Federated Farmers: Widespread displeasure has agriscience on edge

New Zealand has capable agri-scientists, but there is conjecture to whether organisational structures are frustrating their research.

The Government recently announced it is injecting $80 million into private research and development as part of the 2015 Budget. This is welcomed by the primary sector, but where exactly does the remaining R&D investment go and do we have the necessary systems to optimise the investment? John Donnachie reports

Research and development (R&D) is globally acknowledged as a key enabler towards a country's productivity, long-term economic growth, competitiveness and ultimately prosperity.

Contrary to our celebrated frontier heritage of Kiwi ingenuity and number eight wire, historically, New Zealand governments have overlooked the importance of R&D and investment.

It's been well publicised we rank poorly against nations of comparable size, with R&D investment at 1.27 per cent of GDP -- that's half the OECD average of 2.4 per cent.

However, the National Government has recently addressed intent to address this historical inertia with overall science investment to reach $1.5 billion -- a 70 per cent increase since 2007, (51 per cent inflation adjusted).

In the meantime, the primary sector (our largest export) is being boosted by considerable investments in the Primary Growth Partnership and the Sustainable Farming Fund (SFF). Private investment in R&D has been a Government objective and it is anticipated this strategy of increased funding will align New Zealand with fellow trading partners on investment levels.

Agriculture receives the most Government R&D funding and has the second highest R&D expenditure (after manufacturing). Behind the incentives there's a sense the agriscience sector is dysfunctional and, in general, underachieving.

Agribusiness Professor Jacqueline Rowarth co-authored a paper, Research and Innovation, which raises questions about funding mechanisms and the myriad of organisations which share those proceeds.

"Our model for R&D funding is unique, as no one else in the OECD has instigated such a level of competition. Policy-makers have had a look and commented 'interesting', and decided 'no thanks'," she said. "In the competition, it is extremely difficult to tell where money has or hasn't been allocated as there are many sub-contracts. There is also confusion about new money investment and rejigged budgets -- inside organisations as well as outside.

"Ministers seem to prefer announcing 'new funds' for new areas over increases in funding for existing areas -- hence the patchwork. The problem they have is being able to say what they've done in a three-year election cycle."

The professor knew of one scientist who was involved in 27 projects partly because his expertise was required to gain the funding, for being in only one project could mean a job loss if the project fails.

This environment created a culture of confusion and distrust with scientists distracted from their core role.

"Good quality science requires immersion. That's not possible when you are bidding for projects and having endless paperwork to do," she said.

An unintended consequence of the new era of trying to justify research funds is the proliferation of work involving modelling and surveys rather than cutting-edge science tested in the field.

Federated Farmers national vice-president Anders Crofoot has said a third of the papers offered to the New Zealand Grassland Association covered subjects that "wouldn't generate a return on farm [and unlikely] to make a difference to the economy or environment".

Regular activity of allocating funds requiring frequent reports rather than fundamental research has experienced scientists questioning the value of the process and to what end.

The existing contestable bidding fund model is a legacy of treasury determining that all R&D funding should be 100 per cent contestable.

Professor Rowarth said the current Crown Research Institutes' (CRIs) structure adhered to a top down governance, which granted managers the decision making on research and funding.

"This is expensive and demoralising for scientists, as they are the best people to know where advances might be made, but are being told what to do next in order to get funding," she said.

This outcome was firmly embedded throughout many agri sector companies, with an escalation in internal reporting towards targeted outcomes often the benchmark rather than "pursuit of excellence and knowledge".

It was common practice for those reports to stay "in-house" creating a lack of transparency.

The largest CRI, AgResearch was "hemorrhaging specialised staff" with a 14 per cent decrease in science staff and a 25 per cent increase in management and support positions.

This flight of scientists resulted in a loss of capability and impacted on staff morale.

At a Select Committee recently, AgResearch chief executive Tom Richardson was quizzed on an internal survey which highlighted staff discontent, with only 9 per cent indicating they felt engaged.

Mr Richardson also confirmed funding from MBIE and the Primary Growth Partnership had been culled by $5.3 million for a half yearly period.

President of the NZ Grassland Association Warwick Lissaman said AgResearch was importing overseas scientists to arrest the loss in capability. But what this achieved was debatable as many returned to their homeland after a few years, taking with them what they had learned. He also worried about the shift to centralised hubs.

"I can't see how the farmer and scientist are going to engage. I just hope there's not another agenda at play. Could we be seeing the eventual breakup of CRIs?" he said.

Leadership advocate Steve Denning believes R&D is optimised when the environment is enabling, not controlling, with particular focus on building a knowledge-based workforce which generates longer-term value.

He also insists R&D and production are interrelated. The days of big conglomerates controlling R&D, viewing it as an afterthought and an unwelcome business expense, no longer suffice.

To drive innovation companies should be continually focused on developing technologies, which is of value to the customer rather than the shareholder.

Mr Denning points to an increasingly competitive global marketplace, where borders are disappearing and information flows are diffused swiftly and mastering this was as vital as in-house R&D funding.

