInfluence

Stakeholders that have potential topromote the work of the CRC anddirectly influence adoptionbehaviour in key industryconstituenc ies; positively disposedto innovation, businessopportunities and risk.

Coordinate information provision throughmultiple networks FFI Associates (e.g.Evergreen Farmers, Saltland PasturesAssociation and Oil Mallee Association),shop-front industry information brokers(Kondinin Group), and industryinformation channels (MLA, GRDC, AWI,DPIs).

Adopt FFI

productsandservices

End-users who adopt FFI products

directly, and derive profits andadditional benefits, whichaggregate to FFI CRC outcomes.

Provide cultivars, decision support tools,

and accredited farming systemproductivity information to end-usersthrough commercial services, Landmarkagronomists and CRC partner extensionservices.

25

The analysis that follows is drawn from many sources with the most recent being:Stone G, 2005, Agribusiness Role in Extension, Education and Training: a c ase study, Report to the C VCB,Publication No. 05/086, Rural Industries R&D Corporation, Canberra.


19/75


20/75


21/75


19

what its customers want from annual surveys. Risk is spread through the C RC working with allthese players and paths as networks. On the other hand a tender process is best suited to riskmitigation for commercialising on-farm technologies such as seed production and sales,because of the many competitors in that market.

By way of contrast New woody c rop industries for regions face new market opportunities,

with the business goals of private sector players ranging from venture capital raising andmanaged investment schemes to long term returns on established capital. To mitigate risk inthis area the FFI CRC will engage with strategic partners Enecon, The Oil Mallee Companyand ROC , which have a strong foundation of technologies and expertise in harvesting andbio-energy processing, and a shared goal in facilitating sound commercial partnerships fordeveloping new regional industries. We have structured this relationship flexibly so that linkswith a range of other companies can be developed as further opportunities are assessed asviable.

The market for NRM solutions for catchments is likewise emerging but based more on nationalpolicy and public funds investment. Here the FFI CRC plans to build on the strong trackrecord of the CRC Salinity in providing soundly based scientific knowledge for more effective

policy in NRM, and developing decision tools to vastly improve net benefits from regionaldelivery of policy and investment. Risk will be mitigated by continuing to provideindependent advice based on rigorous scientific and economic analysis.

Intellectual Property Management

FFI CRC management of IP will be undertaken to ensure a sound basis for commercialisationand utilisation of FFI CRC products. Ac hievement of the scale of FFI CRC outcomes demandsrobust assessment of opportunities and maximisation of adoption rates.

The two IP management strategies for FFI CRC strategies will be:

Working with private agribusiness companies to develop trademarked, copyrighted or

patented technologies and packages that will be licensed for commercialisation. Dependingon co-investment arrangements, royalties may be part of this strategy.

Working with public sector agencies to gain rapid adoption of innovative farming and NRMsystems to improve competitiveness of major Australian export industries.

Establishment of freedom to operate is an essential part of an IP management strategy forany research group. Our assessment based on extensive experience and detailed planningshows that freedom to operate is unlikely to be a major issue for the planned areas ofresearch.

Careful IP management procedures will be instituted to ensure that valuable IP can beidentified and protected. These strategies will be used to ensure effective commercialisation

or utilisation so that new knowledge and technologies can be delivered, unencumbered, tocustomers. Effective IP management will also a llow capture of any opportunity to earnincome that will be returned for further R&D where appropriate.

In the FFI CRCs target market, commercialisation and utilisation (or path to adoption)strategies cannot be separated. Developers and adopters of innovation will unite in industrynetworks where CRC products will range from new farming systems to cultivars and othertechnologies, and dec ision support tools. This is a more complex and less linear arrangementthan delivery of technological innovation in a c onventional wholesale to retail marketsituation.

The Commercialisation and Utilisation Program will respond to the different needs of end-usersas identified in the path to adoption for each business opportunity area. Consequently, theprogram will ensure that the FFI CRC implements appropriate policies, standards andprocesses to maintain commercial competitiveness and stakeholder confidence. It will:


22/75


23/75


24/75


25/75


23

Section 3: Research and Development, Education andTraining

The collaboration has the capability to achieve the intended results.

FFI CRC brings together key industry and research capacity to create and deliver a newgeneration of opportunities based on the wider use of perennial plants ProfitablePerennials.

Strengths of the FFI CRC collaboration

The primary strength of the FFI CRC proposal is the comprehensive partnership of participantswith capabilities covering the full spectrum of activities along a chain linking all aspects of itsresearch through to commercialisation and adoption.

