independent performance review: final report · this report presents the findings of an independent...
TRANSCRIPT
Independent
performance review:
final report
AgriFutures Australia 15 April 2019
AgriFutures Australia| Independent performance review: final report
1 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
ACKNOWLEDGEMENTS
Forest Hill Consulting and its collaborators wish to thank the numerous people who assisted the consultancy
team in the conduct of this review. Special thanks are extended to John Harvey, Louise Heaslip, Michael Beer,
Belinda Allitt, Lily Wilson and Kirsty McKee, and all the other staff at AgriFutures who promptly responded to
our requests for information or assistance to organise meetings with stakeholders. Our thanks are also
extended to the numerous industry participants and service providers who provided time for the interviews.
DISCLAIMER
The information contained in this document has been gained from anecdotal evidence and research. It has
been prepared in good faith and is based on a review of selected documents and interviews with stakeholders
including AgriFutures directors and management, Commonwealth Department of Agriculture and Water
Resources personnel, members and executive of National Farmers’ Federation and the Australian Chicken
Meat Federation, levy payers from ten industries, industry representatives, people and leadership participants
and alumni, research providers and other stakeholders. Neither Forest Hill Consulting nor its servants,
consultants, agents or staff shall be responsible in any way whatsoever to any person in respect to the report,
including errors or omission therein, however caused.
DOCUMENT VERSION
REPORT STAGE
AUTHORS DATE REVIEWERS REVIEW DATE
Interim draft Alex Ball, Scott Williams, Chris
Wilcox, Russell Pattinson
2/12/2018 AgriFutures management and
Board
6/12/18
Draft Alex Ball, Scott Williams, Chris
Wilcox, Russell Pattinson
13/12/18 AgriFutures management and
Board, DAWR
15/4/19
Final Alex Ball, Scott Williams, Chris
Wilcox, Russell Pattinson
15/4/19
CONTACT DETAILS
PO Box 465 Creswick VIC 3363
Scott Williams: +61 413 059 190, [email protected]
AgriFutures Australia| Independent performance review: final report
2 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
AgriFutures Australia| Independent performance review: final report
3 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
CONTENTS
EXECUTIVE SUMMARY ..................................................................................................... 6
ACRONYMS AND ABBREVIATIONS ................................................................................ 12
1. INTRODUCTION ....................................................................................................... 14
1.1 Purpose of the review ............................................................................................................................ 14
1.2 Review methodology ............................................................................................................................. 15
2. OVERVIEW OF AGRIFUTURES AUSTRALIA ......................................................... 17
2.2.1 Overview ................................................................................................................................................................ 17
2.2.2 People and Leadership .......................................................................................................................................... 18
2.2.3 National Challenges and Opportunities .................................................................................................................. 18
2.2.4 Growing Profitability (for levied industries) ............................................................................................................. 20
2.2.5 Supporting New and Emerging Rural Industries .................................................................................................... 20
3. THE BOARD AND GOVERNANCE .......................................................................... 25
3.1 Structure of the Board ............................................................................................................................ 25
3.2 Committees ............................................................................................................................................ 26
3.3 Board practice ........................................................................................................................................ 27
3.4 Governance documentation ................................................................................................................... 29
3.5 Risk management and compliance ........................................................................................................ 30
3.6 Management team ................................................................................................................................. 30
3.7 Corporate personality and culture .......................................................................................................... 32
4. PLANNING AND REPORTING ................................................................................. 33
4.1 Overview ................................................................................................................................................ 33
4.2 Strategic plan ......................................................................................................................................... 33
4.3 Annual operational plans ....................................................................................................................... 36
4.4 Annual reports ........................................................................................................................................ 38
4.5 Performance against plans .................................................................................................................... 38
AgriFutures Australia| Independent performance review: final report
4 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
5. RESEARCH AND INNOVATION MANAGEMENT AND DELIVERY ......................... 43
5.1 R&I procurement process ...................................................................................................................... 43
5.2 Industry consultative processes ............................................................................................................. 44
5.3 Program management and reporting ..................................................................................................... 45
5.4 RD&E collaboration................................................................................................................................ 45
5.5 Extension and adoption ......................................................................................................................... 47
5.6 Monitoring and evaluation ...................................................................................................................... 48
5.7 Intellectual property management ......................................................................................................... 49
6. LIAISON WITH STAKEHOLDERS ............................................................................ 50
6.1 Liaison with levy payers and industry Programs ................................................................................... 50
6.1.1 Stakeholders – general .......................................................................................................................................... 50
6.1.2 Representative Bodies ........................................................................................................................................... 50
6.1.3 Levied Industries .................................................................................................................................................... 51
6.1.4 Emerging Industries ............................................................................................................................................... 52
6.1.5 Industry Advisory Panels ........................................................................................................................................ 53
6.2 Liaison with RD&E Providers ................................................................................................................. 54
6.3 Liaison with government ........................................................................................................................ 54
7. DELIVERY OF BENEFITS ........................................................................................ 56
7.1 Introduction ............................................................................................................................................ 56
7.2 Conduct of impact assessments ............................................................................................................ 56
7.3 Measurement methodology ................................................................................................................... 58
7.4 Demonstrated benefits ........................................................................................................................... 59
7.5 Communicating the demonstrated benefits ........................................................................................... 61
7.6 Stakeholder perceptions of value .......................................................................................................... 62
8. THE AGRIFUTURES RELOCATION ........................................................................ 65
9. CONCLUSIONS AND RECOMMENDATIONS ......................................................... 67
APPENDIX 1: KEY DOCUMENTS REVIEWED ................................................................ 70
AgriFutures Australia| Independent performance review: final report
5 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Acts and funding agreement.............................................................................................................................................. 70
Corporate and governance ................................................................................................................................................ 70
Strategic and operational plans, annual reports, processes .............................................................................................. 70
Research investment and reports ...................................................................................................................................... 71
Monitoring and evaluation ................................................................................................................................................. 71
Surveys and communications............................................................................................................................................ 71
APPENDIX 2: OBLIGATIONS OF AGRIFUTURES UNDER THE FUNDING AGREEMENT .................................................................................................................................. 72
APPENDIX 3: OBLIGATIONS OF AGRIFUTURES UNDER THE PIRD ACT ................... 81
LIST OF TABLES
Table 1: Forecast income and expenditure 2017-18 to 2021-22 ..................................................................... 21
Table 2: Key financial figures for AgriFutures, 2015/16 to 2018/19 ................................................................. 22
Table 3: AgriFutures’ current Board composition ............................................................................................ 25
Table 4: Summary of current AgriFutures-managed RD(&E) plans ................................................................ 35
Table 5: AgriFutures achievement of KPIs ...................................................................................................... 39
Table 6: Summary of results from impact assessment of AgriFutures RD&E projects under each industry or
industry grouping ...................................................................................................................................... 60
Table 7: Producer ratings of AgriFutures Australia in 2018 survey ................................................................. 63
Table 8: People and Leadership participants’ ratings of AgriFutures Australia in 2018 survey ...................... 63
LIST OF FIGURES
Figure 1: AgriFutures logic framework for the National Challenges and Opportunities arena ........................ 19
Figure 2: Expenditure in arena 3 (Levied industries) from 2015/16 to 2017/18............................................... 23
Figure 3: Expenditure in arena 2 (National Challenges and Opportunities) including external funding (e.g.
RR&D4P programs) 2015/16 to 2018/19 .................................................................................................. 24
AgriFutures Australia| Independent performance review: final report
6 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
EXECUTIVE SUMMARY
This report presents the findings of an independent performance review by Forest Hill Consulting of the Rural
Industries Research and Development Corporation (RIRDC), now known as AgriFutures Australia
(AgriFutures)1. The purpose of the review was to assess how well AgriFutures is meeting its obligations to the
Commonwealth Government, levy payers and other stakeholders as set out in its Funding Agreement 2015-
19, the Public Governance, Performance and Accountability Act 2013 (PGPA Act) and in the Primary Industries
Research & Development Act 1989 (PIRD Act). The Funding Agreement requires that the review be completed
six months before the expiration of the agreement, that is by 4 June 2019. In addition, the review examined
the success of the relocation of AgriFutures from Canberra to Wagga Wagga in New South Wales.
The review involved several concurrent phases including an extensive review of documents (listed in Appendix
1) and consultation through face-to-face or telephone interviews with 67 stakeholders including AgriFutures
Board and management, National Farmers Federation (NFF), Australian Chicken Meat Federation (ACMF),
advisory panel chairs and members, individual levy payers, People and Leadership arena participants, the
Department of Agriculture and Water Resources (DAWR), the Council of Rural R&D Corporations (CRRDC)
and service providers (including research agencies and consultants). In addition, stakeholders were provided
the opportunity to make a submission to the review via a dedicated website that was publicised through the
AgriFutures contact list.
The interim findings of the review were presented to the AgriFutures Australia leadership team by
videoconference, in order to test the findings for accuracy and completeness. Interim findings were also
discussed in a face-to-face meeting with the AgriFutures Board at its meeting of 15 October 2018 in Canberra.
This report synthesises the outputs from all those activities.
Readers of this review should take into account the recent history of AgriFutures / RIRDC. In the period
between early 2016 and late 2017 the organisation underwent significant change including the appointment of
a new Managing Director, relocation from Canberra to Wagga Wagga, an almost total change in staff (resulting
in a huge loss of corporate memory and relationships), the development of a new strategic plan (focus), the
launch of a new name and the appointment of a significantly new Board. This contextual ‘backdrop’ is referred
to in several sections of this report and warrants recognition as it introduced many challenges not usually
encountered by RDCs in the lead up to an independent performance review.
AgriFutures is establishing itself as a well-managed, high-performing organisation that is well respected by
stakeholders, particularly in arenas 1 (People and Leadership) and 2 (National Challenges and Opportunities).
Corporate governance is strongly embedded in the company and compliance with the considerable obligations
conferred upon statutory RDCs is very high. The Board and management are well regarded and respected for
their experience and networks. AgriFutures has an excellent relationship with the Commonwealth Government
and is highly collaborative with other RDCs. There is no evidence for AgriFutures having failed to fulfil, or being
1 Referred to, for the sake of simplicity, as ‘AgriFutures’ throughout this report
AgriFutures Australia| Independent performance review: final report
7 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
at risk of not fulfilling, any of the obligations imposed by its Funding Agreement with the Commonwealth, the
PGPA Act or the PIRD Act.
The transition from RIRDC to AgriFutures has resulted in the creation of some important cross-sectoral
initiatives. AgriFutures is becoming recognised as a leader in the ag-tech ecosystem and has provided an
important catalyst to generate awareness and interest through evokeAG; an industry event to be held in
Melbourne in 2019.
Given the quite significant change in direction that AgriFutures has taken, as well as the almost total change
in staff compared to RIRDC, it is not unexpected that some relationships with the levied (arena 3) and emerging
industries (arena 4) would be challenged and there have undoubtedly been shortcomings in this regard.
AgriFutures needs to continue to build its RD&E management capability and relationship management. It also
needs to ensure that sufficient resources (at all levels) and organisational balance are provided to extract the
best possible outcomes for all stakeholders. The current restructuring of AgriFutures and the additional
resources being made available will assist in this regard.
Assessments of the outputs and impacts from RD&E projects delivered by AgriFutures (and RIRDC) clearly
indicate that considerable benefits have been achieved, although AgriFutures could improve its communication
of the value from its activities.
The move from Canberra to Wagga Wagga was a very considerable undertaking, involving not only a change
in a geographical location but also a change in the Board, a change in scope / focus and a huge change in
staff. All four elements presented both opportunities and challenges, but it is generally acknowledged that the
transition has been very positive.
A summary of the review findings against the terms of reference is shown below (note that whilst the terms of
reference referred to RIRDC, the name AgriFutures is used throughout this report, as noted above).
TERMS OF
REFERENCE
SUMMARY
Assess the performance of AgriFutures in meeting its
obligations under the [Primary Industries Research &
Development] PIRD Act and the Funding Agreement
with the Commonwealth
AgriFutures has met its obligations under the PIRD
Act and Funding Agreement. AgriFutures has a
very strong focus on and systematic approach to
managing risk and ensuring compliance.
AgriFutures Australia| Independent performance review: final report
8 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Assess AgriFutures development and implementation
of its Strategic R&D Plan, Annual Operational Plan,
Risk Management Plan, Fraud Control Plan and
Intellectual Property Management Plan, and the
AgriFutures effectiveness in meeting the priorities,
targets and budgets set out in those plans
The Strategic R&D Plan 2017-21 was developed
through extensive consultation and is very
comprehensive. There is clear line-of-sight of
arenas, priorities and targets from the current
strategic plan to AOPs and through to the most
recent annual report, although recommendations
have been made for minor improvements in
transparency of performance reporting. Fraud
control, risk management and IP and
commercialisation plans are robust and actively
followed.
Assess the efficiency
and effectiveness with
which AgriFutures has
carried out these plans
including:
Liaison with stakeholders Liaison with stakeholders in the People and
Leadership and National Challenges and
Opportunities arenas are very good. Relationships
with the levied and emerging industries are
developing and improving after the transition to
AgriFutures. There is a strong respect of both the
board and management from other industry
organisations and government.
Cross-RDC collaboration AgriFutures is a very strong and highly
collaborative co-investor in RD&E, notably through
the Rural R&D for Profit program, the National
Rural Industries forums and evokeAG.
Corporate governance Corporate governance is generally excellent. The
appropriate documents are in place and there is a
strong focus on and systematic approach to
managing risk, particularly compliance risk. Two
opportunities for improvement, concerning Board
performance reviews and development of a
significant document register for both internal and
external policies, have been identified.
Industry strategy and
delivery, including the
opportunity for stakeholders
to influence the investment
of funds and the Return on
Investment achieved
AgriFutures consultative process for RD&E
priorities through the advisory panels provides for
very strong industry input to its investment of funds
and procurement of RD&E. There is an opportunity
to improve this process but industry ownership
through the advisory panels should not be
compromised.
AgriFutures Australia| Independent performance review: final report
9 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Assess the efficiency and effectiveness of AgriFutures
investments in RD&E
AgriFutures investments in RD&E are delivering
effectively and efficiently. The challenges brought
about as a result of the transition to AgriFutures in
relation to arenas 3 and 4 are noted and ongoing
engagement and communication with key industry
stakeholders is required.
Assess the delivery of benefits to AgriFutures
stakeholders and community in general,
foreshadowed by those plans, including an
assessment of the degree to which AgriFutures
investments have met the needs of stakeholders
AgriFutures uses a robust methodology to assess
its delivery of benefits to the industry and
community in general. The assessment shows that
AgriFutures’ investments are delivering substantial
benefits.
Assess the relocation of AgriFutures to Wagga
Wagga, to determine what aspects of the process
went well and what lessons can be learned
The relocation to Wagga Wagga of AgriFutures
was a very considerable undertaking, involving a
change in geographical location, a change in scope
/ focus, a change in the Board and an almost total
change in staff. In general, the move to a regional
location was well received by stakeholders and
provides a good example of a positive outcome of
a move of an entity to a regional community. An
important lesson is that prior to and during such a
transition there should be an effective and well-
documented handover and induction process
particularly for new staff, although the difficulties of
achieving an effective handover given the
uncertainty and circumstances around the
AgriFutures relocation are noted in this report. A
further lesson, as noted above, is that maintenance
or development of relationships with partner
industries during the transition is fundamental to
ensuring that industry acceptance of the relocation
is high.
The review has identified several areas in which improvements might be made to the performance of
AgriFutures. These are, for the most part, concerned with industry engagement, RD&E processes and the
reporting of performance. Fifteen recommendations are made. These are listed below, and each is rated either:
Critical: should be implemented as a matter of urgency in order for AgriFutures to meet its legal and
regulatory obligations.
Important: actions that are expected to deliver significant benefits to the company and industry.
Better practice: expected to deliver incremental performance improvements.
AgriFutures Australia| Independent performance review: final report
10 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
RECOMMENDATION PRIORITY
1 The AgriFutures Board should consider a schedule of two board performance reviews
over each appointment period, including the possibility of an external review in year
three. These reviews should include evaluation of the Board and Audit Committee and
their respective chairs.
Better
practice
2 The AgriFutures Board should consider establishing a committee of the Board to
advise it on people-related matters, possibly including succession planning, internal or
external performance reviews and shaping AgriFutures’ corporate culture.
Better
practice
3 AgriFutures should consider simplifying its governance documentation by compiling its
policies into a small number of handbooks, and developing a register of all policies,
procedures, plans, registers and other important documents.
Better
practice
4 AgriFutures should develop a formal performance assessment and review process for
all employees.
Better
practice
5 AgriFutures should consider developing short summaries of its key documents
(strategic plan, annual operating plan and annual report (see also Recommendation
15)).
Better
practice
6 AgriFutures should separately publish annual financial statements for each of its levied
industries, showing at least the most recent year’s financial performance and the
budgeted revenue and expenditure for the current year.
Better
practice
7 AgriFutures should develop an R&I progress report, aligned with the evaluation
framework, that can be used by the Board and senior management to enhance
oversight of RD&E activities.
Better
practice
8 AgriFutures should develop and publish a more comprehensive evaluation framework
that allows for greater clarity for its activities across the four arenas. This would include
reviewing the KPIs and targets for each of the priorities in arenas 1 to 4.
Important
9 AgriFutures should ensure it meets formally with NFF and ACMF every six months and
that it engages more actively with both organisations in planning and reporting.
Important
10 AgriFutures should continue to improve its engagement and communication with levy-
paying (and emerging industry) stakeholders to ensure that relationships are
constructive and industry input to RD&E investment priorities is effective.
Better
practice
11 AgriFutures should develop and communicate a narrative that defines the value
proposition of enhanced cross-linkage between the four arenas for all stakeholders.
Better
practice
AgriFutures Australia| Independent performance review: final report
11 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
RECOMMENDATION PRIORITY
12 AgriFutures should review the terms of reference and process of induction of panel
chairs and other members to ensure that panels provide effective and efficient advice
on industry investment priorities.
Better
practice
13 AgriFutures should consider conducting ex post impact assessments or ex ante
benefit-cost analyses of some projects funded within arena 1 (People and Leadership)
and in arena 2 (National Challenges and Opportunities).
Better
Practice
14 AgriFutures should continue to conduct ex post impact assessments of its RD&E
investments in each of the industries it supports at the end of the five-year plans for
each industry. This includes in particular the impact assessment for the 2014-19
Chicken Meat RD&E plan scheduled in the last quarter of 2018 and first quarter of
2019 and an impact assessment for the 2014/15-2018/19 Honey Bee and Pollination
plan which should be conducted in 2019.
Better
practice
15 The focus for AgriFutures should be on communicating the results of the ex post
impact assessments to stakeholders using clear, simple language. AgriFutures should
consider preparing and publicly releasing a short performance evaluation report each
year, which would include results against its key performance indicators as well as the
results from any impact assessment conducted in that year.