"R&D spending in particular is a poor measure or determinant of the innovation on which the future of the firm rest," he said.

Restructuring and amalgamation, a reoccurring feature of the agriscience sector, was adding to malaise where chief executives or managers rarely stayed after three years.

This led to research ending prematurely, with new management exploring other agendas, leaving scientists disillusioned with uncertainty around future research and job security.

The United Nations research suggests it takes eight years for a project to break even - and that's a good one," said Professor Rowarth. For biological researchers, they take until their 50s to reach their prime ..."

When the professor casts her eye over the agriscience research entities in New Zealand, she struggles to find any concrete examples of innovation.

"Most biological research is incremental. We're dealing with a complex system and making progress, but agriscience takes time to mature, unlike other sciences."

A recent NZIER report, meanwhile, forecasts the Primary Growth Partnership (PGP) could return up to $6.4 billion to the New Zealand economy by 2025, and up to $11.1 billion if the aspirational stretch of programmes is realised, the innovations are taken up widely and the research and development is successful.

MPI's Michael Jamieson, acting director PGP, said PGP programmes were delivering "exciting results" and they would provide "long-term economic, environmental and other benefits".

Mr Jamieson provided examples: the Transforming the Dairy Value Chain initiative and precision seafood harvesting. Another is mussel farming, where mussels can be selectively bred like sheep or cattle.

Professor Rowarth, however, is not convinced.

The PGP, she said, was industry-driven, and short-term in outlook because of the need to justify funding.

It lacked transparency on the status of projects and there is no evidence they are enhancing our primary sector intellectual property.

And the Sustainable Farming Fund?

"Some of what is being investigated is well meaning, but reflects interest rather than hard science. It is disappointing to me that public money goes on investigation of approaches or products that have been shown not to work in formal evaluations," she said.

According to the MPI website, the Sustainable Farming Fund has 29 projects approved for funding. This included research for hazelnut cultivation and novel strategies to increase potato yields.

The Government and industry, otherwise, had co-invested $720 million into 20 PGP programmes, which included all agri-sectors.

This included a PGP commitment to co-invest a minimum of $500,000 over a lifetime of a programme, which for a seven-year project equated to about $71,000 annually.

Agriculture was also attracting private investment and this was increasing (17 per cent 2010-12), but it tended to produce short-term goals while fostering suspicion if unintended, that findings lacked independence and were driven by funders interests.

Private funders were naturally selective in choosing where to invest, whereas the research with long-term, national implications - biosecurity, environment and climate change - were public funded.

The National Farming Review approached Ravensdown Fertiliser and spoke with general manager Innovation & Strategy Mike Manning.

He said Ravensdown was happy with its 50/50 funding model. With MPI, though, the route to acquiring the funding was "arduous".

Mr Manning said it ultimately depended on how much of a risk you presented for securing funding.

Ravensdown were medium risk and that meant investment outlay was shared.
He said his organisation had a clear management strategy.

The business case for acquiring funding rested on MPI criteria that it provided "clear public benefit" and generated more export value to the economy.

"We took our research idea to a valuation panel and that was a six-month process to complete. [Afterward] our business case went to MPI's director general for recommendation and that took a year."

Mr Manning said Ravensdown had secured a seven-year tender for fertiliser research, which would be periodically reviewed. For now, funding and research was sufficient and instrumental in helping devise ways of using fertiliser "more sensibly".

Warwick Lissaman is cautiously optimistic that the agriscience community can regain a sense of equilibrium, as the right ingredients existed to rejuvenate and grow agriscience capability.

"We (New Zealand) are one of the leading lights in agriculture. We just have to work out as a country where we are going and what we, as a country, want."

Professor Rowarth looks to Germany and the United Kingdom for fixing the malaise, which has encroached upon the agriscience community.

"There should be focus on basing 'core research centres' around distinguished individuals - those essentially with a track record.

"This kind of approach instigated the Marsden Fund, but the original concept has changed; now it is more project-based," she said.

The Royal Society of New Zealand might be helpful, too, with its science manifesto, which could be utilised to devise a suitable model for the Agri science sector.

Mr Crofoot, meanwhile, wants more "bang for buck".

We should not only avoid spending valuable research dollars on administration, but we should also avoid spending it on research that can never produce a dollar return.

He said New Zealand farmers had a long history of adopting innovations, though quantifying that against actual R&D investment was problematic as generally technologies and new ideas were adopted by farmers watching other farmers, and this might take several years for research results to bear fruit.

The complex nature of agricultural innovation and the variables that entailed might suit one farmer but not the other, depending on his farming system, Mr Crofoot said.

On-farm research was logical and provided more robust methodology where long-term research, whether commercially driven or not, ideally fits the desired aspiration of evidence-based science as farmers see it in action on-farm.

Prior to publication, The National Farming Review contacted MBIE about some of the issues raised in this article.

The Ministry responded and says it is developing a National Statement of Science Investment (NSSI).

A MBIE spokesperson said, "[This] will create a long-term strategic direction for New Zealand's science system."