The impact of new perennial plant systems depends on rapid and comprehensive adoption.The partnership includes key private and public sector participants with adoption focus.Landmark has the largest network of private agronomists in the country and the FFI CRCprovides capacity to link their efforts with four participating State primary industry agenc ies.The adoption capac ity is further strengthened by the participation of the RDCs, with theirindustry level focus on grains, livestock and wood. The Kondinin Group delivers asophisticated communication network that will provide accelerated awareness of newperennial plant opportunities.

The research task is complex and requires assembly of a wide array of skills and capabilities.FFI CRC will build on CRC Salinitys effective management of multi disciplinary research. Theindependent review confirmed its stimulation of researchers to embrace their roles in multidisciplinary teams and to integrate their research; and its impressive governance

arrangements for their coordination and supervision.

Farmers and the wider industry have already been influential in the priority setting andplanning of the research agenda of the bid and they will have further input intoimplementation.

FFI CRC will draw on, coordinate and focus relevant partner contribution in areas of:

Analysis and knowledge of industry trends (RDCs, State agencies)

Detailed knowledge of producer interests and priorities (Landmark, Kondinin Group, Stateagencies)

Participation of farmers in research priority setting (RDC networks)

Direct participation by producers in research (State agencies, CSIRO)

Formal and informal review and feedback on research relevance and progress by farmers andgroups (RDC networks, Landmark agronomists)

Clear pathway to product testing and adoption (established RDC and industry networks ofgrowers).

The RDCs provide a c ritical understanding and access to their industry stakeholders, networksand individual producers. This is supported by informal networks and communicationchannels associated with partners with dispersed networks of staff. Landmark and the Stateagencies are the key partners with this capability.


26/75


27/75


28/75


26

New perennial plants need to be embedded in farming systems and, in the case of woodyperennials also, into emerging industries.

A key capability in farming systems research is the need to deliver reliable generalconclusions from relatively few sites where technologies are tested and demonstrated. Theuse of models is fundamental to such work. CSIRO is a vital source of expertise in modelling

pasture, crop and tree growth. Along with DPI Vic, CSIRO is the source of expertise in wateruse and catchment modelling which is vital to predicting the NRM consequences andimpact of new perennial-based farming systems. Understanding and predicting theec onomic c onsequences of such systems is central to the capabilities of FFI. Participants inthis area are UWA, DAFWA and NSW DPI. DPI Vic has a well established record in soc ialinvestigations linked to changing agricultural land use and these skills will be available to FFI.

Animal innovation

Livestock research is a central plank of proposed farming systems and strong partner inputfrom MLA (meat) and AWI (wool) provided direct input to these efforts as well as linkingrelated research efforts. The four State agriculture agency partners as well as the CSU, UWA

and C SIRO will deliver skills such as animal nutrition, animal reproduction and behaviour. Inaddition, they have special skills in livestock grazing management. Optimum utilisationstrategies of new forages (herbaceous perennial, saltland species and shrubs) will oftenrequire detailed specification resulting from studies of the interaction between livestock andthe feed source.

Saltland farming systems

Specific focus will be on developing profitable ways of using saltland including identifying theappropriate mix of engineering and plant based approaches. State agenc ies in WA and SAdeliver strong capabilities in the management of saline land, a response to the highincidence of salinity. Animal production systems offer the best opportunity to profitablymanage saline land in the short term, in which CSIRO and C SU have world class scientificcapabilities. In the Murray-Darling Basin salinity centres most on water quality and NSW DPI,DPI Vic and CSIRO provide strong capability in analysis and problem solving here.

Natural resource management

This objective is strongly supported by the engagement of state agenc ies with responsibilityfor NRM as well as important research capacity from CSIRO Sustainable Ecosystems. Inaddition, UWA in partnership with DPI Vic in particular, delivers extensive capabilities relevantto policy development that has potential to greatly enhance policy impacts. These initiativeswill be greatly enhanced by the involvement of North Central Catchment ManagementAuthority (CMA), a supporting participant, and other CMOs.

Private and public sector adoption

FFI CRC has recognised the potential offered by public/private partnerships in technologytransfer and will further develop the relationship with Landmark pioneered in CRC Salinity. Itwill extend its partnerships to include the Kondinin Group which has strong experienc e in ruralindustry communication and information flow. These key capabilities offered by privatesector partnerships are c entral to the scale of potential influence and the opportunity forrapid two-way communication with the pipeline connecting research to adoption. Theeffectiveness of extension activities will depend heavily on training capability, which is a clearstrength of NSW DPI with complementary capacity in other state partner agencies.

The RDC partners (AWI, MLA and GRDC) have key interest and expertise in paths to adoption

and have established producers networks and publications in which research highlights canbe featured and training initiatives into which emerging knowledge can be incorporated.