Better
practice
AgriFutures Australia| Independent performance review: final report
12 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
ACRONYMS AND ABBREVIATIONS
AICD Australian Institute of Company Directors
ABARES Australian Bureau of Agricultural and Resource Economics and Sciences
ACMF Australian Chicken Meat Federation
ANAO Australian National Audit Office
AOP Annual operational plan
BCA Benefit-cost analysis
BCR Benefit-cost ratio
CRDC Cotton Research and Development Corporation
CRRDC Council of Rural Research and Development Corporations
CSU Charles Sturt University
DAWR Department of Agriculture and Water Resources (C’th)
FRP Full research proposal
GM General Manager
GVP Gross value of production
IP Intellectual property
IRB Industry representative body
IRR Internal rate of return
KPI Key performance indicator
MD Managing Director
M&E Monitoring & evaluation
MIRR Modified internal rate of return
AgriFutures Australia| Independent performance review: final report
13 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
NFF National Farmers’ Federation
NPV Net present value
NRI National Rural Issues (program)
PGPA Act Public Governance, Performance and Accountability Act 2013
PIRD Act Primary Industries Research and Development Act 1989
PRP Preliminary research proposal
RIRDC Rural Industries Research and Development Corporation
R&D(&E) Research & development (& extension)
R&I Research & Innovation (team)
RDC Research & Development Corporation
RR&D4P Rural R&D for Profit (program)
RWA Rural Women’s Award
WHS Workplace health and safety
AgriFutures Australia| Independent performance review: final report
14 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
1. INTRODUCTION
1.1 PURPOSE OF THE REVIEW
Clause 12 of the Funding Agreement 2015-19 between the Commonwealth Government and the Rural
Industries and Development Corporation (RIRDC, trading as AgriFutures Australia2) requires AgriFutures to
engage an independent organisation to complete a comprehensive review of its performance six months prior
to the end of the agreement, namely by 4 December 2018.
The terms of reference of the performance review were to:
1. Assess the performance of AgriFutures Australia in meeting its obligations under the [Primary
Industries Research and Development] PIRD Act and the Funding Agreement with the
Commonwealth.
2. Assess AgriFutures Australia’s development and implementation of its Strategic R&D Plan, Annual
Operational Plan, Risk Management Plan, Fraud Control Plan and Intellectual Property Management
Plan, and AgriFutures Australia’s effectiveness in meeting the priorities, targets and budgets set out
in those plans.
3. Assess the efficiency and effectiveness with which AgriFutures Australia has carried out these plans
including:
Liaison with stakeholders
Cross-RDC collaboration
Corporate governance
Industry strategy and delivery, including the opportunity for stakeholders to influence the
investment of funds and the Return on Investment achieved
Corporate operations.
4. Assess the efficiency and effectiveness of AgriFutures Australia’s investments.
5. Assess the delivery of benefits to AgriFutures Australia’s stakeholders and community in general,
foreshadowed by those plans, including an assessment of the degree to which AgriFutures Australia's
investments have met the needs of stakeholders.
6. Assess the relocation of AgriFutures Australia to Wagga Wagga, to determine what aspects of the
process went well and what lessons can be learned.
The performance review focuses on the timeframe of 4 June 2015 to 30 June 2019.
2 Referred to simply as ‘AgriFutures’ in subsequent sections of this report
AgriFutures Australia| Independent performance review: final report
15 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
1.2 REVIEW METHODOLOGY
The following approach to the review was adopted. Note that the desktop review, consultation and reporting
stages occurred concurrently.
1. Inception meeting: an inception meeting was held by videoconference, involving the Managing Director
(MD) and the General Managers (GMs) of AgriFutures and the consulting team shortly after the project
start. The meeting addressed the scope of the project, input requirements of AgriFutures (including
access to documentation, personnel, stakeholders to be interviewed), output and reporting requirements
and finalisation of timeframes.
2. Establishment of communication channels: a simple dedicated website for the review was established
with the address www.agrifuturesreview.org. The site comprised a single page explaining the background
to the review and detailing the terms of reference. The site also provided an email address
([email protected]) by which any stakeholders could provide a submission to the
review or seek further information. The purpose of the site was to provide a transparent communication
channel with stakeholders that was clearly independent of AgriFutures.
The website and the review itself were publicised by AgriFutures with an accompanying letter from the
MD by e-news bulletin to all AgriFutures contacts in its customer relationship management database. The
review and participation in it were also promoted by a range of social media outlets. By the closing date,
only one submission had been made to the web site.
3. Desktop review: a large number of relevant documents were made available to the consultants via a
secure portal and were progressively reviewed. During the document review, AgriFutures’ fulfilment of its
various obligations under the Funding Agreement, the Primary Industries Research and Development Act
1989 (PIRD Act) and Public Governance, Performance and Accountability Act 2013 (PGPA Act) were
checked and points of interest were noted for discussion during the consultation stage.
A list of the documents reviewed is provided in Appendix 1.
4. Consultation: a list of interviewees for the review, across a range of stakeholder groups, was drawn up in
consultation with the AgriFutures leadership team. Individuals on the list were approached and, if
agreeable, were interviewed. Interviews took place via teleconference for the majority of the Board
members, levy and emerging industries, participants in the ‘People and leadership’ arena and other
stakeholders. The majority of the AgriFutures staff and the Chair, and Department of Agriculture and
Water Resources (DAWR) personnel were interviewed face to face. A semi-structured questionnaire was
used as the basis for all discussions, however questions varied between Board, management and
industry interviewees. All interviewees were assured that their comments would be treated in confidence
and, if reported, would be presented in a deidentified and aggregated way that did not allow the source
to be identified.
A total of 64 interviews were conducted, distributed across stakeholder groups as follows:
AgriFutures executive team and management (8 individuals);
AgriFutures Board (6 + 1 former RIRDC board member);
National Farmers’ Federation (NFF) (2) and Australian Chicken Meat Federation (ACMF) (2);
AgriFutures panel chairs or members (7);
AgriFutures Australia| Independent performance review: final report
16 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Levied industries (14);
Emerging industries (5);
People and leadership participants or sponsors (5);
DAWR (2);
Council of Rural Research and Development Corporations (CRRDC) (1); and
Service providers to AgriFutures (research agencies, consultants and others; 11).
In addition, one of the team attended the annual AgriFutures Rural Women’s Award Gala Dinner on 15
October 2018, providing first-hand experience of an AgriFutures event, as well as the opportunity for
further, less formal, discussions with stakeholders.
An online survey (SurveyMonkey®) was also developed, comprising 14 questions that sought responses
on perceptions of R&D planning, effectiveness, efficiencies, communications, engagement and extension
of AgriFutures. This survey was only made available to stakeholders participating in arenas 3 and 4 of
AgriFutures’ activities (RD&E for levied and emerging industries). Whilst the number of responses (39)
was low and could not provide statistically meaningful data, there were common themes across the
outcomes from this survey with the interviews undertaken during the review.
5. Presentation of interim findings: the interim findings of the review were presented to the AgriFutures
leadership team by videoconference, in order to test the findings for accuracy and completeness. Interim
findings were also discussed in a face-to-face meeting with the AgriFutures Board at its meeting of 15
October 2018 in Canberra.
6. Report: a draft report was submitted for review to the AgriFutures Board and management. Feedback on
the draft was considered by the review team and changes made where required to correct factual errors
or misinterpretations. The final report was then submitted.
AgriFutures Australia| Independent performance review: final report
17 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
2. OVERVIEW OF AGRIFUTURES AUSTRALIA
2.1 LEGAL FRAMEWORK
AgriFutures is a statutory, as distinct from an industry-owned, (rural) research & development corporation
((R)RDC). It is a corporate Commonwealth entity under the Public Governance, Performance and
Accountability Act 2013 (PGPA Act) and the Primary Industries Research and Development Act 1989 (PIRD
Act) and is an agency in the Agriculture and Water Resources portfolio. As such, AgriFutures must meet the
finance and administration arrangements as detailed in the PGPA Act and associated instruments such as
various Rules, as well as other Federal Government requirements.
In 2013, the PIRD Act was amended to permit the Minister to enter into formal funding agreements with
statutory RDCs. These funding agreements were until that time restricted to the industry-owned RDCs.
AgriFutures entered into its first such agreement, the Funding Agreement 2015-19, in 2015. The Funding
Agreement supports the compliance framework of the PIRD and PGPA Acts and introduces a small number
of additional obligations, including the requirement to conduct an independent performance review during the
term of each four-year Funding Agreement.
Thirteen industry levies are attached to AgriFutures and these are governed by the Primary Industries (Excise)
Levies Act 1999 and the Primary Industries Levies and Charges Collection Act 1991.
2.2 SCOPE OF ACTIVITIES
2.2.1 OVERVIEW
The vision of AgriFutures is to grow the long-term prosperity of Australian rural industries. The organisation’s
purpose is to invest in research and development that is adopted and assists rural industries to be productive,
profitable and sustainable.
The role of AgriFutures is quite unique among RDCs. The preamble of the Funding Agreement perhaps best
illustrates this:
The agreement also reflects RIRDC's unique role among the RDCs as the RDC responsible for
supporting small industry, multi industry, cross-sectoral and national interest R&D for rural industries.
To help achieve these objectives RIRDC receives appropriation funding to facilitate investment that
supports analysis of issues of importance to rural industries and investment that delivers benefits to
these industries and the Australian community.
To achieve this the organisation identifies four distinct areas of focus or ‘arenas’. They are:
1. People and Leadership;
2. National Challenges and Opportunities;
3. Growing Profitability; and
4. Supporting New and Emerging Rural Industries.
A brief background of the four arenas is provided below.
AgriFutures Australia| Independent performance review: final report
18 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
2.2.2 PEOPLE AND LEADERSHIP
AgriFutures has two key priorities within the People and Leadership program. They are:
1. Attracting capable people into careers in agriculture; and
2. Building the capability of future rural leaders.
For many years, careers in agriculture were not high on the priority list for young people leaving school or
tertiary studies. Indeed, a decade or so ago, many universities offering agricultural science courses were very
alarmed at dwindling enrolments. This situation has altered substantially in recent years.
Currently, the supply of people into agricultural careers is not keeping up with the demand created by an ageing
workforce and a highly attractive, technologically-focussed and (generally) profitable industry. In fact, many
categories of agricultural occupations are undersupplied, and action is required to help assure the future of the
sector. Additionally, with the explosion of new technologies emerging from digital disruption, agriculture also
needs more highly skilled people with a diverse range of academic, technical and practical backgrounds.
Introducing agricultural careers pathways in schools is critical and agriculture need to be promoted as a
successful career path, and not just for students from a family farming background.
AgriFutures collaborates with other RDCs, government departments, the private sector and not-for-profit
organisations to highlight to young people the opportunities offered by a career in agriculture, through initiatives
such as the Horizon Scholarships, startup.business and Country to Canberra.
AgriFutures also has a range of programs focussed on developing the leadership and human capacity of rural
industries and their communities. The Rural Women’s Award (RWA) is acknowledged as a key part of the
leadership landscape in agriculture. The program, with assistance from state selection committees and with
support from the state departments of agriculture, selects seven finalists from which a national winner and
runner-up is announced at an annual gala dinner. Whilst the bursary awarded to each state and territory winner
is significant ($10,000), finalists in 2018 indicated that the program had delivered far more through exposure
to networks and the opportunity to promote their initiatives. An alumni program for past participants was also
launched in in 2018.
The Ignite Network is another leadership initiative. Launched in 2018, it provides a facility to connect young
leaders in agriculture and offer them training and activities that foster collaboration and innovation.
2.2.3 NATIONAL CHALLENGES AND OPPORTUNITIES
As noted in section 2.2.1, AgriFutures is quite unique among the RDCs in that it has a mandate to undertake
cross-sectoral and national-interest R&D for rural industries, especially R&D that addresses challenges and
opportunities that are common across rural industries.
An important role played by AgriFutures in Australian agriculture is to identify, inform, evaluate and provide
credible information and policy on issues of national significance. A ‘plan on a page’ for this program is shown
in Figure 1. A key objective of this program is to enable consultation and debate with the agricultural community
AgriFutures Australia| Independent performance review: final report
19 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
on national issues that either facilitate or inhibit the achievement of a goal of $100 billion value3 by 2030 for
the Australian agricultural sector.
Figure 1: AgriFutures logic framework for the National Challenges and Opportunities arena
3 NFF 2018, Talking 2030: Growing agriculture into a $100 billion industry, March
AgriFutures Australia| Independent performance review: final report
20 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
One of AgriFutures’ highest profile projects, evokeAG, was launched in 2018. evokeAG will be an international
event, to be held in Melbourne on 19-20 February 2019, that will develop the Australian agricultural technology
(‘ag-tech’) ecosystem. The goal for AgriFutures is to create an annual event that exposes Australian ag-tech
and food-tech in a manner that will inspire, generate growth and opportunity and connect technology to
producers, businesses, researchers, consumers and investors.
2.2.4 GROWING PROFITABILITY (FOR LEVIED INDUSTRIES)
The area of largest focus and greatest expenditure for AgriFutures is its support for rural industries with an
R&D levy but with no industry-specific RDC. These industries are:
Rice;
Chicken meat;
Export fodder;
Honey bee and pollination;
Thoroughbred horses;
Ginger;
Tea tree oil;
Pasture seeds; and
Smaller levied industries:
Goat fibre;
Buffalo;
Kangaroo;
Deer; and
Ratite.
Priorities established by AgriFutures within its 5-year plan are:
Engaging industry participants in determining RD&E priorities;
Investing in innovation that assists levied industries to be more profitable; and
Delivering outcomes to maximise industry uptake and adoption.
2.2.5 SUPPORTING NEW AND EMERGING RURAL INDUSTRIES
The final priority area of focus (arena) relates to AgriFutures’ identifying and supporting the development of
new rural industries that can meet changing demand and make an economic contribution to rural Australia and
the economy. AgriFutures seeks to identify new industries with high potential and to put in place R&D activities
that assist these industries to develop.
AgriFutures Australia| Independent performance review: final report
21 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
As noted in the AgriFutures 5-year RD&E plan: ‘AgriFutures Australia will build partnerships with key
stakeholders, including partners in the private sector, to support the development of these high-potential
emerging rural industries’.
The industries on which AgriFutures has focused over the planning period include (but not exclusively) alpaca,
crocodile, duck, game bird, marron, redclaw, mulloway, rabbit, essential oils and plant extracts, native foods,
wildflowers and native plants and truffles.
2.3 FUNDING
AgriFutures is funded from a range of sources:
Federal government appropriation (annual);
Levy funds from levied industries;
Voluntary contributions from levied and non-levied industries;
Matching Commonwealth government contributions; and
Co-investment from the Commonwealth government, other RDCs, state and territory governments, R&D
providers and private companies in collaborative projects such as those of the Rural R&D for Profit
(RR&D4P) program.
A summary of AgriFutures’ forecast income and expenditure, as listed within its R&D Strategic Plan 2017-
2022, is provided in Table 1.
Table 1: Forecast income and expenditure 2017-18 to 2021-22
YEAR 2017/18 ($M) 2018/19 ($M) 2019/20 ($M) 2020/21 ($M) 2021/22 ($M)
Forecast income
Commonwealth appropriation 9.3 9.4 9.2 9.4 9.6
Commonwealth matching 5.8 5.5 5.3 5.3 5.5
Levies 5.5 5.2 5.2 5.3 5.3
External Contribution 4.0 3.7 4.1 1.3 1.4
Interest 0.6 0.6 0.6 0.6 0.6
Other Income 1.8 1.8 1.7 0.4 0.5
TOTAL INCOME 27.0 26.2 26.1 22.3 22.9
Forecast expenses
Arena 1 1.3 1.1 1.1 1.1 1.1
Arena 2 7.9 6.9 6.8 3.6 4.0
Arena 3 14.5 14.4 13.6 12.4 14.0
AgriFutures Australia| Independent performance review: final report
22 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
YEAR 2017/18 ($M) 2018/19 ($M) 2019/20 ($M) 2020/21 ($M) 2021/22 ($M)
Arena 4 3.0 2.5 2.0 2.0 2.0
Corporate 3.3 3.1 3.1 3.6 3.1
TOTAL EXPENSES 30.0 28.0 26.6 22.7 24.2
NET POSITION -3.0 -1.8 -0.5 -0.4 -1.3
Source: R&D Strategic Plan 2017-2022
One of the key points of difference for AgriFutures in comparison with other RDCs is that government
appropriation funds are used to fund activities in arenas 1, 2 and 4. The strategic plan indicates that over the
period from 2017-2022, this contribution will represent approximately 34 per cent of the total income or $46.9
million. Levy revenue from the levied industries is forecast to be very stable, averaging around $5.2-5.3 million
per annum, although expenditure within the industries varies significantly year-on-year (see below). Beyond
2019/20 there is a significant decline in projected external contributions and other income which will effectively
reduce the budget of AgriFutures by approximately $3.8 million or 15 per cent, with most of that decline in
arena 2 where the majority of nationally-focussed R&D is conducted, as a result of completion of collaborative
projects.
Expenditure in arena 3, ‘Growing Profitability’ for the levied industries is and will continue to be the most
significant activity for AgriFutures and represents approximately 53 per cent of the forecast total expenditure
from 2017-2022. Expenditure in arena 2, ‘National Challenges and Opportunities’, will be approximately 23 per
cent of the total forecast expenditure, 9 per cent will be spent in ‘Emerging Industries’ (arena 4) and 4 per cent
in ‘People and Leadership’ (arena 1). Corporate costs and activities are forecast to be approximately 11 per
cent of total expenditure and this level is largely consistent with other RDCs.
Table 2 provides a summary of actual income and expenditure over the course of the review period (forecast
for 2018/19). While deficits are forecast in all years as listed in the strategic plan (Table 1), the reality as shown
in 2015/16 and 2017/18 (Table 2) is that some years may have a surplus due to the funding cycle for projects.
Table 2: Key financial figures for AgriFutures, 2015/16 to 2018/19
YEAR 2015/16 ($M) 2016/17 ($M) 2017/18 ($M) 2018/19 ($M)*
Revenue 28.0 23.2 29.1 26.5
Expenditure 21.4 26.4 28.2 30.1
Surplus/deficit 6.6 -3.2 0.9 -3.6
Source: Annual Reports 2015/16, 2016/17, 2017/18, Annual Operational Plan 2018-19 and AgriFutures
* Estimated in 2018/19
AgriFutures Australia| Independent performance review: final report
23 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Within arena 3, although income and expenditure are forecast in the strategic plan to be relatively constant,
expenditure by individual industries varies significantly between years (Figure 2). The rice and chicken meat
industries are the dominant industries in expenditure terms with honey bees and export fodder also being
prominent.
Figure 2: Expenditure in arena 3 (Levied industries) from 2015/16 to 2017/18
The other arena in which expenditure is significant is arena 2, ‘National Challenges and Opportunities’. This
arena receives government appropriations, and AgriFutures has also been highly successful in obtaining funds
for large-scale projects, particularly those under the RR&D4P program. As shown in Figure 3, these programs
contribute significant additional funding to AgriFutures.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
$ '0
00
2015-16 2016-17 2017-18
AgriFutures Australia| Independent performance review: final report
24 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Figure 3: Expenditure in arena 2 (National Challenges and Opportunities) including external funding (e.g.
RR&D4P programs) 2015/16 to 2018/19
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$'000
2015/16 2016/17 2017/18 2018/19*
AgriFutures Australia| Independent performance review: final report
25 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
3. THE BOARD AND GOVERNANCE
3.1 STRUCTURE OF THE BOARD
Under the PIRD Act, the Board comprises:
A Chair, appointed by the Minister for a term of up to three years with eligibility for reappointment;
A Deputy Chair, appointed by the Minister from among the nominated directors;
A Managing Director, appointed by the Board, with no fixed term except as set by contract; and
Between five and seven other directors appointed by the Minister for terms of up to three years.
