KEY POINTS:
The rapid rise of the once nebulous concepts of climate change and sustainability as political currency has stirred up a perfect pecuniary storm for agricultural science in this year's Budget.
Last year's paltry hiccup of just $4 million a year for four years has more than tripled, swelling the pool of available funds needed to find a solution to the primary sector's disproportionately hefty contribution to New Zealand's greenhouse emissions.
Some $28 million is now earmarked for "improving sustainability and primary sector productivity" plus $14 million for research into innovative foods and beverages.
And if the money that pastoral industry peak body Pastoral 21 is set to match to the $12 million extra flagged by the Government is taken into account, that rises to $54 million - or $13.5 million a year for four years.
Andy West, chief executive of the country's largest Crown Research Institute, says if it's lucky, AgResearch might be able to pick up $5 million a year from that sum.
But he points out that on a budget of $150 million a year, that represents a mere 3 per cent increase.
"It's less than scientific inflation, but it is going in the right direction."
He also notes that there's actually less money in the Budget for Pastoral 21, the organisation AgResearch set up in conjunction with Fonterra, and which last month awarded the CRI $34 million for two projects to boost on-farm productivity while cutting environmental fallout.
Despite the overall boost, West says that what the Government announces and what AgResearch gets are completely unrelated.
"It's all contestable, it depends how we bid."
And although the Budget includes $16 million for "building science capability" at Crown Research Institutes, West expects AgResearch will receive only a slight boost, because of its acquisition this year of textile research firm Canesis.
"While there's a useful amount of money in there it's going to very selectively go to a small bunch of CRIs and not ours."
He says the formula for determining capability funding discriminates against institutes, such as his, that work with the private sector.
"It produces a perverse incentive for the Crown to focus on the Crown, whereas the incentive should be for us to focus on the private sector to create wealth and sustainability."
Nevertheless the normally outspoken West said overall it was a good Budget for science and the Government was to be congratulated for its commitment to innovation.
He says R&D tax credits might even spark further private sector funding for science, although he warned that since the scheme was not capped the Government could be landed with far greater costs than the estimated $630 million over four years.
"If industry wants to go and invest more in R&D it will cost the Government more."
WARM FUZZIES A decade-long study of the impact of climate change on the pastoral sector suggests that increased concentrations of carbon dioxide in the atmosphere could produce positive effects for pasture growth. However, the longer-term effects of such elevated levels of greenhouse gases are still hazy and could even sabotage the benefits.
The results of an AgResearch study looking at whether CO2 at concentrations of 475 parts a million - which scientists believe today's 380ppm could rise to within 30 years - could act as a grass fertiliser indicate increased pasture production is possible under such conditions.
But AgResearch senior scientist Paul Newton said the longer-term effects of heightened C02 levels are less certain, and could see a reduction in the availability of soil nitrogen for plant growth and lower protein content in the feed. Although a number of similar experiments have been conducted worldwide, Newton said this one was unique in that grazing stock were present.
He said it was important to determine whether current and future technologies such as nitrification inhibitors and high-sugar grasses would function in an altered environment.
The information obtained so far makes climate scenarios more predictable, allowing simulation of pasture growth or nutrient leaching in different areas of the country, Newton says. It could also help farmers prepare to make the best of the changed climate, such as using adapted plant cultivars and fertiliser formulations.
"What we expect to happen is that there will be some areas where the results are quite positive."
Newton says the primary sector has seen itself as the fall guy for climate change, with nothing but costs attached to it.
"But if you look at impacts that are likely and the potential adaptations, there's actually quite a lot that could be gained here."
He said New Zealand had good rainfall and was not subject to climatic extremes and so was likely to be less influenced by climate changes than many of its competitors.
DAIRY DUES The last of the Powdergate defendants, Sean Robert Miller - now a free man - says his "effective acquittal" avoids a "very public airing" of dairy industry politics.
Millar was discharged without conviction on Thursday, May 10, having earlier pleaded guilty to presenting false documents in a multimillion-dollar scam in which milk powder illegally bypassed the New Zealand Dairy Board's export monopoly.
But the former dairy executive, who until this month denied his involvement in a scandal that stretched back more than a decade, points out that the guilty pleas made on May 3, followed a sentencing indication from the judge that he would be discharged without conviction, which "under section 106(2) of the Sentencing Act is deemed to be an acquittal".
Miller, who is no longer in the dairy industry, admitted six charges laid under the Customs Act and was ordered to pay $6000 towards the cost of prosecution.
"It's an amicable resolution to what would have been otherwise a very public airing of dairy industry politics," said the former executive of Kiwi Co-operative Dairies, which merged with the New Zealand Dairy Board in 2001 to form Fonterra.
The "unusual process" of making a guilty plea after a sentencing indication resulted from the fact that neither he nor the Serious Fraud Office wanted to go to trial, he said.
Miller was one of seven men charged for their part in the illegal export of millions of dollars of dairy products between 1997 and 2001.
After the Serious Fraud Office downgraded the original charges of conspiracy to defraud to producing false customs documents, Miller's co-accused - Paul Marra, Malcolm McCowan, Terence Walter, William Cottee, Stephen Wackrow and William Winchester - admitted the charges a year ago and were fined $58,500 in total.
It seems Miller now agrees with Marra, who last May told the Business Herald: "If we had gone through the court case it would have been the biggest blood-letting the dairy industry has been through."
Meanwhile, a milestone looms for the very export quotas flaunted under the scam and which subsequently passed to Fonterra on its formation.
Agriculture Minister Jim Anderton expects to make an announcement on their reallocation in a matter of weeks. He said people "wouldn't be left hanging" about some $600 million of quota that expire between June this year and 2009.