29/75


30/75


31/75


32/75


33/75


34/75


35/75


36/75


34

Central challenges to the program are:

Identification of additional agriculturally useful salt-tolerant plants (building on efforts in CRCSalinity)

Strategies to manage water and preclude salt build up at the soil surface integratingengineering and plant options

Strategies to maximise the impact on profit from the integration of salt land production into widefarming systems

Develop saline production systems that are robust enough be used in highly variable saltlandenvironments

Understanding of how adoption and commercialisation of saline land farming practices can beachieved.

Research Products

4.1 HIGHPak improved performance livestock and pasture management packagesfor saline land

4.2 New salt-tolerant pasture legume and grass cultivars from PastureSearch

4.3 New salt-tolerant halophytic shrub cultivars from Florasearch

4.4 National Saltland Service Centre a vehicle for the delivery of new tools, productsand services

4.5 SALTCAP land capability assessment tool for plant-based saline landmanagement

4.6 SALTDecide hydrological modelling tool to measure the impact of watermanagement using integrated plant-based and engineering interventions both on-siteand off-site

This program aims to develop and commercialise a suite of profitable farming prac tices forthe various classes of saline land across Australia. The research team includes many of thekey scientific resources available in Australia in this spec ialised area and it is linked to strongcapacity in farming systems and technology adoption.

Program Leader

Dr Richard George

Time Commitment (as Full Time Equivalent for each year)

0.8

Key Researchers

Dr Edward Barrett-Lennard

Dr Nicholas Edwards

Professor Zed Rengel

Dr Andrew C raig

Mr Greg Hamilton

Dr Phillip Nichols

Time Commitment (as Full Time Equivalent for each year)

0.6

0.25

0.3

0.5

0.4

0.3

Private Sector Participants

Australian Wool Innovation, Meat and Livestock Australia and Grains Research andDevelopment Corporation


37/75


35

Biodiversity and Water (Program 5)

The challenge fac ed by the Biodiversity and Water Program (BWP) is to link strategies andactions for managing agricultural land to its implications for biodiversity enhancement andwater management. The CRC provides a unique opportunity for natural resource scientists towork collaboratively with agriculturalists, ec onomists, sociologists and other specialists to

deliver multiple benefits from farming landscapes. Apart from the major direc t benefits arisingfrom biodiversity and potable water, the program recognises that natural resourcedegradation is a significant direct cost and risk to the profitability of agricultural enterprises.Consumer responses to off-farm adverse environmental impacts also threaten market share.

Delivery of natural resource benefits will be greatest if they are linked to profitable changes inagricultural systems. Core work of the program will centre on developing:

Management and decision packages that promote farming systems that integrate productionand biodiversity

Catchment models and management strategies for new perennial vegetation systems thatmaintain water quantity in priority water supply catchments, while improving water quality.

The risk-based decision tools and assessment products developed by the program will makean important contribution to policy development and decisions at catchment-scales withimplications for farm enterprises in various geographic zones, and assist the development andapplication of market-based instruments. These tools and products will be developed to takeinto account c limate risk and variability.

Research Products

5.1 Management and decision packages that promote farming systems thatintegrate production and biodiversity outcomes.

5.2 BioRisk risk-based decision tool for managing hydrology to achieve biodiversitytargets and improved production.

5.3 CAT Plus catchment decision tool for perennial vegetation strategies to protectwater resources in catchments.

5.4 Risk assessment products and management strategies to protect biodiversity fromweeds and genetic pollution and to minimise weed control costs.

Much of the research work will be undertaken with target prac titioners such as farmers, CMOsand government agencies. Thus the tools and pac kages developed will direc tly addressexisting problems. This approach will not only lead to focused, applied research, it will form amajor pathway for adoption of the strategies and tools developed by BWP.

The ability to collaborate within the CRC with other programs that have vital expertise such

as Farming Saline Landscapes and Economic, Soc ial and Policy Analysis will play animportant role in the Biodiversity and Water Programs success.


38/75


39/75


40/75


41/75


42/75


43/75


44/75


45/75


46/75


44

Figure 6. Gross benefits for FFI CRC discounted at 5%. Year 1 = 2007.

Compliance with application principles

The benefits of FFI CRC have been modelled over a 30 year period (50 years in the case ofsalinity containment) and discounted in line with the principles required of the application 5%as the reference discount rate (risk-free bond rate) with 2.5 and 7.5% considered in sensitivityanalysis (above). A vast number of spec ific assumptions and estimates were used in theanalysis (documentation exceeds 200 pages), and it is only possible here to show how theseprinciples have been applied in several examples.