Directors are nominated by a Selection Committee, which is overseen by a Presiding Member appointed by
the Minister. The Presiding Member nominates, and the Minister appoints, up to four additional members of
the Committee.
The Selection Committee must nominate people having one or more of the skills listed in section 131 of the
PIRD Act. It must also consult the Chair on the appropriate balance of expertise and experience for the Board,
and AgriFutures may nominate additional skills for inclusion in the selection process.
There are currently six non-executive directors in addition to the Chair, including the Deputy Chair. The current
Board members were appointed in October 2017 (the Chair in August 2016). Of the current board, four were
new appointments while three carried over from the previous board.
Table 3 shows the membership of the AgriFutures Board. As noted above, the Chair was appointed in August
2016 following the appointment of the MD and these appointments facilitated the change from RIRDC to
AgriFutures. Of the six non-executive directors, two continued on from the RIRDC Board and there were four
new appointments in October 2017. As a result, this board had effectively been in place for 12 months at the
time of the review.
Table 3: AgriFutures’ current Board composition
BOARD MEMBER APPOINTMENT DATE END DATE POSITION
Mrs Kay Hull AM 02/08/16 01/08/19 Chair
Mr Ian Henderson 01/10/17 30/09/20 Deputy Chair
Mr John Harvey 03/05/16 - Managing Director
Dr William Ryan 16/10/14 30/09/20 Chair, Audit Committee
Dr Tony Hamilton 16/10/14 30/09/20
Dr Kate Andrews 01/10/17 30/09/20
AgriFutures Australia| Independent performance review: final report
26 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
BOARD MEMBER APPOINTMENT DATE END DATE POSITION
Dr Katrina Fairley-Grenot 01/10/17 30/09/20 Member, Audit Committee
Mr Richard Clark 1/10/17 30/09/20 Member, Audit Committee
The current AgriFutures Board is acknowledged by stakeholders to be highly skilled and appropriate for the
role. Special mention was often made of the Chair, who has extensive networks and exceptional negotiation
skills, and has brought a more corporate, outward-facing and agile dynamic to AgriFutures. It appears that all
the skills listed in the PIRD Act are well covered by the mix of directors. It was noted that the Board has a very
good balance of governance, strategic and thought leadership and RD&E management skills.
Board governance is considered to be very good. The Board Governance Manual provides clear and concise
guidelines for the functions, roles and responsibilities of directors and references the relevant governing
documents (acts, Funding Agreement and so on) and corporate policies. This manual was reviewed and
accepted by the Board in March 2018 and is scheduled for review annually.
Stakeholders generally indicated that the transition from RIRDC to AgriFutures was very well managed by the
Board and management and that the current board reflects the intent of AgriFutures to be a leader in ag-tech,
prosecute the national issues agenda, generate effective leadership programs and manage RD&E for levied
and emerging industries.
3.2 COMMITTEES
There is only one board committee. The Audit Committee was established in compliance with section 45 of
the PGPA Act and section 17 of the PGPA Rules, ‘Audit committee for Commonwealth entities’. The Audit
Committee’s primary role is to ensure AgriFutures’ financial reporting is a true and fair reflection of its financial
transactions. The committee also provides a forum for communication between the directors, the senior
financial managers of AgriFutures and the internal and external auditors. It carries responsibility for identifying
areas of significant business risk and stipulating the means of managing any such risk.
The Audit Committee comprises three directors, with the committee chair being a non-executive director. The
MD and GM Business & Finance attend as observers. The committee meets four times per year approximately
two weeks prior to each Board meeting. There are standing items of risk management, fraud control, financial
governance, workplace health and safety (WHS), the intellectual property (IP) register and conflict of interest.
The committee regularly reviews policies and compliance and has a separate process for reviewing
compliance to the Funding Agreement. Internal audit is a key topic at one of the committee meetings.
The structure, roles and responsibilities of the Audit Committee are detailed in several policies, the primary
document being the Audit Committee Charter 2017-18 that was ratified by the board in March 2018 and is
scheduled for review annually. This document is comprehensive and well structured. The current Audit
Committee reportedly works very constructively and there is a strong sense within the Board that risk and
compliance are handled effectively and efficiently. In addition, there are several Board members with extensive
experience in governance and compliance and there is a strong appreciation of the responsibilities and
requirements of being a government entity.
AgriFutures Australia| Independent performance review: final report
27 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Director membership of the Audit Committee is periodically rotated, reportedly to refresh the committee and to
increase the experience of Board members. Rotation of audit committee members is not common among
RDCs but is noted as good governance, providing fresh perspectives and enhancing the perception of audit
committee independence4.
It is notable that the Board does not have a committee to advise on people-related matters (human resources,
remuneration, culture and so on), which many boards do (for example, Cotton Research & Development
Corporation and Wine Australia). This is further discussed in section 3.3.
3.3 BOARD PRACTICE
The Board has four face-to-face meetings per year and there will typically be one or two teleconferences as
well. Each face-to-face meeting lasts for two days and usually involves a field trip and/or stakeholder meeting
or event. When meetings are held in Wagga Wagga there is an opportunity for the Board to meet with staff
and this is seen as a very important internal engagement mechanism.
The dynamics of the current AgriFutures board is reportedly very different to that of the previous RIRDC
boards. The current board is very focussed on the positioning of AgriFutures as a future-oriented and agile
RDC that has the capacity to address emerging areas in the organisation’s four arenas of work. There is a
strong commercial culture, in contrast to the more (reportedly) compliance-orientated RIRDC. Several Board
members indicated that they would like to see more time given to the big-picture strategic themes and
objectives, particularly in arena 2.
Currently, it seems that the balance of the Board’s focus is tipped towards arenas 1 and 2 at the expense of 3
and 4. This is not surprising – RD&E is rarely as exciting or interesting as the ‘big picture’ programs such as
evokeAG – and it must also be acknowledged that large events such as these warrant attention as poor delivery
would create considerable reputational risk for the organisation. However, arena 3 is by far AgriFutures’ largest
area of investment and it should receive at least half of the Board’s attention, all else being equal (see also
section 5.3).
The environment exists in meetings for robust, comprehensive and respectful discussions. Decision-making is
reported to be by consensus and there is a strong sense and culture of adherence to board decisions and
confidentiality. Conflict of interests appear to be handled appropriately. A declaration by directors of any update
of conflicts of interest is a standing agenda item at the beginning of each Board meeting. Importantly we note
that the Board completes a review of every board meeting to ensure that meetings are conducted effectively
and with the appropriate level of engagement from each Board member.
The relationship between the Board and management is reportedly positive and constructive. The relationship
between the Chair and the MD is seen both internally and externally as very strong, collaborative and mutually
supportive. This is a pivotal relationship in the organisation and ensures that there is very strong engagement
4 Auditing and Assurance Standards Board 2017, Audit committees: A guide to good practice. A joint publication from the
Auditing and Assurance Standards Board, Australian Institute of Company Directors and The Institute of Internal Auditors-
Australia
AgriFutures Australia| Independent performance review: final report
28 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
and alignment between Board and management. The current Board was described by both staff and Board
members as more engaged and directive of management than previous boards, and this was identified as a
positive ‘tension’ by both groups.
This review understands that there has been no formal performance review of the current Board, reportedly
because of director rotation in 2017, although we understand the Board is planning a review in early 2019. The
Australian Institute of Company Directors (AICD) notes that it is usual practice for Boards to run an evaluation
every year, and that every three to four years the process should be externally facilitated5. Whilst this
represents best practice, the challenge of reviewing a board that may be substantially rotated every three years
is acknowledged.
We suggest that AgriFutures consider conducting board evaluations twice over a three-year period. The first
might be at around the 18-month point and be conducted internally. The second review would be conducted
twelve months later and either be internal or (preferably) externally facilitated, providing an independent
perspective. These reviews should incorporate evaluation of the Board and Audit Committee and their
respective chairs. The third-year review could be provided to the Presiding Member as background information
prior to the next board selection round.
Recommendation: The AgriFutures Board should consider a schedule of two board performance reviews
over each appointment period, including the possibility of an external review in year three. These reviews
should include evaluation of the Board and Audit Committee and their respective chairs.
We also understand that there is a process in place to evaluate the performance of the MD on an annual basis.
The review process involves the MD providing a written submission describing progress against the priorities
and performance targets set for the MD by the Board. This submission is considered by the Board in an in-
camera session without the MD, after which the Chair provides direct feedback to the MD. Every Board meeting
includes an in-camera session to permit ongoing performance review of the MD.
As noted in section 3.2, the AgriFutures Board does not have a committee to deal with people-related matters.
The Board should consider whether such a committee – perhaps ‘People & Culture’ – might be warranted. In
addition to overseeing the annual review of the MD, a People & Culture Committee might also be involved in
developing a succession plan for the MD position. Best practice governance and risk management would
suggest that the Board should develop such a plan, especially given that AgriFutures faces some particular
circumstances in relation to identifying a successor to the current MD, notably the unique and evolving nature
of AgriFutures’ role, the regional location of the company and the fact that the executive team has only been
in place for a short time. A succession plan need not be highly detailed but should identify the key principles
agreed by the Board on the management of the succession process.
5 Board evaluation and director appraisal – Board performance, AICD Director Tool, 2016
AgriFutures Australia| Independent performance review: final report
29 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
A People & Culture Committee could also assist the Board in the important role of shaping the culture of the
organisation.
Recommendation: The AgriFutures Board should consider establishing a committee of the Board to advise it
on people-related matters, possibly including succession planning, internal or external performance reviews
and shaping AgriFutures’ corporate culture.
3.4 GOVERNANCE DOCUMENTATION
As indicated above, a robust Board Governance Manual and Audit Committee Charter are in place. Policies
are also in place for fraud control, intellectual property (IP) and commercialisation, workplace health and safety
(WHS) and conflict of interest. There is also a large number (over 75) of other policies and procedures. The
Audit Committee has a clear timetable and active mandate for reviewing and modifying, as necessary, all
policies.
AgriFutures’ procurement and contracting functions were recently reviewed by an independent consultant6
(see also section 8). The review found that the relocation of RIRDC / AgriFutures from Canberra to Wagga
Wagga had ‘interrupted the ongoing maintenance of key policies and procedures’, creating a backlog of
documents requiring updating.
Board members and staff made comment to the review that it can be difficult to keep on top of and locate the
appropriate policies at times and that some simplification would improve compliance. The approach taken by
the Cotton Research & Development Corporation (CRDC), which we believe has merit, is to compile the
various policies, procedures and related documents into a small number of handbooks or compendia covering,
for example, finance and administration policy, human resource management policy and so on. These
handbooks should include a register of all relevant documents and the review timetable for those documents.
Recommendation: AgriFutures should consider simplifying its governance documentation by compiling its
policies into a small number of handbooks, and developing a register of all policies, procedures, plans, registers
and other important documents.
6 V. Burkinshaw 2018, AgriFutures Australia: Procurement and contracting review, September
AgriFutures Australia| Independent performance review: final report
30 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
3.5 RISK MANAGEMENT AND COMPLIANCE
The Board has a duty under section 16 of the PGPA Act to ‘establish and maintain’ an appropriate system of
risk oversight and management for the entity.
Compliance is clearly well embedded and takes high priority within AgriFutures. The GM Business & Finance
maintains a compliance checklist identifying the appropriate individual obligations under the Funding
Agreement, PIRD Act, PGPA Act and PGPA Rules, and for each obligation identifying when it is to be reported
upon, internal controls, sources of evidence of compliance and the individual or group responsible for ensuring
fulfilment of the obligation. Given the structure of this document, it may be appropriate that this checklist is
included as a demonstration of compliance to the legislative requirements that are listed as an appendix in the
annual report.
The annual reports provide evidence of AgriFutures’ compliance with its various obligations. The numerous
requirements in relation to the content of the annual report are listed in detail in an appendix to each annual
report, and an index allows information addressing each of these to be readily located. Many of these
requirements pertain to evidence of compliance with broader obligations. This review found no evidence of
non-compliance (see Appendices 2 and 3).
The Board and senior management appear to place high priority on risk management. There is a risk register
and a risk assessment plan. The Audit Committee receives and reviews a risk management report, covering
the top risk items in the register, at each meeting. The Audit Committee then provides an updated register and
report for approval by the Board.
Management of the risks associated with commercialisation of IP is overseen by the Audit Committee. A report
on managed IP is tabled at the Audit Committee meeting for review and recommendation for approval by the
Board. The managed IP report is detailed and comprehensive.
3.6 MANAGEMENT TEAM
The AgriFutures team is relatively small (23 staff as at October 2018) The leadership team comprises the MD
and three General Managers (Communications & Capacity Building, Research & Innovation and Business &
Finance).
The scope and focus of activities that AgriFutures now undertakes or manages in comparison to RIRDC has
changed markedly over the last two years.
There can be no doubt that the significant changes in board, staff, scope and geographical location of
AgriFutures has provided some unique and difficult challenges for the organisation over the last two years.
These are noted throughout this report. Despite these challenges, AgriFutures was able to maintain effective
company operations over the period.
The workload of the organisation has also reportedly increased, especially in the most recent 12 months. There
has been a significant shift in staffing numbers towards the communications and capacity teams in direct
response to the more extensive communication activities in arenas one and two. The internalisation of
management of the key ‘People and leadership’ programs and the move towards leadership in the ag-tech
ecosystem, particularly through evokeAG, are and will continue to be very resource-demanding. AgriFutures
has also taken on the management of a number of RR&D4P projects on behalf of multiple investors.
AgriFutures Australia| Independent performance review: final report
31 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
The challenge for AgriFutures in managing its staff resources is that its headcount is limited by the
organisation’s status as a government agency. A freeze on public service numbers imposed in 2014 means
that AgriFutures cannot appoint additional permanent staff without an offsetting reduction in headcount within
AgriFutures or among DAWR or its other agencies. This is a very difficult situation for the MD to manage, and
the inability to control or increase the size of the workforce contributes to tensions developing between the
arenas for appropriate staffing levels. It appears that resourcing of the Research & Innovation (R&I) team was
insufficient in the early stages of AgriFutures. Both the board and MD are aware of this issue and appear to
be very focussed on ensuring that the core activities in arenas 3 and 4 are now appropriately resourced. In
this regard, we are aware that over the course of this review, considerable organisational structural change
has been agreed by the Board and senior management and is currently being implemented. This includes
(most recently) the appointment of a further senior R&I manager.
The relocation of the AgriFutures office to Charles Sturt University (CSU) in Wagga Wagga, NSW, has brought
advantages and disadvantages, which are discussed in further detail in section 8. The Wagga Wagga location
has allowed AgriFutures staff the opportunity to reside and be part of a regionally- and agriculturally-orientated
community. AgriFutures is now closely co-located with important levy payers in industries such as rice, pasture
seeds and export fodder, and with key research providers such as the NSW Department of Primary Industries
and CSU.
One negative aspect is that airport access and flight availability are poorer than in capital cities and particularly
in contrast to the RIRDC location in Canberra. The review heard that, for this reason, levy payers and industry
representatives were unlikely to visit AgriFutures unless there was a compelling reason to do so. Both NFF
and ACMF indicated that the Wagga Wagga location may have reduced their contact with AgriFutures. On the
other hand, it seems that the recruitment of staff has not been limited by the regional location. The AgriFutures
Board indicated that staff of highly quality and with strong qualifications had been employed.
A notable source of staff unease, expressed to this review, was a lack of well-structured staff position
descriptions and definition of staff performance indicators. Several staff commented on the need for more
active engagement by senior management in staff performance review and that 360-degree reviews have not
been conducted. Staff believed that formal targets and stretch targets could be implemented to improve
accountability and to provide a more transparent platform for evaluation. Several staff also indicated that the
relatively flat structure of the organisation provides limited opportunities for formal progression and that other
forms of recognition and promotion should be considered to ensure that staff turnover is minimised.
AgriFutures should consider the implementation of a transparent, formal performance assessment and review
procedure and that this is used both to inform staff performance and to ensure that position descriptions and
workloads are reviewed effectively.
Recommendation: AgriFutures should develop and implement a formal performance assessment and review
process for all employees.
AgriFutures Australia| Independent performance review: final report
32 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
3.7 CORPORATE PERSONALITY AND CULTURE
In 2017, AgriFutures commenced a significant transition that included a change in physical location, a change
in the board and the majority of management and staff and most importantly a significant shift in direction,
identity and persona. Whilst these changes have been managed well, the most notable effect has been on the
personality and culture of AgriFutures, which are still evolving. There is a strong internal and external belief
that AgriFutures has shifted from operating as a traditional RDC focussed on management and allocation of
RD&E resources to now representing a much more outward-facing, commercially-driven entity.
As a result, there appear to be two distinct cultures within AgriFutures. The communications team is more
direct, extroverted and forthright in both style and interactions with external stakeholders, whilst the R&I team
appears to be more conservative and takes more time to reach decisions and take actions. However, this latter
observation was confounded by the initial mismatch of resourcing between the two areas as described in
section 3.6. The Board and the MD are aware of this difference and are working on mechanisms to ensure
greater levels of interaction and integration between the teams.
Most staff reported a high level of satisfaction working at AgriFutures, although the workload has increased
significantly compared to that of RIRDC (see section 3.6). The changing culture and workload have created
some differences in stakeholders’ views concerning approachability and responsiveness of staff. Some
significant stakeholders believe that AgriFutures places too much emphasis on innovation and
entrepreneurship at the expense of managing the core business of RD&E. It is very clear that the levied
industries, in particular, still require significant engagement and relationship development and that will take
time to implement and achieve.
We note that in recent months there has been a significant restructure in, and the allocation of more resources
to, the R&I team. These changes should assist in ensuring that AgriFutures’ core activities and relationships
are more effectively managed.
From externally, a high proportion of stakeholders appear to believe that AgriFutures’ new identity is positive.
There is support for the shift in agility and a belief that AgriFutures is now more capable in delivering in key
areas, particularly in arenas 1 and 2. For People and Leadership participants, AgriFutures has instilled a
greater belief in the direction and future of those programs. Some of the levied and emerging industries are
less convinced, believing that the rebranding and (in some cases) relocation have been a backwards step.
Developing a compelling narrative about why AgriFutures provides greater opportunities for those industries,
and engaging with these stakeholders, should be a priority for AgriFutures management.
We note from discussions with directors, staff and stakeholders that the current corporate persona of
AgriFutures appears to be more focussed on arenas 1 and 2 than its more traditional RD&E arenas 3 and 4.
In part, this is not surprising given the considerable existing focus on evokeAG and its People and Leadership
programs. It is suggested that over time the focus of the organisation should move back to one that better
reflects the balance of investment across the arenas.
AgriFutures Australia| Independent performance review: final report
33 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
4. PLANNING AND REPORTING
4.1 OVERVIEW
The form of AgriFutures’ planning and reporting processes and mechanisms is highly prescribed by the
Funding Agreement, the PIRD Act, the PGPA Act and the PGPA Rule 20147.
There are three principal planning and reporting documents:
The five-year strategic plan (referred to as the ‘R&D Plan’ in the PIRD Act and Funding Agreement);
The annual operational plan; and
The annual report.
The understandable requirement for a high degree of public transparency in AgriFutures’ plans and reports
does, to some extent, conflict with the desirability for these documents to be accessible, readable and
understandable to the majority of stakeholders (levy payers, industry representatives, consultants, research
providers and commercial private sector partners). A number of stakeholders interviewed for this review
indicated that the size and complexity of the corporate documents resulted in very minimal engagement with
them.
Recommendation: AgriFutures should consider developing short summaries of its key documents (strategic
plan, annual operating plan and annual report – see also later recommendation).
These summaries should be easy to prepare, because there is content that could be taken directly or with only
minor modification from each of the documents to serve as a standalone summary.
4.2 STRATEGIC PLAN
There are three strategic plans are relevant to the review period:
RIRDC Corporate Plan 2012-2017;
RIRDC Research and Development Plan 2016-2021; and
AgriFutures Strategic R&D Plan 2017-2022.
In 2016, the Board and MD sought approval from government to change the strategic plan of the company
(AgriFutures) within six months after submitting the existing plan (RIRDC 2016-2021). This is a significant
7 The latter is a disallowable legislative instrument made by the Finance Minister under sections 101 to 105 of the PGPA
Act ‘prescribing matters required or permitted by the PGPA Act or necessary or convenient to be prescribed for carrying
out or giving effect to the PGPA Act’ (see https://www.finance.gov.au/resource-management/pgpa-glossary/rules/)
AgriFutures Australia| Independent performance review: final report
34 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
departure from standard practice and reflects the directional changes and priorities that AgriFutures wished to
signal to industry. The current strategic plan (2017-2022) was developed over a six-month period and is very
different in both purpose and structure to previous plans. The plan is built on global megatrends and trends in
agriculture that then lead to the identification of six key drivers of change in Australian agriculture and
characterisation of the challenges and opportunities arising from these drivers. There is a very well-structured
situational analysis provided as an appendix to the plan.
The MD led a significant consultation process, outlined in the plan, with industry stakeholders and utilised
several workshops with emerging leaders in establishing the future direction of AgriFutures. The two declared
representative organisations, NFF and ACMA, were also consulted during the development of the plan.
The 2017-2022 plan seeks to promote ‘future thinking, resilient, profitable, and competitive rural industries’
through effective R&D and a commitment to developing human capacity and leadership particularly in cross-
sectoral areas of national importance. To achieve these outcomes the plan is structured into the four distinct
arenas described in section 2.2.
The plan is well written and laid out, with excellent use of infographics, colour, images and space to assist
readability and identification of key areas of focus. As indicated, there is a very detailed and logical sequence
of components within the plan from identified trends and megatrends, key drivers, challenges and opportunities
through the arenas and outcomes and priorities within each arena. The plan establishes a framework and
strong visual platform that forms the basis for the corresponding annual operational plan and recently released
annual report. The plan complies with the requirements of the PIRD Act and Funding Agreement with respect
to content, namely descriptions of:
AgriFutures’ operating environment including its approach, megatrends and trends, drivers of change,
key opportunities and challenges and a situational analysis;
Collaboration with other RDCs;
Priorities and outcomes from stakeholder consultation;
Consultation with industry;
Key planned strategies, focuses, objectives, investment priorities and outcomes;
Intended R&D activities and priorities;
Key deliverables;
Measures of success;
Corporate governance
Alignment of R&D activities with the Guidelines8;
Communication and commercialisation of R&D;
8 The ‘Guidelines’, as referred to in the Funding Agreement, include the Rural R&D Priorities, the Strategic Research
Priorities, any other guidelines and priorities notified to AgriFutures by the Commonwealth and the ‘Levy Principles and
Guidelines’
AgriFutures Australia| Independent performance review: final report
35 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Alignment with Government R&D priorities; and
Estimates of financials including levied income and government appropriations.
One element that has limited coverage is resource allocation and portfolio balance. There is a section of the
strategic plan (and the AOP and annual report) describing ‘a balanced research portfolio’, which states that
the plan is orientated towards short- to mid-term adaptive research, however there appears to be no formal
analysis of the dimensions on which the portfolio will be balanced (RD&E strategies; basic, applied, blue-sky,
development and delivery; risk; linkage and so on). Nor does the plan explain the rationale behind the allocation
of investment between the four arenas.
We understand that AgriFutures differs from many other RDCs in having multiple, often small, investment
portfolios (especially in arenas 3 and 4). Individual industries will have different requirements of their RD&E
portfolios – some, for example, might require a strong emphasis on applied research and extension while basic
research is more appropriate for others. The question of what a ‘balanced portfolio’ across all of AgriFutures’
investments looks like is therefore moot. We also understand that the allocation of resources between arenas
is determined to some extent by the respective revenue sources.
These caveats notwithstanding, the rationale behind how AgriFutures allocates money between and within
arenas could be more clearly explained in its three key planning and reporting documents.
As described in section 2.2.4, AgriFutures has nine industries with individual RD&E program plans that are
either three or five years in length. In addition, there are two plans covering new and emerging animal and
plant industries respectively (Table 4). Generally, these plans are highly regarded by the industries that they
serve, although a number of stakeholders indicated that they found it difficult to align these industry plans with
the current AgriFutures strategic plan, and particularly the planned outcomes from arenas 1 and 2. There would
be benefit from creating greater alignment between the AgriFutures and industry plans as the latter are
reviewed and updated. The recent ‘Pasture Seeds RD&E Program 2019-2023’ includes a summary of how
that plan links to the AgriFutures plan and serves as a good example of how this can be done.
Table 4: Summary of current AgriFutures-managed RD(&E) plans
PROGRAM 2015-16
2016-17
2017-18
2018-19
2019-20
Levy-funded industries
Chicken Meat R&D Plan 2014-2019 Year 2 Year 3 Year 4 Year 5
Honey Bee and Pollination Program 2014-2019 Year 2 Year 3 Year 4 Year 5
Rice R&D Plan 2012–2017 Year 4 Year 5
Rice RD&E plan 2016-2022 Year 1 Year 2 Year 3 Year 4
Pasture Seeds R&D Plan 2013-2018 Year 3 Year 4 Year 5
AgriFutures Australia| Independent performance review: final report
36 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PROGRAM 2015-16
2016-17
2017-18
2018-19
2019-20
Pasture Seeds RD&E Plan 2019-2023 Year 1 Year 2
Ginger 2017-22 Year 1 Year 2 Year 3
Export Fodder Five Year R&D Plan 2016-2021 Year 1 Year 2 Year 3 Year 4
Tea Tree Oil Program RD&E Plan 2018-2022 Year 1 Year 2
Interim Thoroughbred RD&E Plan 2018-2022 Year 1 Year 2
Core-funded programs and sub-programs
New and Emerging Plant Industries (Core Funded Plant
Industries) 2015-2018
Year 1 Year 2 Year 3
New and Emerging Animal Industries 2015-2018 Year 3 Year 4 Year 5
Kangaroo RD&E Plan 2016-21 Year 1 Year 2 Year 3 Year 4
Due to the nature of the industries involved, AgriFutures and its levied industry RD&E plans can sometimes
be seen as broader industry strategic plans, and this has an impact on the perceptions of the performance of
AgriFutures as an industry services company, even when the company may have little or no influence over
particular issues (e.g. marketing, market development and commodity prices).
4.3 ANNUAL OPERATIONAL PLANS
The current annual operational plan (AOP), ‘Research and innovation for rural prosperity’, for 2018-19, follows
the structural format and logical layout of the of the Strategic R&D Plan 2017-2022. Like the strategic plan, it
combines colour, infographics and tables that are well set out, logical and easy to follow. The ‘plan on a page’
format that describes the vision, arenas, goals, priorities, outcomes, purpose and values links the AOP to the
strategic plan very effectively.
All four arenas are very well articulated in terms of the goals, priorities, outcomes and projected investment
budget for 2018-2019. There is a clear section on both KPIs and the investment highlights for 2018-2019 by
arena. This is a very transparent mechanism to show how AgriFutures is implementing programs that will
deliver against outcomes in its strategic plan. This table could be replicated in the annual report with additional
columns reporting actual achievement against the targets for both the previous year and the life of the strategic
plan to date.
AgriFutures Australia| Independent performance review: final report
37 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
The 2018-19 AOP is well-structured. There is a detailed listing of projects, but this is provided as an appendix,
allowing the main body of the plan to be read quite quickly and efficiently. The plan meets all of the
requirements of the PIRD Act and Funding Agreement9 with respect to content:
How and to what extent R&D activities give effect to the Strategic R&D Plan;
The key R&D activities and projects (Appendix) to be funded during the year under each program;
Investment highlights arising from the R&D activities;
Estimates of expenditure by R&D arenas;
Key performance indicators; and
AgriFutures’ approach to ensuring a balanced portfolio (although this could be improved, as noted in
section 4.2).
The budget and expenses section (Appendix A) is very concise. Several industry stakeholders commented on
the need for more transparency and greater detail on expected levy income and expenditure by industry (noting
that actual financials are presented in the annual report). Providing greater detail of each industry’s financials
would improve perceptions of AgriFutures’ transparency in its dealing with those industries. Horticulture
Innovation Australia is a good example of an RDC dealing with multiple industries that does this well. The Hort
Innovation website has a page for each of its industries where annual financial statements on the particular
industry fund can be downloaded.
Recommendation: AgriFutures should separately publish annual financial statements for each of its levied
industries, showing at least the most recent year’s financial performance and the budgeted revenue and
expenditure for the current year.
The previous AOP of the review period (2017-18) is very similar to the 2018-19 plan, with very clear
descriptions of the themes, goals, priorities, outcomes, and KPIs. In contrast AOPs developed under RIRDC
are much more document-orientated and lack the visual and narrative layouts of the AgriFutures plans.
As with the strategic plan, industry personnel interviewed for this review generally indicated that despite their
awareness of the AOP, very few had opened or read the document. It is also interesting to note that the size
of the PDF for the 2017-18 and 2018-19 AOPs had more than doubled and now exceeds 2MB. Whilst this file
size may be appropriate for stakeholders with good internet speeds, some rural constituents still struggle to
download and manage a file of this size. Several stakeholders indicated that they would be interested in
receiving a two-page ‘snapshot’ material from the AOP summarising the goals and performance criteria for the
portfolio.
9 The provisions of the PGPA Act relevant to annual operational plans are not applicable to RDCs
AgriFutures Australia| Independent performance review: final report
38 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
4.4 ANNUAL REPORTS
The Annual Report 2017-18 is very long, at 189 pages, and extremely detailed. This is largely because the
annual report must cover a very extensive list of content requirements as set out in the PIRD Act, the PGPA
Act, the PGPA Rule 2014 and the Funding Agreement. These requirements are listed in detail in two
appendices (2 and 7).
The length of the annual report makes it an overwhelming document for all but the most dedicated stakeholder.
Consultations for this review confirmed that few stakeholders, except possibly one or two R&D providers and
government personnel, read the report. However, it is very well set out and follows the framework provided in
the strategic plan and in the AOP 2017-18. One omission is the presence of an executive summary although
there is a ‘Vision, highlights and achievements’ section of around 7 pages describing progress against the
strategic plan, RD&E achievements and organisational highlights. There are some excellent cases studies
throughout which add to the impact of the document.
The ‘Analysis of performance’ includes a table, ‘Measuring success’, which shows progress for the year against
the KPIs of the strategic plan, with either green ticks or red crosses providing a ready visual guide to overall
performance (see section 4.5). There is a good summary of outcomes relative to plan within each of the
programs within each of the arenas. Expenditure across the past three years is presented for each of the
programs, although an explanation of (sometimes very significant) changes in this expenditure would be a
useful addition. Showing the variance between actual and budgeted expenditure would also add to
transparency.
As noted in section 4.1, a standalone summary of each annual report would improve stakeholder awareness
of AgriFutures’ outcomes and impacts. The content of the ‘Analysis of performance’ section would serve this
purpose. We suggest that the results of any impact assessments might also be included (see section 7.5).
4.5 PERFORMANCE AGAINST PLANS
Section 7 of this report provides a review of AgriFutures’ performance as evidenced by the outcomes of impact
analyses of selected investments undertaken during the period. It is also important to assess AgriFutures
performance in meeting targets as detailed within its strategic plan and associated AOPs.
Table 5 is reproduced from the draft Annual Report 2017–18 and compares targets in the strategic plan with
achievements during the 2017–18 financial year.
AgriFutures Australia| Independent performance review: final report
39 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Table 5: AgriFutures achievement of KPIs
Arenas Priorities Key Performance Indicator Measure Units Target Achieved KPI
Results 2017-18 Notes
People and
Leadership
Attracting capable
people into careers
in agriculture
Annual intakes of students into
agriculture and agricultural
science courses at Australian
universities
Australian Council of
Deans Agriculture annual
survey
1800
graduates
per annum
No 1500 Only have data for 2016 intake.
Building the
capability of future
rural leaders
Percentage of participants who
feel their confidence as a leader
has increased significantly or
very significantly as a result of
participation in an AgriFutures
Australia sponsored activity
Survey of participants 80% Yes 88% Responses from:
- Horizon Scholars
- 2017 and 2018 AgriFutures™
Rural Women’s Award
State/Territory winners
- Ignite Advisory Panel.
National Challenges
and Opportunities
Informing debate on
issues of importance
to rural industries
Impact of AgriFutures Australia
sponsored studies on debates of
national significance to rural
industries
Number of significant National Rural Issues (NRI) studies published each year
5 Yes 6 reports 29 projects pursued under the
Emerging NRI Forum, with
AgriFutures Australia leading 10
projects.
Adapting new
technologies for use
across rural
industries
New technologies adapted for use
in Australian rural industries
Number of new
technologies entering
commercialisation phase
with private sector
participation
1 per annum
Yes 1 new technology entering
commercialisation
AgriFutures Australia supported
Water Save through the Sprout
X accelerator.
AgriFutures Australia| Independent performance review: final report
40 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Working
collaboratively on
issues common
across rural
industries
Evidence of collaboration
between RDCs in cross sector
investment initiatives
Number of collaborative
initiatives involving other
RDCs
10 per annum
Yes 49 collective projects AgriFutures Australia led 19 of
these projects. AgriFutures
Australia was also involved in 12
successful Rural R&D
for Profit Program bids (leading 5 and collaborating on 7).
Growing Profitability Engaging industry
participants in
determining RD&E
priorities
Percentage of growers
comfortable or very comfortable
paying the R&D levy
Annual stakeholder survey 80% - 69% 36 people responded to this
question in our stakeholder
survey. Therefore, numbers are
too low to be reliable.
Investing in
innovation that
assists levied
industries to be more
profitable
Degree to which the objectives of
the industry-based R&D plans
are being achieved
Percentage of KPIs met in
each Industry Program
R&D Plan
85% Yes 99% 296 of 299 project milestones
satisfactorily met objectives.
Delivering outcomes
to maximise industry
uptake and adoption
Stakeholders rate the value of
AgriFutures Australia’s
information products and
services as high or very high
Annual stakeholder survey 75% No Final reports - 66% Fact
sheets - 72% Case studies -
50%
Information on new
opportunities - 63% Scanning
for national challenges - 57%
AgriFutures Australia| Independent performance review: final report
41 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Emerging
Industries
Supporting the early
stage establishment
of high potential rural
industries
Number of new rural industries
reaching or exceeding $10
million per annum threshold
Number per annum 1 per
annum
Yes Black truffles (approx. $11m
based on rolling three-year
average)
Other emerging industries
supported by AgriFutures
Australia that have already
reached or exceeded the
$10m per annum threshold
include: crocodiles, dairy
goats and gamebirds/quail.
24 industries have been
identified with the potential to
reach $10m per annum
threshold by 2022 (Coriolis
Report).
AgriFutures Australia| Independent performance review: final report
42 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Table 5 indicates that AgriFutures has achieved many of its high-level targets / KPIs. The exceptions are:
Annual intakes of students into agriculture and agricultural science courses at Australian universities
(which will be extremely difficult for AgriFutures to specifically control);
Percentage of growers comfortable or very comfortable paying the R&D levy; and
Stakeholders rating the value of AgriFutures Australia’s information products and services as ‘high’ or
‘very high’,
It is noteworthy that the last two of these KPIs were measured by a recent survey by Down to Earth Research
(discussed in section 7.5). These results should be viewed with some caution, as the survey size was limited
and results are likely to have been influenced, at least in part, by the transition from RIRDC to AgriFutures and
the impact that may have had on interactions with levy-payers.
Also, we question whether ‘project milestones met’ (296 of 299) is an appropriate measure for the KPI ‘degree
to which the objectives of the industry-based R&D plans are being achieved’ (target 85 per cent). Whilst we
acknowledge the challenge of demonstrating performance against KPIs such as these, we suggest that more
robust measures of this KPI should be investigated. This is further discussed in section 5.6.
AgriFutures Australia| Independent performance review: final report
43 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
5. RESEARCH AND INNOVATION MANAGEMENT AND DELIVERY
5.1 R&I PROCUREMENT PROCESS
All the industries for which AgriFutures manages RD&E have developed and implemented their own strategic
R&D plans that guide the investment priorities within each of those industries (described in section 4.2). A
number of these plans have been updated in the last two years, primarily with the assistance of external
facilitators. There is a wide variation in the structures of those plans, particularly with respect the definitions of
outcomes, the KPIs and the time frames for programs and themes.
The annual priorities for the AgriFutures’ open call process are determined by a series of advisory panels
(section 5.2) and additional industry consultation as required. The timing of the open call varies with each
industry. The process commences with a call for preliminary research proposal (PRPs), which is open for
approximately six weeks. At the end of this period the PRPs are sent to the respective advisory panel members
for individual assessment and then a meeting of the panel is held to prioritise projects and select those that
should be developed into a full research proposal (FRP), usually by December. The FRPs are sent to the panel
and a panel meeting held to make final recommendations and selections.
The project selection criteria and process are documented in an internal policy and there are clear guidelines
on how the process is managed through Clarity® (the AgriFutures project management software system).
Contracting is managed by the program manager and the contracting administrator using a standard template
that is accepted in most cases by the research organisation contracted for the work. Several R&D providers
indicated that the efficiency of contracting within AgriFutures varies depending on the workload of the program
manager, but most agree that contracting times are comparable to those of other RDCs. A common
observation made to the review was that there are significant differences in attitude within AgriFutures to the
funding leverage and in-kind support sought from the R&D provider(s). Some R&D providers believed that this
inconsistency was due to variance in attitudes between program managers. AgriFutures should ensure its
procurement policy has clear and consistent guidelines for evaluating in-kind co-investment.
Internal and external stakeholders raised some concerns about the procurement process. At times, calls are
made when industries or programs have limited funds. The open call process presents some significant
opportunity costs for RD&E providers in writing and submitting PRPs and FRPs and for the panels in reviewing
the submissions. It may be more appropriate to have a targeted call, limited by scope and/or providers, in such
situations.
There is a view, too, that the process encourages short-term and production-orientated proposals and leaves
little opportunity for long-term investments particularly in downstream sectors of the value chain of some
industries. Blue-sky R&D may also be disadvantaged in open calls against more applied R&D. As the panels
evolve under AgriFutures, particularly those of larger industries, they may need to consider portfolio balance
more specifically and the potential value of longer-term and and/or more blue-sky value-chain-oriented RD&E.