Adoption: Adoption c osts are fully accounted for in the estimation of net benefits to landmanagers.

For each technology, an area of potential adoption was estimated, based on factors like thearea of suitable soil types, and then peak adoption levels were spec ified as a conservativeproportion of the potential area. For example, for the perennial pasture, winter activecocksfoot, the potential area was estimated as 1.2 million ha, and the area of peak adoptionwas set at 0.18 million ha (15% potential area). Peak adoption was spec ified consideringevidence about other agricultural technologies in the past. Agricultural technologies aretypically adopted over 10 to 60% of their potential range, depending on a well understoodrange of factors, including economics, the complexity of the technology, and itscompatibility with current management systems. The FFI CRCs networked approach tocommercialisation and utilisation, supported by the Adoptability Index will put its adoptionrates towards the upper end of this range.

Lags until the commencement of adoption by landholders were 1 to 5 years; and further lagsuntil the peak level of adoption were around 10 years in many cases. For example, for Lotus,one of the proposed perennial pasture species, the combined lags mean that peakadoption will not be reached until 2020. These lag assumptions are consistent with thosetypically observed in agriculture; as one example, research to develop the new crop lupinscommenced in the early 1970s, and adoption peaked in the mid to late 1980s.

Research lags: Lags until the delivery of viable new technologies from the research rangedfrom 3 years to over 10 years, depending on the technology.

Quantification of benefits: The analyses to quantify benefits were highly sophisticated, andmade use of a set of internationally recognised economic models that are at the cutting

edge for this type of analysis. The MIDAS modelling illustrated above has been applied for


47/75


48/75


49/75


50/75


48

The detailed planning of research activities, including identification of products andprediction of adoption rates, shows that ac hievement of our planned outputs and milestoneswill require the resources identified, particularly the amount of CRC grant requested. Withoutthe CRC funds the integrated nature of this program of activities would not happen becauseno single participant has the remit to deliver such an integrated and sweeping program toaddress the industry needs and opportunities for agriculture in southern Australia.

When operational, FFI CRC will apply the rigorous approach to research planning andmanagement that has been an important strength of CRC Salinity, including pre-experimental impact analysis, as described in Selec tion C riterion 4. This is a c ritica l factor inmanaging technical risk, maximising returns to the CRC Programme and participants, andproviding value to the taxpayer.

Budget and resource allocations

The planning for this CRC has sought to maximise the potential for adoption of new productsand technologies by increasing the alloc ation of resources to commercialisation andcommunication:

78% of the CRCs resources will be directed to integrated and industry-aligned researchcommercialisation and communications programs to maximise value from ProfitablePerennials development

12% of resources will be allocated to education and training in support of uptake and diffusionof the Profitable Perennials brand

548 contributed FTEs will be supported by the purchase of 354 FTEs; and

Management and administration costs will be limited to 10%.

The estimated operating budget for FFI CRC is based on careful matching of programinvestment with contribution to outcomes (see table below), following analysis of thepotential for product adoption in the three areas of market opportunity innovative farming

systems, new woody crop industries and NRM solutions for catchments. The table belowexcludes resource alloc ation to management and communications activities ac ross allprograms.

Investment across FFI CRC outcomes: ProgramTotal

ResourcesPer

annum% total

resources

Productivity growth in existing industries P1, P2 $44.8m $6.4m 48

Profitable new regional industries P3 $8.5m $1.2m 9

Salinity damage reduced P4 $10.6m $1.5m 11

Other environmental benefits P5 $9.9m $1.4m 11

Capacity building P6,P7 $8.7m $1.2m 9

Commercialisation/Utilisation $11.5m $1.6m 12

It is acknowledged that the CRC Programme will value staff in-kind resource at nominalvalues to ensure matching resources are provided. However, the core participantscontributions, and the value of overheads for cash-funded positions, will be valued at marketrates for purposes of determining equity in the research company. The non-staff in-kindcontributions in the resources estimates table have been valued at the CRC Programmesnominal rate for staff in-kind contributions. This removes from industry and research providerin-kind FTEs salary related on-costs and retains the imputed cost of rent and the value of

specialist equipment, as well as operating and support costs according to Programguidelines.


51/75


49

The management and administration component of the budget is based on the plannedorganisational structure (estimated salary costs) and estimated costs for operating acompany with a skills-based board. It is a flat structure with key program leaders cash fundedin part by the C RC in order to exceeds 50% time commitments to ensure delivery ofmilestones.