We recognise though that the concept of investment balance has limited relevance for small portfolios where
it may be possible to fund only a few projects.
The application of the open call process for emerging industries was specifically highlighted as an issue for
AgriFutures’ consideration. Across the Emerging Industries program (arena 4) there is approximately $1.6
AgriFutures Australia| Independent performance review: final report
44 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
million available for investment, and when this amount is spread across 10 or more industries it is very difficult
to achieve ‘game-changing’ outcomes for those industries. An open call process for many of the emerging
industries is somewhat irrelevant as there are critical items that require funding including the situational and
life-cycle analyses. Some interviewees called for more government appropriation for emerging industries due
to the potential benefits that they might bring.
As shown in Figure 2 (section 2.3), annual expenditure varies substantially between the levied industries. The
rice and chicken meat industries are dominant. Smaller industries have, proportionally, much higher overhead
costs than larger ones. This presents a challenge for AgriFutures management in terms of what constitutes
fair and reasonable allocation of resources relative to the expectations of industries for both R&D outcomes
and communications. It also suggests a reason why some industries believe that they were under-serviced by
AgriFutures during the transition period. The allocation of staff resources on a pro rata basis (as suggested by
some industries) would result in smaller industries having very little time allocated to them. AgriFutures may
need to develop a transparent mechanism that allows for effective resource allocation between the levied
industries that would assist staff in managing portfolios of activities.
During consultations we heard from some stakeholders that AgriFutures’ R&I portfolio was insufficiently
strategic in arena 3 and reflected the more tactical short-term requirements of industries, rather than seeking
long-term ‘game-changing opportunities. We also heard that greater panel interaction might stimulate
opportunities for cross-industry investment in some key areas. It is not within our remit to comment on the
portfolio balance within industries, as it is ultimately a matter for each panel and each industry to decide how
funding should be allocated against their own strategic R&D plans.
A final observation in this section is that peak bodies of several of the smaller levied and emerging industries
expressed concern about the reduction or withdrawal, in some cases, of contracts by AgriFutures for services
such as industry extension. Some of these stakeholders believe this change will lead to ‘volunteer fatigue’ and
a reduction in in-kind contributions by individuals within those industries. The funding of peak bodies is a
perennial issue, especially smaller ones, and the question of funding such bodies to provide RD&E services is
one that Horticulture Innovation Australia in particular deals with regularly. We understand the arguments for
and against having industry groups either at arm’s length or as service providers and make no comment as to
the appropriateness of the AgriFutures approach, which must be determined on a case-by-case basis.
5.2 INDUSTRY CONSULTATIVE PROCESSES
AgriFutures has a series of advisory panels to advise on investment priorities. Whilst the advisory panel
structure has been in place for several years, the transition to AgriFutures allowed management to review the
structure and composition of the panels. In several cases, there has been a significant changeover in the
panels based on the desire of AgriFutures management to equip the panels with a more strategic and thought-
provoking skill set to complement the existing industry connectiveness and awareness. This process has
caused some disquiet among industry personnel, but it appears that the majority of the panels are now settling
into this new arrangement. Panel chairs who were interviewed were confident that the changes would deliver
positive results.
In many cases, the advisory panels provide the linkage between AgriFutures management and the industry.
Industry participants outside of the panels indicated that they saw the panel functions as including the provision
of reports on R&D outcomes back to industry and seeking feedback on current and future priorities. Panel
AgriFutures Australia| Independent performance review: final report
45 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
members, on the other hand, indicated the problem of a lack of time to undertake tasks outside of the meetings
and project reviews. The constraints to resourcing panel members to undertake outside activities is recognised.
5.3 PROGRAM MANAGEMENT AND REPORTING
The R&I Investment team comprises an experienced General Manager, three full-time and two part-time R&I
Program Managers, with support from two project administrators and a contract administrator. Given the size
of the organisation, the allocation of programs (industries) among R&D managers pragmatically reflects the
individuals’ skills and backgrounds rather than aligning strictly with the structure of the strategic plan. The GM
himself has directly managed many parts of the program over the last 12 months due to staff vacancies.
Although the team has been recruited relatively recently, most have good experience in RD&E management
and stakeholder engagement. In discussions with staff there was an obvious focus on:
Maximising the value and impact of investments for each industry;
Finding new opportunities for each industry, including possible transformational outcomes arising from
arenas 1 and 2;
Focussing on the cross-sectoral programs that align with the ‘National Challenges and Opportunities’ and
ensuring that outcomes from these programs impact on Australia agriculture in general; and
Having an effective process for RD&E management.
AgriFutures uses the online system Clarity® for project management (see also section 6.2). There was
widespread feedback from internal and external stakeholders that Clarity® is an impediment to effective project
management. The inability to link milestones to the KPI measuring success platform and the problematic
tracking of activities within projects are critical issues that should be resolved. It was not obvious whether
‘stop/go’ and/or ‘pivot’ milestones, are used to minimise project risks. There was no obvious mechanism to
determine the risks of each project and how this information is brought forward to the executive team and then
the board if warranted.
Several directors noted that they did not have a good feel for progress in the RD&E arenas (3 and 4), as the
information provided by management is somewhat ad hoc. It is recommended that a R&I progress report be
produced at least every six months for the executive and Board to provide a critical review of all current projects
and the life cycle status. This should include milestone achievements, progress towards outcomes, financial
compliance, potential risks, R&D provider satisfaction and any highlights/risks from expected outcomes. A
traffic light system is used to good effect by several RDCs for this purpose.
Recommendation: AgriFutures should develop an R&I progress report, aligned with the evaluation
framework, that can be used by the Board and senior management to enhance oversight of RD&E activities.
5.4 RD&E COLLABORATION
Collaborative RD&E is an important feature of AgriFutures’ charter.
AgriFutures Australia| Independent performance review: final report
46 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
AgriFutures has a solid reputation as being an effective partner in cross-sectoral initiatives. Generally, there
was good recognition and support from other RDCs for the transition to AgriFutures from RIRDC. Several
RDCs are supporters of programs in arenas 1 and 2 (see below) and believe that AgriFutures is an effective
manager of those programs. There has been strong support for evokeAG and for the Horizon scholarships.
There were no concerns expressed about efficiency or effectiveness of contract negotiations or
implementation. One area that might be improved relates to communication around arenas 2 and 3 as there
are some crossover activities particularly in the national challenges area and in programs that are relevant to
other RDC’s such pollination, weeds, pasture seeds and export fodder.
During the review period AgriFutures managed a number of collaborative projects, some of which were part of
the Federal Government’s RR&D4P program, contributing an estimated $22.96 million into RD&E funding over
the period. The expenditure on these projects is shown above in Figure 3. These collaborative projects include:
Consolidating targeted and practical extension services for Australian farmers and fishers (RR&D4P
Round 1): the aim of this project was to provide Australian agricultural extension services with greater
national coordination and leadership. Partners were New South Wales Local Land Services, Northern
Territory Department of Primary Industry, Tasmanian Institute of Agriculture and Fisheries, University of
Melbourne and Victorian Government Department of Economic Development, Jobs, Transport and
Resources.
Improved use of seasonal forecasting to increase farmer profitability (RR&D4P (Round 1): the aim of this
project is to define the critical seasonal climate risk information needed by Australian farmers and to
improve understanding of the usefulness of seasonal climate forecasts and how to incorporate these into
business decision making. The project has multiple partners including Grains Research & Development
Corporation (GRDC), Meat & Livestock Australia (MLA), Sugar Research Australia (SRA), Cotton
Research & Development Corporation (CRDC), several state agencies and universities, the Bureau of
Meteorology and Birchip Cropping Group.
New biocontrol solutions for sustainable management of weed impacts on agricultural profitability
(RR&D4P Round 2): this project brings together biocontrol expertise from four Australian and multiple
international research agencies to support the development of new agents on ten priority weed targets
for primary industry and agricultural water assets. Multiple partners including GRDC.
Securing pollination for more productive agriculture: Guidelines for effective pollinator management and
stakeholder adoption (RR&D4P Round 2): this project will increase the profitability and security of
pollinator dependent crops by improving the health, diversity and abundance of pollinators on farms.
Multiple RDC, university, state agency, industry and other partners.
Opportunities for primary industries in the bioenergy sector national RD&E strategy: with the aim of
improving coordination and collaboration in this area. Partners include Commonwealth and state
agencies, CSIRO, Bioenergy Australia, University of Sydney and SRA.
Climate Change Research Strategy for Primary Industries (CCRSPI): a program that will promote a
strategic and collaborative approach to climate change research, development and extension for primary
industries. Partners are RDCs, Commonwealth and state departments and CSIRO.
AgVet Collaborative Forum: this program aims to identify solutions to key pest and disease challenges
through improved access to AgVet technologies. It is supported by nine RDCs and two peak bodies.
AgriFutures Australia| Independent performance review: final report
47 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Primary Industries Health and Safety Partnership (PIH&SP): this project supports achievement of healthy,
safe and productive working lives in the primary industries through investment in RD&E to drive
sustainable improvements to work health and safety. Partners are CRDC, Fisheries Research &
Development Corporation (FRDC), GRDC and SRA.
In addition to the projects above, the AgriFutures Horizon Scholarship is supported by several RDC partners
including the Australian Egg Corporation, Australian Wool Innovation, Dairy Australia, CRDC, MLA and GRDC.
This program is further described in section 2.2.2.
Given the success of these collaborations and the quantum of R&D investment involved, it was surprising that
these activities and their success were not widely recognised by participants in arenas 3 and 4 interviewed for
this review. Levy payers and industry representatives did not appear to value AgriFutures’ cross-sectoral
activities and occasionally thought that these activities might be a distraction in achieving outcomes for those
industries. AgriFutures should look at increasing the visibility of its collaborative R&D projects and emphasising
the outcomes of these investments to the levied and emerging industries.
5.5 EXTENSION AND ADOPTION
Extension and adoption is a different proposition for AgriFutures than it is for other RDCs, especially those
dealing with single industries. As noted in section 4.2, each industry has its own optimal balance of investment
between strategic, basic and applied research, and extension. There are differences, for example, in the
distribution of participants by size between industries; in their business-orientation and receptivity to adoption
of R&D outputs; and the complexity of their value chains, to name just three factors.
AgriFutures relies more on the publication of R&D final reports, fact sheets and other awareness-raising
vehicles, rather than more involved and much more expensive models of extension such as farm walks,
demonstration sites, participatory RD&E and so on. However, some industries have extension programs. An
example is Rice Extension10, a program that includes the distribution of published materials but also the
conduct of discussion groups, field days, workshops and other interactive events.
We note too that AgriFutures is strongly involved in the advancement of agricultural extension as a discipline.
Arena 2, ‘National Challenges and Opportunities’, includes the extensionAUSTM platform11, which hosts a
community of practice around extension. extensionAUSTM is a partnership between AgriFutures and GRDC,
NSW DPI and Agriculture Victoria. It continues a long involvement with extension by RIRDC that includes the
Cooperative Venture for Capacity Building (CVCB) Joint Venture between RDCs led by RIRDC in the late
1990s and 2000s. The CVCB resulted in significant advancements in the understanding and practice of
extension and other capacity building in Australia.
We heard from some levied industries that extension services have decreased in recent years and that there
should be a refocus on providing more opportunities for producers and growers to access appropriate R&D
10 https://riceextension.org.au
11 https://extensionaus.com.au
AgriFutures Australia| Independent performance review: final report
48 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
information, particularly in formats that are more direct face to face rather than the reliance of on-line media.
They also noted that as traditional providers of extension activities (i.e. state departments) move out of this
activity, that there is a now a need for investment in extension activities from industry and this needs to be
factored into the R&D plans that industries develop in the future.
5.6 MONITORING AND EVALUATION
Under sections 10.3 of the Funding Agreement, RIRDC was required to develop an evaluation framework
which must:
Support the Program Framework;
Ensure that key performance related information is generated by the Program Framework and is routinely
collected and monitored;
Include a structured plan for the systematic evaluation of the efficiency, effectiveness and impact of
RIRDC's key investments; and
Include a means of publishing and disseminating relevant Research and Development outcomes and
outcomes of evaluations undertaken under subclause 10.4(c).
A further condition was that the framework was to be published on the RIRDC website within 30 days of
adoption by RIRDC.
The supplied evaluation framework for AgriFutures is a very high level 1.5-page document that outlines the
evaluation process and potential projects for evaluation. It states that projects will be monitored by compliance
to milestones and that each project must have a communication plan that ensures that findings are
disseminated effectively and efficiently. However, the framework lacks a logic linking the various performance
indicators, definitions of various levels of indicators (e.g. ‘outputs’, ‘outcomes’) and other important details.
There is additional detail in the section ‘Measuring success’ of the current strategic plan. This lists the KPIs for
each of the arenas, how they will be measured and the target for each. Although the ‘Measuring success’
section improves the framework, AgriFutures would benefit from the development of a more comprehensive
evaluation framework that includes a systematic logic for each of the arenas. AgriFutures might consider
approaching CRDC, which has an excellent example of a comprehensive evaluation framework.
As noted earlier, there are some KPIs in the strategic plan whose achievement will be dependent on a wide
range of external factors that are outside of AgriFutures’ control: for example, the annual number of graduates
in agriculture. Aspirational KPIs and targets, even if not fully attributable, can be reasonably used in strategic
plans if they truly represent an important outcome for an industry – for example, cost of production or product
sale price. They should however have supporting, partial indicators that help to explain movements in the
higher-level ones – in this case, for example, the number of prospective students enquiring about agriculture
courses or the number of applicants for the Horizon Scholarships.
AgriFutures Australia| Independent performance review: final report
49 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Recommendation: AgriFutures should develop and publish a more comprehensive evaluation framework that
allows for greater clarity on its activities across the four arenas. This would include reviewing the KPIs and
targets for each of the priorities in arenas 1 to 4.
5.7 INTELLECTUAL PROPERTY MANAGEMENT
AgriFutures has an Intellectual Property (IP) and Commercialisation Policy and IP and Commercialisation
Guidelines. These documents are quite dated (2015) but have sensible provisions, making the point very
strongly that IP and commercialisation activities must support ‘the bottom line – adoption, adoption, adoption’.
The key objective of the policy is ‘to utilise the intellectual property rights and commercialisation opportunities
to promote and enhance adoption of AgriFutures research and development outcomes to create a more
profitable, dynamic and sustainable Australian rural sector’.
AgriFutures has a ‘commercialisation tree’ to guide decision-making and roles and responsibilities of the
various levels of management and the Board are clearly described.
Burkinshaw12, in her review of procurement and contracting at AgriFutures, noted that there was inconsistent
record-keeping and management of the IP register and that Program Managers’ understanding of obligations
varied. She made a number of recommendations, ranging from reviewing the IP&C policy to considering the
establishment of an IP project team.
The review team was told of an incident in relation to one particular industry in which an item of IP was assigned
exclusively to a large commercial player without appropriate industry consultation. This caused considerable
industry disquiet. Burkinshaw recommends that AgriFutures should ‘Share IP intentions with stakeholders
(potential workshop)’. It is not clear whether this recommendation is intended as a one-off or ongoing activity,
but certainly it appears important that AgriFutures ensures there is appropriate consultation with industry during
the commercialisation process, noting that there may be sensitive information requiring careful management.
12 V. Burkinshaw 2018, AgriFutures Australia: Procurement and contracting review, September
AgriFutures Australia| Independent performance review: final report
50 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
6. LIAISON WITH STAKEHOLDERS
6.1 LIAISON WITH LEVY PAYERS AND INDUSTRY PROGRAMS
6.1.1 STAKEHOLDERS – GENERAL
AgriFutures has recently invested significant resources into its communication and capacity building
operations, in part to increase the overall profile of AgriFutures and particularly its activities in arenas 1 and 2
(especially the commitment to evokeAG). This has increased AgriFutures’ overall profile as an RDC in both
traditional and more modern social media avenues, although the difficulties experienced by all RDCs in
communicating value to levy payers is no less an issue for AgriFutures.
AgriFutures’ Strategic R&D Plan 2017-2022 states that it will target audiences through workshops, field days,
emails, newsletters, social media, webcasts, media engagements and the website.
AgriFutures produces and publishes a range of high-quality project reports, fact sheets and project summaries.
It also produces a quality monthly newsletter that is highly regarded and addresses key themes in each of the
four arenas. This newsletter (circulated to an estimated 10,000) includes reports on the latest research, news
and events and has a calendar of key dates. It is seen as an important sign-posting vehicle to key R&D reports
and AgriFutures events. In addition, a newsletter titled “Beak to Beak: AgriFutures Chicken Meat Update” is
produced and sent to all chicken meat stakeholders.
Consultation undertaken during this review indicated that the quality and frequency of information coming from
AgriFutures has improved significantly compared to that of RIRDC, particularly the online and social media
presence. As an example, a Google Analytics report of website activity from Aug 2017 to May 2018 indicated
over 166,000 users and 430,398 web page views which represented more than a 150 per cent increase from
the previous period.
The Down to Earth Research stakeholder survey13 undertaken in 2018 (discussed in greater detail in section
7.6) included some questions on AgriFutures’ communications and engagement. Respondents valued
AgriFutures’ fact sheets highly (72% compared to a target of 75%) although final reports were valued
somewhat less (66% compared to a target of 75%). It is understood that AgriFutures is intending to undertake
further surveys to provide a broader coverage of stakeholders.
6.1.2 REPRESENTATIVE BODIES
AgriFutures has two representative bodies as referred to in section 7 of the PIRD Act. They are:
• National Farmers’ Federation (NFF); and
• Australian Chicken Meat Federation (ACMF).
13 Down to Earth Research 2018, Producer and stakeholder survey 2018 report
AgriFutures Australia| Independent performance review: final report
51 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
In the Funding Agreement, there is an obligation to meet with the representative bodies formally every six
months. Discussions undertaken during this review indicate that formal meetings have only occurred annually
(for both bodies), however it was noted that informal meetings between AgriFutures and the two representative
bodies do occur more frequently.
In preparing an R&D plan, AgriFutures must also consult with and have regard (section 10.8 of the Funding
Agreement) to the views expressed by each of its representative organisations. AgriFutures is also required to
provide a copy of its AOP (section 26 of the PIRD Act). Both NFF and ACMF reported that while they did have
the opportunity to participate in the development of the current strategic plan, they need to make a greater use
of that opportunity in the future so as to provide more direction to the organisation.
Both organisations reported that the relationship with AgriFutures was positive and improving. In relation to
Arenas 1 and 2, NFF were keen to take the opportunity to participate in setting priorities for both cross-sectoral
R&D and National Challenges while ACMF were seeking to better understand how outcomes from these
arenas will lead to benefits for their industry (a feature consistent with other industries). Given the
comprehensive membership of the two representative bodies (especially NFF via state-based farmer
organisations), ongoing engagement with these organisations also benefits the broader communication of
AgriFutures activities.
Recommendation: AgriFutures should ensure it meets formally with NFF and ACMF every six months and
that it engages more actively with both organisations in planning and reporting.
6.1.3 LEVIED INDUSTRIES
A number of levied (and some non-levied) industries have peak industry bodies although there is no legislative
requirement for AgriFutures to liaise with any of these except ACMF. Nevertheless, it is understood that
AgriFutures does engage with peak bodies wherever possible. Establishing a more formal calendar of
engagement and communication with these bodies would significantly improve the perception of value from
AgriFutures management for a number of industries.
As indicated in earlier sections, almost all staff employed by RIRDC in Canberra did not make the move to
AgriFutures in Wagga Wagga. As a result, the relationships that had been formed between stakeholders and
RIRDC staff, and the general acceptance of the processes of engagement and communication, were largely
lost.
AgriFutures introduced a series of new processes and methods of engagement as it moved from a traditional
RDC funding provider model to a more faciliatory approach to RD&E management. This, coupled with the
change in personnel within AgriFutures, created the environment for some disconnect between AgriFutures
and key industries and particularly industry participants who held a long-standing view of how RD&E should
be managed.
In recent months, the board and senior management have initiated more direct communications with
representatives of levied industries and have also provided a more structured outline of the processes and
outcomes that AgriFutures is seeking with levied industries. This has been well received by most industries. It
AgriFutures Australia| Independent performance review: final report
52 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
is important that AgriFutures continues to improve its engagement and delivery of RD&E with levied industries
and that resources are allocated more on an industry needs basis rather than as a reflection of the size of the
industry. As noted earlier, AgriFutures is in the process of restructuring to provide additional senior resources
and capacity to the R&I area.
An online survey of levied and emerging industry stakeholders was conducted as part of this review. Thirty-
nine responses were collected, including responses from all industries except Buffalo and Deer. Although the
survey size was not sufficient to make a quantified statement(s) about AgriFutures, in general the trends in
responses reflected the views expressed during the consultations. They also reflected the findings of the Down
to Earth Research survey referred to previously where there were lower than expected levels of satisfaction
with the performance of AgriFutures as an investor in RD&E and its level of engagement.
Recommendation: AgriFutures should continue to improve its engagement and communication with levy-
paying (and emerging industry) stakeholders to ensure that relationships are constructive and industry input
to RD&E investment priorities is effective.
This disconnect between AgriFutures and its levied industries may have been amplified by the concurrent
increased focus on arenas 1 and 2. Several stakeholders indicated that they were concerned about the refocus
of AgriFutures and thought that resources may have been diverted from arena 3 to arenas 1 and 2. Clearly
this is a communication issue, as arenas 1 and 2 are funded through government appropriations and do not
use levy funds or matching contributions.
AgriFutures would benefit from further developing and extending the narrative that outcomes from arenas 1
and 2 can and will be of significant value to both the levied and emerging industries. Some industry
stakeholders see arenas 1 and 2 as competition and believe they distract staff and AgriFutures in general from
the ‘real’ business of RD&E management. There is no overt statement that capacity and capability building,
cross-sectoral programs and examination of rural issues of national significance offer substantial benefit to the
levied and emerging industries.
Recommendation: AgriFutures should develop and communicate a narrative that defines the value
proposition of enhanced cross-linkage between the four arenas for all stakeholders.
6.1.4 EMERGING INDUSTRIES
Effective liaison with the emerging industries is challenging for several reasons, notably:
The number of industries that are potential candidates;
The frequent lack of any industry structure and / or peak body;
Variation in the aspirations and expectations of AgriFutures in assisting these industries (see below); and
Limited AgriFutures resources.
AgriFutures Australia| Independent performance review: final report
53 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
AgriFutures has the mandate to support some capacity and capability functions, undertake feasibility studies,
identify trade requirements and barriers and invest in early stage R&D for some emerging industries. However,
AgriFutures is not able to invest in promotion or other marketing activities and this is what some emerging
industry players think they want. This mismatch of expectations can cause a level of frustration. Despite this,
though, many stakeholders were very complimentary about the services provided by AgriFutures including the
value of introductions to people and networks (particularly in the private sector) that can assist their industry’s
development.
We also note that there was some confusion among emerging industry stakeholders about how the $10 million
target for GVP was calculated when assessing whether an industry may be eligible for AgriFutures support.
The rationale, methodology and data metrics used in assessing emerging industries needs to be more
transparent to increase confidence for these industries.
6.1.5 INDUSTRY ADVISORY PANELS
Industry advisory panels play a key role for AgriFutures and are an important partner in the RD&E process.
AgriFutures communicates with panels through the open call process (see section 5.1) and, more generally,
through the GM of R&D and the Program Managers. The MD also liaises with panels from time to time,
In general, both the levied and emerging industries appear to have a high regard and respect for the
AgriFutures advisory panels and appreciate the opportunity to communicate with AgriFutures through the panel
members. There is strong industry ownership of the panels and, in the majority of cases, recommendations
and directions provided by the panels are broadly endorsed and accepted by industry. However, given the
small size of some of the industries, panel member independence and the process to avoid conflicts of interest
is sometimes questioned. A similar observation was made by the recent procurement and contracting review.
Having clear terms of reference, declarations of conflicts of interest and appropriate process to handle conflicts
when they arise should be a high priority for the AgriFutures R&I management.
In the transition to AgriFutures, several advisory panels have been subjected to ‘reinvigoration’ through an
open call process for panel members. This has resulted in the addition of several new panel members with
very strong qualifications in a broad range of areas. The process has also introduced some challenges,
especially in relation to a thorough induction process and clarity in relation to expectations of members’ roles
and functions.
Recommendation: AgriFutures should review the terms of reference and process of induction of panel chairs
and other members to ensure that panels provide effective and efficient advice on industry investment
priorities.
We understand that AgriFutures management recently conducted a forum with all panel chairs and this forum
was well received and provided clarity to the chairs on a number of issues. It is suggested that AgriFutures
continues the forum of panel chairs to create opportunities for cross-industry collaboration and information
sharing and to continually review and reinforce the charters of the chairs and panels.
AgriFutures Australia| Independent performance review: final report
54 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
This review also notes that the changes to panel membership were not always well regarded. Feedback
received indicated that often previous panel members were not adequately informed on why they had not been
successful in retaining panel membership. In some cases, the people concerned were well connected and
respected industry participants and their removal from the panel created some apprehension within their
industry. In future, AgriFutures should put in place appropriate communication mechanisms to ensure that
when panel changes are made, both the individual and the industry are carefully informed of the reasons.
6.2 LIAISON WITH RD&E PROVIDERS
As noted in section 5.4, AgriFutures was often identified during this review as being a good organisation to
collaborate and engage with and seems to be the general view of research providers. That said, it is
acknowledged that in the early stages of AgriFutures, a lack of resources in the R&I team made its
responsiveness to requests, and turnaround times for milestone reports and contracts, somewhat less than
optimal. We understand that this situation is changing with additional resources and program staff are now
more accessible and responsive.
Most R&D providers indicated that interactions with the panels had improved in recent months, however a
number noted that the open call process particularly for some industries was not as transparent as it could be
and, in some cases, they were unaware of the timelines of the open call. This has caused some tension
between AgriFutures and providers.
As noted earlier there are issues in relation to the ease of use and functionality of Clarity®, the AgriFutures
project management system. It is acknowledged that in the transition to AgriFutures significant corporate
knowledge and capacity of how this program operates has been lost. We also note that the Burkinshaw14
report made a series of recommendations in relation to Clarity® and that AgriFutures is progressing these. A
number of R&D providers indicated that issues with lodging of information in Clarity® was a significant source
of angst.
The Australian Rice Partnership was highlighted as one of the successful partnerships that AgriFutures has in
the RD&E environment. This joint venture between SUNRICE, NSW Department of Primary Industries and
AgriFutures provides significant research and extension outcomes for members of the rice industry.
6.3 LIAISON WITH GOVERNMENT
Under clause 14.1 of the Funding Agreement, the Chair of AgriFutures or other Board nominee must meet
with the Commonwealth at no more than six-monthly intervals, or at any other requested time, to provide a
briefing on a range of specified matters such as progress in implementing the AOP and R&D plan. AgriFutures
has met this formal obligation throughout the review period.
It is apparent that there is a very good relationship and high level of respect between AgriFutures and DAWR
staff. AgriFutures is seen as transparent and easy to work with and has a comprehensive system in place for
14 V. Burkinshaw 2018, AgriFutures Australia: Procurement and contracting review, September
AgriFutures Australia| Independent performance review: final report
55 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
compliance reporting. There was no evidence from DAWR to indicate that AgriFutures is anything but fully
compliant with all aspects of the Funding Agreement and the relevant acts. Meetings between AgriFutures and
DAWR are viewed by both parties as being productive and effective.
With the development of evokeAG, there has also been a strong relationship formed between AgriFutures and
the Australian Trade and Investment Commission (AUSTRADE). One of the key priorities of AUSTRADE is to
expose the Australian agricultural industry to global agriculture and food technology. AUSTRADE has
partnered with AgriFutures and uses evokeAG as a vehicle to bring international agriculture and food technology
companies to Australia. Representatives within AUSTRADE indicated that the partnership with AgriFutures
has been very positive and that engagement had led to promotion and showcasing of opportunities in Australia.
AgriFutures Australia| Independent performance review: final report
56 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
7. DELIVERY OF BENEFITS
7.1 INTRODUCTION
Like all RDCs, AgriFutures faces the challenge of demonstrating the value, benefits and impacts it delivers to
its stakeholders, be they government, levy payers and others in the industries to which AgriFutures provides
RD&E and other services. AgriFutures cannot rely on a profit, share price or dividends to shareholders to
demonstrate this value. Instead, AgriFutures relies on other measures of its value and impact through both
quantitative economic measures and qualitative measures. This value and impact go beyond economic
benefits and include impacts which cannot have a dollar estimate attached, notably environmental and social
benefits.
As part of its Funding Agreement with the Commonwealth Government, AgriFutures maintains an evaluation
framework which is in line with its R&D program framework. This evaluation framework includes the
preparation of independent impact assessments. These provide input to AgriFutures’ tracking of project
performance and informing investment decisions; its annual reporting to the Australian Government; reporting
to industry stakeholders; and contributing to the performance assessment of RDCs compiled by the Council of
Rural Research and Development Corporations (CRRDC).
The assessments show that research funds have been allocated and managed appropriately and are
producing positive impacts for Australian agriculture and the broader Australian community.
7.2 CONDUCT OF IMPACT ASSESSMENTS
AgriFutures delivers programs under each of its four arenas: (1) People and Leadership; (2) National
Challenges and Opportunities; (3) Growing Profitability; and (4) Emerging Industries. It conducts impact
assessments on the RD&E that it funds under arenas 3 and 4.
AgriFutures’ evaluation policy is focussed on assessing RD&E projects ex post in way that is simple, cost
effective for an organisation of its size and draws on AgriFutures’ existing data gathering systems15. This policy
has been in place since 2009 when it was first implemented by RIRDC. AgriFutures does not conduct ex ante
benefit-cost analyses of projects nor does it have an easy-to-use system (as do some RDCs) to estimate ex
ante benefit-costs from projects to assist in project selection.
Under the evaluation policy, the ex post impact assessments that AgriFutures commissions are conducted
towards the end of the five-year plans for each industry. However, this has not been the case in practice for
all industries. The following is a list of the industries for which AgriFutures funds RD&E under arenas 3 and 4
and when the most recent impact assessments were conducted in the past three years:
15 Agtrans Research 2018, An economic evaluation of AgriFutures’ investment in the New & Emerging Plant Industries
Program (2015-2018) and the New & Emerging Animal Industries Program (2013-2018)
AgriFutures Australia| Independent performance review: final report
57 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Fodder Crops (stand-alone in September 2014 and as part of the New & Emerging Plant Industries in
October 2018);
Thoroughbred Horses (May 2015);
Rice (September 2016);
Ginger (December 2016);
Pasture Seeds (May 2018); and
New & Emerging Plant Industries and New & Emerging Animal Industries (October 2018).
Of the other two industries for which AgriFutures funds RD&E projects, the most recent impact assessment
prepared for Chicken Meat was in September 2009 and the most recent for Honeybees and Pollination was in
February 2012.
For Chicken Meat, there was a performance review conducted in September 2013 which included an
evaluative case study of a Chicken Meat Program project that described industry and community benefits
attributable to RD&E investment. However, the decision was taken at the time that there would be no impact
assessment or benefit-cost analysis conducted. AgriFutures informed the review team that an impact
assessment of the 2014-2019 Chicken Meat plan was scheduled for the last quarter of 2018.
The most recent impact assessment prepared for the Honey Bees and Pollination Program was in February
2012. A review of the 2009-2014 Pollination Program RD&E Plan did not include an impact assessment but
concluded that ‘The Pollination Program Advisory Committee, noting stakeholder feedback received by
members, is satisfied with the extent to which the RD&E investment has delivered the objectives of the 2009-
14 Pollination Program RD&E Plan’. An undated annual review16 did not include any impact assessments of
projects funded but concluded that ‘The Honey Bee and Pollination Program is meeting the objectives of the
2014/15-2018/19 RD&E Plan through investment in projects that:
have delivered outcomes that have been adopted by the Australian honey bee and pollination industry;
and/or
are expected to deliver outcomes that will be adopted by the industry’.
As noted above, AgriFutures only has impact assessments prepared for RD&E projects covered by arenas 3
and 4. On face value, it would be possible to have impact assessments prepared for some of the investments
AgriFutures makes in arena 1 (People and Leadership) and in arena 2 (National Challenges and
Opportunities). For example, there are projects funded by AgriFutures in People and Leadership on leadership
and on capacity building which could have ex post impact assessments prepared. Other RDCs, such as FRDC,
have conducted triple-bottom line impact assessments on similar projects. Other projects, such as those on
biocontrol of weeds, could have ex ante benefit-cost analyses prepared.
16 RIRDC (undated), Annual review of Honey Bee and Pollination Program 2015-16
AgriFutures Australia| Independent performance review: final report
58 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Recommendation: AgriFutures should consider conducting ex post impact assessments or ex ante benefit-
cost analyses of some projects funded within arena 1 (People and Leadership) and in arena 2 (National
Challenges and Opportunities).
7.3 MEASUREMENT METHODOLOGY
AgriFutures contracts Agtrans Research to prepare its economic impact assessments. These ex post impact
assessments follow the guidelines17 set down by the CRRDC and are independent from AgriFutures.
The methodology followed by Agtrans Research for AgriFutures is sound and robust, producing conservative
estimates of the economic benefits of projects. Agtrans Research follows a clear, set routine in assessing each
project:
Selection of the projects to be assessed. This is not a random selection as recommended by the CRRDC
guidelines but is a thorough selection process guided by Agtrans Research with input from AgriFutures
staff from those projects that had been funded in the three- or five-year period of the relevant industry
plan. Some projects are excluded from the impact assessments because project funding or deliverables
fall outside the timeframe, because there is insufficient data to prepare an assessment or due to
confidentiality issues. In some cases, ‘small’ projects (funding less than $25,000) have also been
excluded;
Qualitative assessment and description of the projects within each industry program;
Calculation of the investment in the projects, both by AgriFutures and others (including a cost of managing
the AgriFutures funding, based on a multiplier), deflated to a common year;
Clear identification and description of the triple-bottom line impacts (economic, social and environmental);
Identification of the private versus public impacts;
Brief commentary on the likely distribution of the private impacts along the supply chain to the consumer,
and domestic versus international. This commentary is typically limited to one to two paragraphs;
Analysis of how the impacts match with Australian Government priorities and which priorities;
Valuing the impacts, based on independent research and data, as well as interviews with research staff,
program managers and others using experience and judgment to ensure that impacts are realistic;
Clearly setting out the assumptions used for each benefit in a summary table for each project (including
scientific citations);
Taking risk into account through risk factors (probabilities) along the pathway to impact such as probability
of output, outcome and/or impact;
17 CRRDC 2014, Impact assessment guidelines, and CRRDC 2018, CRRDC impact assessment guidelines revision – April
2018
AgriFutures Australia| Independent performance review: final report
59 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Describing the impacts that were not valued and why they could not be valued (this can be due to lack of
data, a high degree of uncertainty about the impact or the likely low relative significance of the impact);
and
Preparing the economic analysis of the impacts.
These assessments are generally compared with a reasonable counter-factual – that is, what would otherwise
have occurred if the project had not been done. This acknowledges that the world does not stand still.
Furthermore, the assessments also include all the costs involved in the project, both the project and fund
management costs incurred by AgriFutures and the costs incurred by farms and other stages in adopting the
new technology.
There is a wide range and diversity of the outcomes from the projects conducted under each industry plan,
which can make valuation of the impacts of individual projects difficult. Agtrans Research has addressed this
by categorising each project according to its contribution to selected types of impacts. Some of these impacts
have then been valued in monetary terms and the monetary values of each impact aggregated to provide an
estimated total value of the benefits from each industry program.
All of the assessments except for that on Thoroughbred Horses report on lower and upper bound estimates of
key economic investment measures: net present value (NPV), benefit cost ratio (BCR), internal rate of return
(IRR) and modified internal rate of return (MIRR) for various time periods after the last year of investment (0,
5, 10, 15, 20, 25 and 30 years). Each assessment also reports on the sensitivity of the results to key
assumptions. In addition, each report includes a table of confidence ratings of the coverage of benefits and of
the assumptions. These confidence ratings are high, medium or low.
7.4 DEMONSTRATED BENEFITS
As reported above, there have been six impact assessments prepared since May 2015 for six industries or
industry groups. Table 6 provides a summary of the lower-bound reported monetary results from these six
impact assessment reports over a 30-year period. This is for the total investment (AgriFutures investment plus
investment by others) for all projects funded in each industry RD&E plan. The net present values (NPVs)
shown in the table are in dollar terms for various base years, depending on when the impact assessment was
conducted. For example, the NPV for New & Emerging Plant Industries and for New & Emerging Animal
Industries are in 2017/18 dollar terms.
AgriFutures Australia| Independent performance review: final report
60 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Table 6: Summary of results from impact assessment of AgriFutures RD&E projects under each industry or
industry grouping
INDUSTRY/
INDUSTRY GROUPING
ECONOMIC MEASURE*
Present
value of
benefits
($m)
Present
value of
costs ($m)
Net
present
value ($m)
Benefit-
cost ratio
Internal
rate of
return (%)
Modified
internal
rate of
return (%)
Thoroughbred horses (May
2015) $28.1 $12.4 $15.7 2.3 11.4% 6.5%
Rice (September 2016) $254.7 $38.7 $216.0 6.6 32.9% 13.1%
Ginger (December 2016) $23.3 $2.9 $20.4 8.0 73.9% 13.5%
Pasture Seeds (May 2018) $58.5 $9.0 $49.4 6.5 12.6% 8.3%
New & Emerging Plant
Industries (October 2018) $19.0 $16.0 $3.0 1.2 5.9% 5.6%
New & Emerging Animal
Industries (October 2018) $16.7 $10.7 $6.0 1.6 8.2% 6.4%
Source: AgriFutures Australia – Various impact assessment reports prepared by Agtrans Research between 2015 and 2018 * Based on a 30-year term for the total investment in all projects funded under each RD&E plan. NPV values are based in the $ terms
of various years depending on when the impact assessment was prepared. Lower bound estimates reported. ~ Only one set of results reported for Thoroughbred Horses: not lower and upper bound
As can be seen, the impact assessments point to significant economic returns from the RD&E investments in
the more established industries. The lower bound estimates shown have NPVs ranging from $15.7 million to
$216.0 million, BCRs of 2.3 to 8.0 and MIRRs of between 6.5 per cent and 13.5 per cent. The economic
impacts from the new & emerging industries are smaller but still positive, with BCRs of 1.2 (Plants) and 1.6
(Animals). Even so, the MIRRs are a healthy 5.6 per cent and 6.4 per cent. The upper bound estimates for the
five impact assessments (which does not include Thoroughbred Horses) are higher than those shown in the
table, with NPVs ranging between $11.1 million (New & Emerging Animal Industries) and $221.0 million (Rice),
BCRs between 3.3 (New & Emerging Animal Industries) and 23.6 (Pasture Seeds) and MIRRs between 8.8%
(New & Emerging Animal Industries) and 15.6% (Ginger).