Firm commitment of cash and/or in-kind contributions

The CRCs committed cash resources from Industry ($14.35m) and Public ($5.7m)demonstrate strong support for the FFI CRC bid. Compared to the CRC Salinity, the new CRCwill commence with higher industry funding to be further increased with contracting of thegrazing systems projects under consideration. This reflects growing commitment to pushingthe boundaries of productivity growth within strategic natural resource managementobjectives. The confidence to deliver this is built upon the development of core expertisefrom the existing C RC. Industry funders are providing three times the level of cash fromresearch providers, a ratio that will increase during the life of the C RC. State agencyparticipants will play a dua l role through involvement as research users in industry extensionactivities and as research providers. They will contribute $2.1m million in cash and $34m of in-

kind resources. Universities and C SIRO will also make substantial contributions accounting for$21m of total resources, including $1.82m in cash.

The FFI CRC participants resolved in May 2006 that the new CRC would be headquartered atUWA, building on the strength of the current hosting arrangements for the CRC Salinity. Anon-staff inkind contribution from UWA of $546,000 has been included to provide for use ofoffice space and facilities at UWA. Other firm cash of $1.7m has been included in the Stage 2bid. This reflects the WA State G overnments commitment to CRCs headquartered in WA.

Strategies to obtain additional participants and resources

The CRCs business growth strategy will generate additional resources to accelerate theplanned timelines for delivering program outputs and lay the foundation for larger scaleadoption beyond the life of the CRC. Several projects currently under negotiation (discussedabove) have also been excluded from the financ ial tables in the Stage 2 application. Forexample, the grazing systems projects under consideration total $5.9m. The CRC will revise itsoriginal business performance targets ($5m in the business concept case) with a focus oncompany investments in woody crop industries (at least $3m for harvester development) andadditional revenue from consulting ac tivities and royalties ($1m). The Stage 2 bid hasretained the original seven year target of $33m of income from industry and public sourcesderived from business growth and performance.

This growth strategy is matched to the commercialisation and utilisation strategies in SelectionCriterion 2. It comprises:

Consolidating investment into the major CRC programs by the key industry R&D corporations adding to the core participant resources

Attracting additional private sector companies into commercialisation of business opportunities,products and services typically bilateral research contracts with the research company, someinvolving non-disclosure agreements

Earning revenue from services provided, where these activities are highly compatible withachieving the outcomes

Additional investment by CMOs and farmer groups to applied R&D projects, andcommercialisation and adoption activities projects and activities that will often be regional inscope, and

Drawing additional public sector R&D providers in Queensland to the collaboration, to ensure

the best expertise in the agro-c limatic zone shared with NSW.


52/75


53/75


54/75


55/75


53

> Fully operational with commercialisation plan developed J une 2010

> SGSL technologies implemented on 2,000 farms J uly 1905

> HIGHPak technologies trialled on 1,000 farms J une 2014

Output 4.5:SALTCAP land capability assessment tool for plant-basedsaline land management

December2007

> SALTCAP-1 launched December2007

> SALTCAP-2 launched December2011

> 500 trained and accredited users December2012

Output 4.6:SALTDecide hydrological modelling tool to measure theimpac t of water management using integrated plant-based and

engineering interventions both on-site and off-site

December2011

> SALT Dec ide launched J une 2011

> 60 trained and accredited users J une 2014

Output 6.3:Farm business/NRM simulation game (extension of SaltyBusiness)

December2010

> Delivery of 10 workshops with catchment bodies, policy advisers,scientists and students

December2009

> Delivery of workshops with catchment bodies, policy advisers, scientistsand students ac cording to demand

December2010

4. Other environmental benefits (Unpriced benefits including enhanced habitat values andecosystem services, protection of off-site biodiversity values and management of weed risk)

Output 5.1:Management and decision pac kages that promote farmingsystems that integrate production and biodiversity outcomes

J une 2014

> Developed and validated models refined as management packagesand linked to appropriate industry program training and applicationgroups

J une 2014

Output 5.2:BioRisk risk-based dec ision tool for hydrologica l ecosystemservices

J une 2014

> Beta testing with selec ted stakeholders J une 2012

> Licensed full application J une 2014

> Tool practised in six catchments (or sub-catchments). J uly 2014

Output 5.3:CAT Plus catchment dec ision tool for perennial vegetationstrategies to protect water resources in water supply catchments

J une 2014

> Licensed application of current CAT J une 2009

> Beta testing of CAT Plus with selec ted practitioners J une 2012

> Licensed application of CAT Plus J uly 2012


56/75


57/75


58/75


56

> Field testing (from 3 key sites) used to identify potential cultivars for moreintensive testing.

J une 2010

> Cultivars selected on the basis of multi-site field performance J une 2012

Output 2.3:EverCrop Decide new crop systems analysis tool tools that

integrate production and conservation objectives

December

2013> Analytical tools assembled and pre-experimental modelling, production

economic and hydrologic completedDecember2008

> Report on key existing species and system constraints and spatiallyexplicit opportunities in target landscapes

December2009

> Model development completed and preliminary tested December2011

Output 2.4:Feed grain quality salt/waterlogging-tolerant wheat J une 2014

> Lines with high fertility and in Australian backgrounds available for field

trials

December

2009

> Field evaluations completed December2012

Output 2.6:Breeding material for bread quality salt/waterlogging-tolerantwheat

December2014

> Most tolerant bread wheat germplasm identified from world collections December2010

> Most tolerant lines from progeny of wide-hybridizations identified December2012

> Field and other evaluation of most tolerant advanced breeding linescompleted

December2014

Output 2.7:Prospectus for development of perennial wheat J une 2012

> Acquire access to preliminary germplasm for field assessment J une 2008

> Complete field assessment of potential of unadapted 'perennial wheat'to deliver against production, yield and water use targets

J une 2011

> Use data, modelling and analysis of breeding opportunities andstrategies to assess the potential scale and economic impact of afuture perennial wheat industry.

J une 2012

Program 6 - Economic, Social and Policy Analysis

Output 6.1:Adoptability index assessment tool for the potential adoptionof FFI CRC products

J une 2012

> Identify and quantify components of the adoptability index. J une 2008

> Complete analysis of anticipated property turnover in the Murray-Darling Basin. Develop simple risk assessment tool for inclusion in AI.

December2010

> Analysis of implications of changes in agriculture for CRC adoption andcommercialisation

December2011

> New economic modeling to inform the AI. December2009


59/75


57

2. Profitable new regional industries ($170 million NPV new woody crops on 0.1 mhaagricultural land feeding new processing industries)

Program 2 - Future Cropping Systems

Output 2.5:Salt/waterlogging-tolerant wheat suitable for biofuel J anuary 2015> Lines with high fertility and in Australian backgrounds available for field

trialsDecember2009

> Field evaluations and selections for biofuel quality traits completed December2012

Program 3 - New Woody Crops and Products

Output 3.1: Wyalong mallee seed from FloraSearch December2012

> Establish breeding and selec tion infrastructure -seed nurseries and field

progeny test sites.

December

2007

> Establish clonal seed orchards. December2008

> Establish genetic ga in experiments. J une 2011

Output 3.2:Prospectus for prototype commercial harvester for short-cyclewoody crops

J une 2012

> Review biomass supply chain options, prepare conceptual specificationof preferred option and estimate development cost.

December2007

> Prepare business case for private and public investment in operational

prototype.

J une 2008

Output 3.3:Client feasibility reports for biomass supply and processingindustry investment

December2010

> Use economic analysis and water/growth model yields to show localand regional scenarios where biomass supply from short and long cyclewoody crops is economically competitive with annual plant agriculture.

J une 2008

> Use G IS and model outputs to predict volume, distribution and cost ofbiomass supply for proposed industry development.

December2009

> Conduct feasibility investigation of biomass supply for industry

developers

December

2009

> Prepare case study material for regional NR managers and economicplanners.

December2009

Output 3.4:Prediction capability with woody crop production from farmlayouts with access to variable water inputs.

J une 2012

> Selection of suitable modelling framework and case study sites to linklocal surface water run-off with yield of woody crop belts, and exploreinterface with CAT.

J une 2008

> Preliminary model calibrations and outputs produced based on datafrom study sites and outputs for early application.

December2010


60/75


61/75


62/75


60

> Catchment modelling packages selected, and conceptual frameworkfor ecohydrology of salinity threatened plants developed.

J une 2009

> Testing of modeled scenarios and framework completed. J une 2012

> Completion of management and decision tools J une 2013

> Tools refined in response to field experience. J une 2014

Output 5.4:Risk assessment products and management strategies toprotect biodiversity from weeds and genetic pollution and to minimiseweed control costs.

J une 2014

> CRC scientists trained in application of environmental risk framework. J une 2011

> CRC scientists trained in application of decision tools. J une 2012

> Weed risk assessment proc ess from previous CRC refined, and geneticrisk assessment framework developed

J une 2010

> Weed and genetic risk assessments combined into a singleenvironmental risk process.

J une 2011

> Decision tools for management of environmental risks in productionsystems completed.