For some of the impact assessments, Agtrans Research prepared more detailed assessments by program
within each industry RD&E program. For example, in Rice, there were three clusters assessed: Variety
Improvement with a BCR of 8.3 over 30 years; Capacity Building with a BCR of 3.9; and Other Valuations with
a BCR of 7.1.
AgriFutures Australia| Independent performance review: final report
61 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Agtrans Research provides a number of recommendations for consideration by AgriFutures in each of the
reports. The more significant recommendations are:
Structure future R&D plans around outcome areas, with outcome maps to identify which outcomes
prospective investments and projects seek to address. These would be shared with researchers to focus
research effort;
Undertake specific benchmarking activities to understand the diversity of new and emerging industries
and improve baseline data; and
Develop capacity in each industry to monitor the development, adoption and value of industry best
management practices.
7.5 COMMUNICATING THE DEMONSTRATED BENEFITS
The results from the impact assessments for the various industries clearly demonstrate that AgriFutures’ RD&E
activities are delivering significant value to the industries that it supports through the RD&E programs. This
may not be evident to all in each industry, at least in part due to a lack of understanding about the methodology
used for the impact assessments leading to scepticism about the results. This is always a challenge for RDCs,
so a focus needs to be on clear communication of the methodology and the results, perhaps using case
studies.
AgriFutures provides in its annual reports’ information on the aggregate BCRs from any impact assessments
prepared during the year. For example, the Annual Report 2017/18 comments in the section on the Pasture
Seeds program that ‘An evaluation of investment in the Pasture Seeds R&D Program, completed for the period
2013-18, found the program was delivering significant impact and providing a positive return on investment,
with the benefit-cost ratio for investment calculated to be between 6.5 and 23.6 to 1’ (p 90). Furthermore, the
annual reports provide a two-page summary of the detailed report prepared for each impact assessment by
Agtrans Research. This report provides the key economic measures at an aggregate level, including the NPV,
the BCR, the IRR and the MIRR. There is no mention in this summary of the benefits that were identified for
each industry RD&E program but that could not be assessed monetarily.
While the information on the evaluations is included in the annual reports, the information is quite deep in the
reports, and there is no mention of the results from the evaluations in the ‘Highlights and achievements’ section
at the front of the annual report.
The reports from three of the impact assessments prepared since 2015 are available on the AgriFutures
Australia website18:
Rice;
Thoroughbred Horses; and
Ginger.
18 www.agrifutures.com.au/publications-resources/publications/
AgriFutures Australia| Independent performance review: final report
62 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
The reports prepared in 2018 (Pasture Seeds and the report on New & Emerging Plant Industries and New &
Emerging Animal Industries) were not available at the time of writing this performance review report (November
2018).
The availability of the reports on the AgriFutures Australia website allows those inclined to access and read
the results. These reports may be, however, difficult for the casual reader and layperson to read and
understand.
Industry participants may also not appreciate the value being delivered by AgriFutures because of variation in
the share of benefits between regions or industry sectors. The methodology used by Agtrans Research does
not permit an assessment of the share of benefits between regions or sectors. Agtrans Research does,
however, comment within the individual industry RD&E reports about the possible share of benefits from a
project between sectors.
Recommendation: AgriFutures should continue to conduct ex post impact assessments of its RD&E
investments in each of the industries it supports at the end of the five-year plans for each industry. This includes
in particular the impact assessment for the 2014-19 Chicken Meat RD&E plan scheduled in the last quarter of
2018 and first quarter of 2019 and an impact assessment for the 2014/15-2018/19 Honey Bee and Pollination
plan which should be conducted in 2019.
Recommendation: The focus for AgriFutures should be on communicating the results of the ex post impact
assessments to stakeholders using clear, simple language. AgriFutures should consider preparing and publicly
releasing a short performance evaluation report each year, which would include results against its key
performance indicators as well as the results from any impact assessment conducted in that year.
7.6 STAKEHOLDER PERCEPTIONS OF VALUE
Some limited evidence for stakeholder perceptions of the value delivered by AgriFutures is available in the
stakeholder tracking survey carried out for AgriFutures19. This survey was conducted online in July 2018 and
included a number of questions about the understanding of and attitudes towards AgriFutures among
stakeholders.
The responses need to be interpreted with caution as the survey was not random, creating potential self-
selection and non-response bias. The number of responses was also low, so statistical power within segments
of respondents (especially producers from AgriFutures-supported industries) is low (n=60, but not all
respondents answered all questions).
19 Down to Earth Research 2018, Producer and stakeholder survey 2018 report
AgriFutures Australia| Independent performance review: final report
63 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
Overall, 59 per cent of all stakeholders were ‘fairly satisfied’ to ‘very satisfied’ with AgriFutures’ performance
as investors in RD&E, but this figure varied between 45 per cent of producers to 84 per cent of People and
Leadership participants.
Satisfaction ratings among producers from the survey are summarised in Table 7. The ratings are rather mixed,
with fewer than 50 per cent of respondents reporting that they benefited from RD&E projects and only 20 per
cent saying that AgriFutures had a significant role in delivering the benefit from RD&E projects. As well, fewer
than half of respondents were satisfied that AgriFutures adds value to their business and satisfied with the
allocation of funding to R&D issues.
Despite these responses, more than two thirds of respondents were comfortable to pay the levy for RD&E
projects. This suggests that AgriFutures could do more in communicating with their stakeholders about its role
in funding RD&E projects and in demonstrating the value of the RD&E projects to participants in the industries
which AgriFutures supports.
Table 7: Producer ratings of AgriFutures Australia in 2018 survey
ATTRIBUTE % OF RESPONSES*
Directly benefited from RD&E projects (answering ‘yes’) 46%
AgriFutures Australia had a significant role in the benefit from RD&E projects
(answering ‘yes’)
20%
Satisfaction that AgriFutures adds value to the farm business activities (‘fairly high’ or
‘very high’)
43%
Comfort in paying the levy for RD&E projects (‘fairly comfortable’ or ‘very
comfortable’)
69%
Satisfaction with allocation of funding to R&D issues (‘fairly high’ or ‘very high’) 45%
Source: Down to Earth 2018
* % of respondents from AgriFutures Australia-supported industry
Responses from and from People and Leadership participants were more positive (Table 8).
Table 8: People and Leadership participants’ ratings of AgriFutures Australia in 2018 survey
ATTRIBUTE % OF RESPONSES*
Impact on knowledge of being a leader of industry (‘increased slightly’ or ‘increased
significantly’)
91% (72%
significantly)
AgriFutures Australia| Independent performance review: final report
64 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
ATTRIBUTE % OF RESPONSES*
Impact on confidence of being a leader of industry (‘increased slightly’ or ‘increased
significantly’)
87% (59%)
Impact on confidence to apply for new leadership roles (‘increased slightly’ or
‘increased significantly’)
76% (35%)
Taken on new leadership roles (answered ‘yes’) 50%**
Source: Down to Earth 2018
* % of respondents from AgriFutures Australia-supported industry
** this number reduced significantly by Horizon Scholarship winners: 81% RWA, 100% Ignite
The findings of the Down to Earth research, notwithstanding the caution about bias and numbers, are
consistent with those of the survey and interviews conducted for this review:
There is strong support for People and Leadership and AgriFutures’ delivery of its various programs. The
strengthening of capacity in the communications team has led to an improvement in both engagement
and communications with participants, stakeholders and investors in the three key programs of RWA,
Horizons scholarships and the Ignite Network. RWA participants and alumni indicated that the program
had provided important opportunities in personal development, access to mentoring and resources and
in reaching networks that assisted them to achieve more substantiative outcomes.
We note that annual RWA gala dinner held in September 2018 was attended by over 500 industry and
government stakeholders and was universally applauded for both the high standards of the finalists and
the high level of communications and media outcomes that arose from that event. A number of sponsors
(including the corporate and private sectors) indicated that the RWA awards had led to a clear shift in
awareness and acceptance of the role that women play in Australian agriculture and that the program
provided opportunities to truly develop leadership capacity of women.
Similarly, arena 2 and in particular evokeAG are viewed positively. evokeAG is seen to represent a
significant opportunity for AgriFutures to take a strong leadership position in bringing emergent
technologies and thought leadership to agriculture. Over 50 speakers and 750 delegates from Australia
and internationally are expected to participate in evokeAG.
In arenas 3 and 4, the view is more mixed, for reasons described in various parts of this review.
AgriFutures Australia| Independent performance review: final report
65 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
8. THE AGRIFUTURES RELOCATION
A component of the TOR for this review was an evaluation of the relocation from Canberra to Wagga Wagga
of RIRDC and then AgriFutures. As indicated throughout this review, the regional relocation of a significant
government organisation was initially viewed with some concern and scepticism by both industry stakeholders
and RD&E providers. Those concerns were primarily related to the ability to retain or attract appropriately
qualified staff and to maintain sufficient corporate knowledge to ensure that the processes and activities within
RIRDC were adequately transferred. Overall, stakeholders feel that the AgriFutures Board and management
handled the relocation quite well and that negative impacts of the relocation are now being addressed.
The decision to move to Wagga Wagga was based on a thorough analysis of facilities and opportunities within
the Wagga Wagga region and the opportunity to link to a strong regional university in CSU. CSU clearly
provided a very compelling business case for the relocation of AgriFutures to its campus. A dedicated building,
which is well located and provides excellent facilities to staff, was made available to AgriFutures. Interaction
between AgriFutures and CSU is now seen as a highlight and provides the opportunity for staff, particularly
the R&I team, to engage with research peers and to attend professional development opportunities and
industry events such as field days.
The MD’s personal relocation to Wagga Wagga was highly regarded and demonstrates that highly experienced
personnel can be attracted to regional locations. Whilst only one other (part-time) staff member relocated to
Wagga Wagga, there has been careful recruitment of new staff, with highly qualified and competent people
being appointed to most positions.
On the negative side, the recent review of AgriFutures’ procurement and contracting functions20 (referred to
above) identified that the loss of corporate memory in the move to Wagga Wagga and the inadequacy of a
formal process of induction / handovers placed significant additional workload burden on newly-employed staff.
There was also an absence of a structured training program which resulted in differing interpretations of
policies and variations of procedures which did slow down the functionality and connectiveness of the
company. The procurement review is now being used to address those issues and the reviewer was very
confident that the senior management and staff had the capacity to quickly adapt and provide higher levels of
service. A key learning from this review is that when organisations move location and there is an expected
loss of staff, effective induction and training programs including handover are important.
That said, a major relocation presents certain challenges that are beyond senior management control. Existing
staff may decide to depart the organisation at any time after a relocation is announced. The almost inevitable
gap between the departure of current staff and the appointment of new staff means that effective handover will
always be problematic and difficult to implement.
There are still some concerns about loss of corporate memory and established relationships. As noted above,
though, some of these concerns may be confused with the change in the AgriFutures corporate culture.
Relationships and trust between an organisation and its stakeholders are always critically important and these
20 V. Burkinshaw 2018, AgriFutures Australia: Procurement and contracting review, September
AgriFutures Australia| Independent performance review: final report
66 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
take time to develop. The Board and senior management need to be conscious of this fact and ensure that
resources are allocated appropriately.
Proximity to the levied industries has been an important factor in shaping industry participants’ responses to
the relocation. Being in the Riverina has provided greater opportunities for AgriFutures staff to engage with
industries such as rice and pasture seeds and to attend industry events. Industries centred away from Wagga
Wagga believe that contact and the opportunity for contact with AgriFutures has been diminished as they now
need to justify travelling to Wagga Wagga to meet with the organisation. This is particularly true of those that
were based in Canberra or had reasons to travel to Canberra. Effective travel planning and exercising the
option of moving critical meetings to other locations as needed, as well as the use of modern conferencing
technologies, will reduce this impost.
In summary, the AgriFutures relocation to Wagga Wagga should be seen as a positive and successful model
of regionalisation.
AgriFutures Australia| Independent performance review: final report
67 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
9. CONCLUSIONS AND RECOMMENDATIONS
As noted at the start of this report, the recent history of AgriFutures / RIRDC needs to be acknowledged when
considering the findings of this review. The AgriFutures Board and staff were faced with many challenges not
usually encountered by RDCs in the lead-up to an independent performance review.
AgriFutures is establishing itself as a well-managed, high-performing organisation that is well respected by
stakeholders, particularly in arenas 1 and 2. Corporate governance is strongly embedded in the company and
compliance with the considerable obligations conferred upon statutory RDCs is very high. The Board and
management are well regarded and respected for their experience and networks. AgriFutures has an excellent
relationship with the Commonwealth Government and is highly collaborative with other RDCs. There is no
evidence for AgriFutures having failed to fulfil, or being at risk of not fulfilling, any of the obligations imposed
by its Funding Agreement with the Commonwealth, the PGPA Act or the PIRD Act.
The transition from RIRDC to AgriFutures has resulted in the creation of some important cross-sectoral
initiatives. AgriFutures is becoming recognised as a leader in the ag-tech ecosystem and has provided an
important catalyst to generate awareness and interest through evokeAG.
Given the quite significant change in direction that AgriFutures has taken, as well as the almost total change
in staff compared to RIRDC, it is not unexpected that some relationships with the levied (arena 3) and emerging
industries (arena 4) would be challenged and there have undoubtedly been shortcomings in this regard.
AgriFutures needs to continue to build its RD&E management capability and relationship management. It also
needs to ensure that sufficient resources (at all levels) and organisational balance are provided to extract the
best possible outcomes for all stakeholders. Recent decisions to increase senior R&I personnel are noted and
should further assist in this regard.
Assessments of the outputs and impacts from RD&E projects delivered by AgriFutures (and RIRDC) clearly
indicate that considerable benefits have been achieved, although AgriFutures could improve its communication
of the value from its activities.
The move from Canberra to Wagga Wagga was a very considerable undertaking, involving not only a change
in a geographical location but also a change in the Board, a change in scope / focus and a huge change in
staff. All four elements presented both opportunities and challenges, but it is generally acknowledged that the
transition has been very positive.
The review has identified several areas in which improvements might be made to the performance of
AgriFutures. These are, for the most part, concerned with RD&E processes, monitoring and evaluation and
the reporting of performance. Fifteen recommendations are made. These are listed below, and each is rated
either:
Critical: should be implemented as a matter of urgency in order for AgriFutures to meet its legal and
regulatory obligations.
Important: actions that are expected to deliver significant benefits to the company and industry.
Better practice: expected to deliver incremental performance improvements.
AgriFutures Australia| Independent performance review: final report
68 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
RECOMMENDATION PRIORITY
1 The AgriFutures Board should consider a schedule of two board performance reviews
over each appointment period, including the possibility of an external review in year
three. These reviews should include evaluation of the Board and Audit Committee and
their respective chairs.
Better
practice
2 The AgriFutures Board should consider establishing a committee of the Board to
advise it on people-related matters, possibly including succession planning, internal or
external performance reviews and shaping AgriFutures’ corporate culture.
Better
practice
3 AgriFutures should consider simplifying its governance documentation by compiling its
policies into a small number of handbooks, and developing a register of all policies,
procedures, plans, registers and other important documents.
Better
practice
4 AgriFutures should develop a formal performance assessment and review process for
all employees.
Better
practice
5 AgriFutures should consider developing short summaries of its key documents
(strategic plan, annual operating plan and annual report (see also Recommendation
15)).
Better
practice
6 AgriFutures should separately publish annual financial statements for each of its levied
industries, showing at least the most recent year’s financial performance and the
budgeted revenue and expenditure for the current year.
Better
practice
7 AgriFutures should develop an R&I progress report, aligned with the evaluation
framework, that can be used by the Board and senior management to enhance
oversight of RD&E activities.
Better
practice
8 AgriFutures should develop and publish a more comprehensive evaluation framework
that allows for greater clarity for its activities across the four arenas. This would include
reviewing the KPIs and targets for each of the priorities in arenas 1 to 4.
Important
90 AgriFutures should ensure it meets formally with NFF and ACMF every six months and
that it engages more actively with both organisations in planning and reporting.
Important
10 AgriFutures should continue to improve its engagement and communication with levy-
paying (and emerging industry) stakeholders to ensure that relationships are
constructive and industry input to RD&E investment priorities is effective.
Better
practice
11 AgriFutures should develop and communicate a narrative that defines the value
proposition of enhanced cross-linkage between the four arenas for all stakeholders.
Better
practice
AgriFutures Australia| Independent performance review: final report
69 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
RECOMMENDATION PRIORITY
12 AgriFutures should review the terms of reference and process of induction of panel
chairs and other members to ensure that panels provide effective and efficient advice
on industry investment priorities.
Better
practice
13 AgriFutures should consider conducting ex post impact assessments or ex ante
benefit-cost analyses of some projects funded within arena 1 (People and Leadership)
and in arena 2 (National Challenges and Opportunities).
Better
Practice
14 AgriFutures should continue to conduct ex post impact assessments of its RD&E
investments in each of the industries it supports at the end of the five-year plans for
each industry. This includes in particular the impact assessment for the 2014-19
Chicken Meat RD&E plan scheduled in the last quarter of 2018 and first quarter of
2019 and an impact assessment for the 2014/15-2018/19 Honey Bee and Pollination
plan which should be conducted in 2019.
Better
practice
15 The focus for AgriFutures should be on communicating the results of the ex post
impact assessments to stakeholders using clear, simple language. AgriFutures should
consider preparing and publicly releasing a short performance evaluation report each
year, which would include results against its key performance indicators as well as the
results from any impact assessment conducted in that year.
Better
practice
AgriFutures Australia| Independent performance review: final report
70 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
APPENDIX 1: KEY DOCUMENTS REVIEWED
ACTS AND FUNDING AGREEMENT
Funding Agreement 2015-19 between the Commonwealth of Australia represented by the Department of
Agriculture and the Rural Industries Research and Development Corporation
Primary Industries Research and Development Act 1989
Public Governance, Performance and Accountability Act 2013
Public Governance, Performance and Accountability Rule 2014
CORPORATE AND GOVERNANCE
Board Governance Manual (2018)
Audit Committee Charter (2018)
Risk Management Plan 2017-2020 (2017) and 2017-18 Risk Assurance Map
Conflict of Interest Policy (2016)
Intellectual Property and Commercialisation Guidelines (2015)
Work Health and Safety Policy (2014), work health and safety update for Board and minutes (March
2017)
Fraud Control Plan 2018-2020 (2018)
Letter to Minister Joyce from Selection Committee, 24 July 2017
Audit Committee meeting agenda and minutes, February and May 2018
Procurement and contracting review, Vickie Burkinshaw, September 2018
STRATEGIC AND OPERATIONAL PLANS, ANNUAL REPORTS, PROCESSES
RIRDC Corporate Plan 2012-2017
RIRDC Research & Development Plan 2016-2021
AgriFutures Australia Strategic R&D Plan 2017-2022.