J une 2012

> Package and its adoption evaluated. J une 2014

5. Capacity building ($360 million NPV attributable to more effective government policy andnational/regional investment programs)

Program 6 - Economic, Social and Policy Analysis

Output 6.2:NRM Investment Framework decision tool for selection ofpriority natural resource management investments

J uly 2013

> Complete development of NRMIF including biodiversity December2009

> Complete development of NRMIF including water quality December2011

Education and Training Program - Outputs and Milestones

1. Productivity growth in existing industries ($350 million NPV new perennial plant-based

farming systems on 7.4 million hectares (mha) of agricultural land)

Output 1.1:EverGraze Plus More livestock from perennial$ and Morelivestock from native perennial$ grasses in the high rainfall zone (>500 mm)

> Education and training pac kage delivered to farmers, advisors,consultants and C MAs resulting in practice change on 500 farms

J une 2009

> Site design through initial workshops with regional producer groupsfollowed by continuous feedback via the extension network

J une 2011

> One PhD student completed within EverGraze J une 2011

> EverGraze package delivered to at least 3000 end users through fielddemonstrations, technical forums and commercial partners J une 2011


63/75


64/75


62

> Agronomic packages developed and available for grain growers (withProgram 4)

December2012

3. Salinity damage reduced ($350 million NPV assumed conservatively that 1.6 mha ofagricultural land will have the onset of salinity delayed or prevented)

Output 4.1:HIGHPak improved performance livestock and pasturemanagement packages for saline land

> At least 1 postgraduate student completes PhD on livestockmanagement of saline land

December2013

Output 4.2:New salt tolerant pasture legume and grass cultivars fromPastureSearch

December2013

> Postgraduate student submits and passes thesis J une 2011

Output 4.3:New salt tolerant halophytic shrub cultivars from FloraSearch

> Postgraduate student complete study of the nutritive value of saltbush J une 2013

Output 4.4:National Saltand Service Centre - Providing a path to impact December2010

> Network staff established (6) to support participation and groupactivities; producer support sites, training modules and publications andfield days, contributions from third parties.

J une 2009

> The results of the whole-farm case studies are utilised as the basis forproducer network workshops (10)

J une 2010

> Field days and other participatory events have occurred at least asecond time on each of the 40 producer support sites.

December2010

Output 4.5:SALTCAP land capability assessment tool for plant-basedsaline land management

December2007

> SALTCAP 1- Training course developed, tested and adapted and thendelivered to saltland producers

December2009

> SALTCAP 2- Training course developed, tested and adapted and thendelivered to saltland producers

J une 2014

Output 4.6:SALTDec ide hydrological modelling tool to measure theimpact of water management using integrated plant-based andengineering interventions both on-site and off-site

December2011

> Training modules developed for target markets sectors (high valueassets, protec tion of high value natural assets and agricultural land)and training delivered

J une 2011

Output 6.3:Farm business/NRM simulation game (extension of "SaltyBusiness")

December2010

> Delivery of 10 workshops with catchment bodies, policy advisors,scientists and students

December2009

> Delivery of workshops with catchment bodies, policy advisors, scientistsand students according to demand.

December2010


65/75


66/75


67/75


65

Participant Contributions

ParticipantIn-kind

staff FTE

In-kind staff

value (000)

In-kind non-staff value

('000)

Cash

($000)

Total

(000)

Australian WoolInnovation Ltd

3.50 333 3,500 3,833

Charles Sturt University 21.35 2,529 350 2,879

CommonwealthScientific and IndustrialResearch Organisation

68.25 7,663 7,663

Department ofAgriculture and Food,

Western Australia59.50 6,965 350 7,315

Department ofEnvironment andConservation

31.50 3,570 1,050 4,620

Department of PrimaryIndustries and Resources

South Australia28.15 2,989 350 3,339

Department of PrimaryIndustries Victoria

91.70 9,380 9,380

Department of Water,Land and Biodiversity

Conservation

21.00 2,153 350 2,503

Enecon Pty Ltd 0.70 88 88

Forest ProductsCommission

2.10 263 263

Grains Research andDevelopment

Corporation3.50 333 5,250 5,583

Kondinin Group 0.70 88 88

Landmark Operations

Limited

42.00 4,011 350 4,361

Meat and LivestockAustralia

3.50 333 5,250 5,583

North CentralCatchment

Management Authority1.40 133 50 183

NSW Department ofNatural Resources

15.40 1,463 1,463

NSW Department ofPrimary Industries

79.95 8,124 8,124

Oil Mallee C ompany of 1.40 133 133


68/75


69/75


70/75


71/75


69

POWELL, John Cash Programme LeaderinCommercialisation/Utilisation

100

RENGEL, Zed In-Kind Key Researcher Professor 30 The University of

Western Australia

REVELL, Dean In-Kind Key Researcher Dr 60 CommonwealthScientific andIndustrial ResearchOrganisation

RICHARDSON,Daryll

Cash Key Staff inCommercialisation/Utilisation

100

RIDLEY, Anna In-Kind Programme Leader Dr 60 Department of

Primary IndustriesVictoria

ROBERTSON,Michael

In-Kind Key Researcher Dr 50 CommonwealthScientific andIndustrial ResearchOrganisation

RYAN, William In-Kind Key Staff inCommercialisation/Utilisation

Dr 10 Kondinin Group

SANFORD,

Paul

In-Kind Key Researcher 70 Department of

Agriculture andFood, WesternAustralia

SLINGER, Deb In-Kind Key Researcher 40 NSW Departmentof PrimaryIndustries

STICKELLS,Mark

Cash Key Staff inCommercialisation/Utilisation

100

THOMPSON,Andrew In-Kind Key Researcher Dr 50 Department ofPrimary IndustriesVictoria

VERCOE, Phil In-Kind Key Researcher Dr 20 The University ofWestern Australia

WALKER, Glen In-Kind Key Researcher Dr 20 CommonwealthScientific andIndustrial ResearchOrganisation

WALLACE, Ken In-Kind Programme Leader 50 Department of

Environment andConservation


72/75


70

Planned Allocations

Breakdown of Budget ($000)

07-08 08-09 09-10 10-11 11-12 12-13 13-14 Total

Income - CRC Program 4,000 5,200 5,200 5,200 5,200 5,200 4,125 34,125

Income - Other 3,160 3,310 2,860 2,860 2,610 2,610 2,610 20,020

7,160 8,510 8,060 8,060 7,810 7,810 6,735 54,145

Planned Expenditure %

Research Programs

Program 1 - Livestock 1,547 1,710 1,560 1,560 1,635 1,690 1,710 11,412 21.1

Program 2 - Crops 785 1,005 1,035 1,035 1,035 1,085 990 6,970 12.9

Program 3 - WoodyIndustries 405 480 455 380 405 505 455 3,085 5.7

Program 4 - Saline 615 562 612 605 655 705 705 4,460 8.2

Program 5 - Biodiversity 540 540 490 490 615 665 400 3,740 6.9

Program 6 - Economics 340 365 340 290 290 362 247 2,235 4.1

Program 7 - Education& Training 587 1,237 1,725 1,482 912 345 145 6,435 11.9

Commercialisation 772 800 822 822 822 822 822 5,685 10.5

Management andGovernance 1,042 742 842 742 742 842 792 5,747 10.6

Communications 625 625 625 625 625 625 625 4,375 8.1

7,260 8,067 8,507 8,032 7,737 7,647 6,892 54,145


73/75


71

Program shares

Program Future Livestock Production Notes

Cash resources $5.67m FFI CRC investors$5.7m CRC Program

Inkind FTE 23 FTE per annum

Inkind $ resources $16.34m 27.8% of tota l

Total Resources $27.8m 24.5% of total

Key Industry Investors MLA $3.675mAWI $1.4m

Program Future Cropping Systems Notes


Inkind FTE 12.8 FTE per annum

Inkind $ resources $10.1m 17.2% of tota l


Key Industry Investors GRDC - $3.15m

Program New Woody Crops and Products Notes

Cash resources $1.085m FFI CRC investors$2m CRC Program


Inkind $ resources $5.4m 9.3% of total


Key Industry Investors GRDC - $0.525mDEC WA - $0.525m

Program Farming Saline Landscapes Notes

Cash resources $3.185m FFI CRC investors1.275m CRC Program


Inkind $ resources $7.4 12.6% of tota l


Key Industry Investors AWI $1.4m

MLA $0.525mGRDC - $0.525m


74/75


75/75


Program Governance, Management andCommunications

Notes



Inkind $ resources $0.66m -


Key Industry Investors

Summary

Program Summary across all activities Notes

Cash resources $20.02m FFI CRC investors

$34.125m CRC Program

Cash currently 37% FFI, 63%

CRC Program businessgrowth strategy targeting$11.6m over 7 years toapproach matching cashinvestment

Inkind FTE 78.3 per annum 548.1 over 7yrs

Inkind $ resources $59.2m CRC Program values

Total Resources $113.4m CRC Program 30% ofresources at start up

Key Industry and otherinvestors

MLA - $5.25mGRDC - $5.25m

AWI - $3.5m

DEC WA - $1.05m

UWA - $0.7m plusaccommodation

WA State Govt - $1.7m

Minimum commitment fromRDCs at start-up

UWA contribution cash andinkind for hosting CRC

Grant for WA based CRC

Documents

Ffic Rc Business Plan