Annual operational plans 2015-16, 2016-17 (RIRDC), 2017-18, 2018-19 (AgriFutures Australia)
Annual reports 2015-16, 2016-17 (RIRDC), 2017-18 (AgriFutures Australia)
Industry / program 5-year RD&E plans:
Horse 2011-16, interim thoroughbred 2017-2022
Honeybee 2012-2017
Chicken meat 2014-2019
Pasture seed 2013-18, 2019-2023 (draft)
Animal industries – new, developing and maturing 2013-2018
AgriFutures Australia| Independent performance review: final report
71 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
New and emerging plant industries (3 years) January 2015 – June 2018
Rice 2016/17 – 2021/22
Export fodder 2016-2021
Kangaroo 2016-2021
Ginger 2017-2022
Tea tree oil 2018-22
New and Emerging Industries National RD&E Strategy 2010
RESEARCH INVESTMENT AND REPORTS
Leecia Angus Consulting, Current cross-RDC collaborative investments: Status report to the Council of
Rural Research and Development Corporations (CRRDC), April 2017
AgriFutures cross-sectional collaborative framework and budget 2017
United States Studies Centre, Sydney University. Australian AGTECH: Opportunities and challenges as
seen from a US venture capital perspective, 2017
MONITORING AND EVALUATION
AgriFutures Australia Evaluation Framework (2017)
Performance reviews / economic evaluations / impact assessments:
Chicken meat program 2009-14 (AgEconPlus)
Chicken meat program five-year plan 2014-19 (AgrEconPlus)
Fodder crops R&D program 2014 (Agtrans Research)
Wildflowers and native plants R&D program 2014 (Agtrans Research)
Horse RD&E program 2015 (Agtrans Research)
Ginger R&D program 2016 (Agtrans Research)
Rice R&D program 2012-2017 (Agtrans Research)
New and emerging plant industries program 2015-2018 and the new and emerging animal industries
program 2013-2018 (Agtrans Research)
Pasture seeds R&D program 2013-2018 (Agtrans Research)
SURVEYS AND COMMUNICATIONS
Google Analytics reports for RIRDC (1/715-28/8/17) and AgriFutures Australia (28/8/17-29/5/18) websites
Media reporting statistics, 2017-18
AgriFutures Producer and Stakeholder Survey 2018 Report, Down to Earth Research, August 2018
AgriFutures Australia | Independent performance review: final report
72 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
APPENDIX 2: OBLIGATIONS OF AGRIFUTURES UNDER THE FUNDING AGREEMENT
The following table provides a listing of AgriFutures obligations under the its Funding Agreement. In each case, this review found that:
There was positive evidence of fulfilment of the obligation;
There was indirect evidence that the obligation had been fulfilled, for example the advice of DAWR representatives; or
The obligation was not relevant during the review period.
Note that the Funding Agreement refers to RIRDC, but this has been replaced with ‘AgriFutures’ throughout the table.
FUNDING AGREEMENT OBLIGATION CLAUSE(S)
Compliance with legislation
Comply with the PIRD Act 1989, the Regulations and the PGPA Act 3.1
Corporate governance and Board performance
Comply with corporate governance requirements in the PGPA Act and implement a framework of good corporate governance practice, drawing on better practice guidance
as appropriate
4.1
Report on steps consistent with 4.1 at 6-monthly meetings 4.2, 14.1
AgriFutures Australia | Independent performance review: final report
73 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
FUNDING AGREEMENT OBLIGATION CLAUSE(S)
Ensure that up to date information is available on web site on R&D plan; priorities used to determine funding; desired outcomes, key activities and key achievements; and
key RDE and marketing activities that are being funded
4.3
Information in 4.3 not to include personal information (Privacy Act 1988), confidential information etc, or information that might damage AGRIFUTURES, the industry or the
national interest
4.4
Persons appointed to AgriFutures committees, panels etc to disclose any related pecuniary interests 4.5
Payment of funds
Pay within 30 days any amount invoiced to AGRIFUTURES by the C’th for expenses relevant to levy collection, administration etc 5.2
Provide invoice and evidence to C’th of R&D expenditure for matching funding; final claim for financial year to be supported by independent audit report 5.4-5.8
Application of the funds
Spend the funds in accordance with R&D plan, annual operation plan and guidelines 6.1
Spend funds on R&D only if consistent with functions and powers under the PIRD Act and if they relate to and are of benefit to the industry; and/or are for the benefit of
industry and for the Australian community generally
6.2
Spend funds on marketing only if activities relate to and are of benefit to the industry 6.3
Not use the funds to engage in agri-political activity or advocacy, e.g. act as industry representative body (IRB) 6.4
AgriFutures Australia | Independent performance review: final report
74 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
FUNDING AGREEMENT OBLIGATION CLAUSE(S)
Payments to declared representative organisation(s) for consultation to be made in accordance with section 15 of the PIRD Act and PGPA Act 6.5
Funds not to be spent on IRBs except for membership fees where this contributes to achievement of AgriFutures objects, or to acquire goods or services or to fund R&D or
marketing activities only if funding occurs in accordance with PGPA Act, C’th Grant Rules and Guidelines or C’th Procurement Rules, and funding arrangement includes
measures to allow performance assessment (latter to be provided to the C’th on request)
6.6
Seek consultation with C’th on any matter connected with the Act or Agreement if needed 6.7
Determine appropriate balanced portfolio through R&D plan and annual operational plan (AOP) and explain approach to this in R&D plan 6.8, 10.7
Contribute to the implementation of relevant industry and cross-sectoral strategies under the RD&E Framework 6.9, 9.1
Provide feedback on the outcomes of funding applications to all applicants 6.10
Management of the funds
Establish appropriate accounting systems, procedures and controls in accordance with PGPA Act including cost allocation policy 7.1
Extension of research
Carry out functions under section 11 of the PIRD Act, contribute to implementation of RD&E Framework strategies 9.1
Demonstrate that pathways to extension and adoption are incorporated into the planning and approval process 9.2, 10.7
AgriFutures Australia | Independent performance review: final report
75 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
FUNDING AGREEMENT OBLIGATION CLAUSE(S)
Planning
Develop and maintain a program framework to support planning, performance and accountability requirements under the PGPA Act (Chap 2, Part 2- 3) and this agreement
within 6 months of agreement date
10.1
Program framework to inform development of key planning and reporting documents and include specifications of planned outcomes (results, consequences and impacts).
Outcome statements to: be specific, focused and easily interpreted; identify intended outputs and level of achievement against intended outcomes being measurable;
specify target groups (where identifiable) for outcomes; specify programs, subprograms, key deliverables and activities; and be agreed by key stakeholders and C’th as
part of R&D plan development. Each program to have KPIs that provide an accurate and succinct story of performance, KPIs to be: in the R&D plan, strategic and linked to
planned outputs and outcomes; in the AOP, linked to deliverables; in the annual report, KPIs from R&D plan and AOP brought together to demonstrate how deliverables
advanced the outcomes; and clear, unambiguous, measurable and timebound. Program framework also to include expected total costs (direct and indirect) of each
program, and an evaluation framework
10.2
Evaluation framework to be developed within 6 months of agreement date, which must: support the program framework; ensure key performance-related information is
generated by the program framework and routinely collected and monitored; include structured plan for the systematic evaluation of the efficiency, effectiveness and impact
of key investments; and include a means of publishing and disseminating relevant R&D outcomes and outcomes of evaluations undertaken
10.3
Consult with C’th in preparing the evaluation plan, participate in any cross-RDC evaluation project relevant to AgriFutures, demonstrate commitment to provide adequate
expenditure for evaluation
10.4
Publish evaluation framework on web site within 30 days of adoption 10.5
Prepare R&D plan per sections 19-24 of the PIRD Act, ensure consistency with program framework, publish on web site within 30 days of approval by the Minister 10.6
AgriFutures Australia | Independent performance review: final report
76 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
FUNDING AGREEMENT OBLIGATION CLAUSE(S)
R&D plan to cover at least: assessment of operating environment including SWOT, current and future trends and implications; collaboration with other RDCs on priority
R&D issues; broad overview of priorities and outcomes from stakeholder consultation; consultation with industry and explanation on extent to which its priorities are
reflected in the plan; key strategies, objectives, investment priorities and outcomes; planned R&D and marketing activities; key deliverables; performance indicators; how
the R&D and marketing activities align with and give effect to the guidelines; extension, technology transfer and commercialisation; estimates of income and expenditure
over the life of the plan (R&D and marketing separately); and an explanatory statement on approach to balanced portfolio
10.7
In developing or varying the R&D plan, develop a consultation plan including C’th, the representative organisation and other stakeholders including other RDCs 10.8
For minor variations to the R&D plan, consult in accordance with section 24 of the PIRD Act but may seek C’th approval not to develop a consultation plan 10.9
Consultation plan to be agreed with C’th prior to commencement 10.10
Consultation plan to be published on web site prior to commencement 10.11
Prepare an AOP in accordance with section 25 of the PIRD Act, provide to C’th by 1 July each year 10.13, 10.14
AOP to set out how and to what extent R&D and marketing activities to be funded give effect to the R&D plan and its objectives and the guidelines; the key R&D and
marketing activities to be funded during the financial year under each program; key deliverables arising from the R&D and marketing activities planned; performance
indicators, timetables and milestones relating to the R&D and marketing activities and expenditure which enable the progress being made towards achieving planned
outcomes to be monitored and reported upon; and statement on how AGRIFUTURES intends to implement and operationalise balanced portfolio appropriate to the sector
for the year
10.14
Submit all AOPs and material variations or updates to C’th within 30 days of adoption by AgriFutures 10.15
AgriFutures Australia | Independent performance review: final report
77 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
FUNDING AGREEMENT OBLIGATION CLAUSE(S)
Develop, maintain and implement risk management and internal control systems consistent with the PGPA Act, including fraud control plan, risk management plan and
intellectual property (IP) management plan
10.17
Review the IP management plan at intervals of no more than four years 10.18
Provide fraud control, risk management and IP management plans or amendments to the C’th within 30 days of Board approval 10.19
Reports
Provide to the C’th a compliance assurance report regarding compliance with obligations under the PIRD Act and the agreement during the relevant financial year 11.1
Compliance audit report to include statement from independent auditor providing opinion on whether AgriFutures has complied with clauses 6 and 7 of the agreement
during the financial year, which must be prepared in accordance with Australian Auditing and Assurance Standards; include statement that AGRIFUTURES has complied
with clause 6.6 and that accounting systems processes and controls comply with 7.1; include a review of amounts spent on R&D and marketing and verify claims made for
matching R&D funding are consistent; indicating any limitations to the report; and indicating any incidences of non-compliance and assessing and reporting on the impact
of those incidences
11.2
Compliance assurance report to also include certification from the Board, signed by Chair and Executive Director certifying that in the Board’s opinion AgriFutures has
materially complied with its obligations under the PIRD Act and the agreement during the relevant financial year, or has not, with explanation of non-compliances
11.3
Compliance assurance report to also include statement that it has been prepared for the C’th for purposes of the agreement and acknowledgement that it will be relied
upon by the C’th
11.4
Compliance assurance report need not include an opinion on whether the funds have been applied for the benefit of industry, or have been spent in a proper manner or on
advocacy or agri-political activities
11.5
AgriFutures Australia | Independent performance review: final report
78 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
FUNDING AGREEMENT OBLIGATION CLAUSE(S)
If the C’th requests an audit report or opinion on compliance, comply with C’th request at AgriFutures expense 11.6-11.7
Prepare annual report in accordance with the PIRD Act, section 46 of the PGPA Act and the agreement – additional information required only by the agreement may be
provided to the C’th separately
11.8-11.9
Include in the annual report: a report on contribution to implementation of relevant industry and cross-sectoral strategies under the RD&E Framework; rationale for the mix
of projects in balanced portfolio; research extension activities; collaboration with industry and other research providers; sources of income allowing for separate
identification of R&D and C’th matching payments and any other forms of income and, if applicable marketing payments and voluntary contributions; the full cost of R&D
and marketing programs with costs allocated in accordance with the cost allocation policy; progress made in implementing R&D Plans, including progress against KPIs and
achievement of key deliverables and associated outcomes specified in the plans; an assessment of the efficiency and effectiveness of investments; progress in
implementing the guidelines; consultation with the representative organisation on R&D plan and AOPs, R&D and extension and marketing activities; and other relevant
matters notified by the C’th
11.10
Provide to the C’th any other report requested within specified timeframe and in consultation with the C’th on any action required 11.11-11.12
Review of performance / performance management
Complete a performance review 6 months before expiry of agreement; engage independent organisation to undertake and report on review; agree terms of reference of the
review 6 months prior to commencement with the C’th; provide the C’th with the draft review report and any Board comments within 7 days of the Board considering the
draft; provide the C’th with the final review report within 14 days of acceptance by the Board; develop a response to final review report and proposed implementation plan
for recommendations within 3 months of Board acceptance; provide response to the C’th within 30 days of Board’s acceptance of response; report to the C’th progress in
implementing the review recommendations at 6-monthly meetings; and publish performance review report and response on website
12.1
Independent organisation engaged to do review no to have carried out corporate governance or related activities for AgriFutures within term of the agreement 12.2
AgriFutures Australia | Independent performance review: final report
79 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
FUNDING AGREEMENT OBLIGATION CLAUSE(S)
Terms of reference for review to take into account the performance of AgriFutures in meeting its obligations under the PIRD Act and agreement; development and
implementation of R&D plan, AOP, risk management, fraud control and IP management plans and effectiveness in meeting priorities, targets and budgets set out in the
plans; efficiency with which plans were carried out; efficiency and effectiveness of AgriFutures investments; delivery of benefits to industry foreshadowed in the plans and
assessment of the degree to which investments have met the needs of the industry; and any other matters required by the Minister
12.3
Cooperate with and respond to any other review of AgriFutures undertaken by the C’th 13.1-13.4
Consultations
Chair or other Board nominee to meet with the C’th at no more than 6-monthly intervals from agreement date or at any other requested time on reasonable notice to brief
the C’th on performance of functions including progress on implementing the AOP and R&D plan; progress on implementation of relevant RD&E Framework strategies;
consultation with other RDCs and representative organisation; measures taken to enhance corporate governance; progress in developing and implementing the evaluation
framework; progress on implementing the recommendations from the most recent performance review; and development and implementation of additional systems,
processes and controls to meet the agreement (7.1)
14.1
Ensure that section 29 of the PIRD Act is complied with and meet with representative organisation at not more than 6-monthly intervals to review industry priorities for R&D
and marketing investments, including regional equity considerations; and report on performance against the R&D plan and AOP
14.2
Directors to notify the C’th if any proposed change to the guidelines by the Minister would require the directors to act, or omit to act, in a manner that may breach any duty
owed by the directors to any person, cause the contravention of any law, be likely to prejudice commercial activities carried on by or on behalf of AGRIFUTURES, or be
contrary to the public interest
14.4-14.6
Access to records and use of information
Grant access to premises or data, accounts etc if required by the Minister or the Finance Minister under the PGPA Act 15.1-15.4
AgriFutures Australia | Independent performance review: final report
80 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
FUNDING AGREEMENT OBLIGATION CLAUSE(S)
Use any confidential information provided for proper purpose and not disclose 15.5-15.6
Grant the C’th a permanent, irrevocable, royalty-free worldwide non-exclusive licence to use, reproduce, modify, adapt, distribute, communicate and publish all or part of
any report or plan provided to the C’th excluding any confidential information and any material, including any image or text, identified by AgriFutures as being material in
which a third party owns the copyright
15.8
Notification of significant issues
In addition to the duties under the PGPA Act, give the C’th reasonable notice of any significant issues that may affect or have affected AgriFutures or any of its subsidiaries 16.1
Acknowledgement of funding
Ensure all significant publications and publicity acknowledge the provision of Australian Government funding where applicable 17.1
AgriFutures Australia | Independent performance review: final report
81 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
APPENDIX 3: OBLIGATIONS OF AGRIFUTURES UNDER THE PIRD ACT
The following table provides a listing of AgriFutures obligations under the its PIRD Act. In each case, this review found that:
There was positive evidence of fulfilment of the obligation;
There was indirect evidence that the obligation had been fulfilled, for example the advice of DAWR representatives; or
The obligation was not relevant during the review period.
PIRD ACT OBLIGATION SECTION
Part 2 – Research and Development Corporations
Division 1 - Establishment, functions and powers of Research and Development Corporations
R&D Corporation is a body corporate etc. 10
Functions: investigate etc R&D requirements; prepare, review etc R&D plan; prepare AOP; coordinate and fund R&D; monitor, evaluate and report activities; assess and
report impacts; disseminate and commercialise R&D results; carry out marketing if applicable; do anything else conferred by PIRD or other Acts
11
Powers: enter into agreements, manage IP, acquire property etc 12
Agreements for carrying out R&D activities and marketing activities by other persons: provisions that may be included in agreements 13
Agreements for carrying out R&D activities and marketing activities with other persons: provisions that may be included in agreements 14
AgriFutures Australia | Independent performance review: final report
82 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PIRD ACT OBLIGATION SECTION
Consultations with persons and organisations: provisions to consult with industry persons and bodies, meet travel expenses incurred by consultees and other expenses
subject to Ministerial guidelines
15
Division 2 – Constitution of Research and Development Corporations
Constitution: RDC comprises Chair, Executive Director, 5-7 other directors as determined by the Minister; vacancies do not affect exercise of powers of RDC 16
Appointment of directors: appointed by Minister from nominations of Selection Committee; appointment not invalid because of defect or irregularity in nomination or
appointment
17
Members of executive of representative organisation not eligible for appointment etc 18
Division 3—R&D plans and annual operational plans
R&D Plans: must prepare, to include statement of objectives and priorities for the period; first plan for 4 years 9 months to 5 years 3 months to align with FY; subsequent
plans for 5 years
19
Approval of R&D plans: to be submitted to the Minister no later than 2 months before intended commencement unless otherwise allowed; Minister may seek revisions, RDC
must consider and respond; plans to be submitted to President of representative organisations at same time as Minister; RDC to notify rep orgs of approval within 1 month;
plan commences day of approval or commencement date, whichever later
20
Variation of R&D plans: RDC to review plan as soon as practicable after each 30 June following commencement and consider whether variation needed; consider any
Ministerial request for variation; RDC may vary the plan, must provide Minister with explanation, Minister may approve/reject with reasons; where variation approved, RDC
must notify Presidents of rep orgs within 1 month
21
AgriFutures Australia | Independent performance review: final report
83 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PIRD ACT OBLIGATION SECTION
Approval for varied R&D plans to run for 4 years from next 1 July: if variation requested/approved, RDC may request Minister for plan to be in effect for 4 years from following
1 July
22
When variations of R&D plans take effect: July 1 under s22 unless otherwise specified, otherwise day of approval 23
Consultation: before requesting a variation, RDC must consult with Minister, rep orgs and others as considered appropriate 24
Annual operational plans: must prepare for each FY; plan must specify broad groupings of R&D and marketing activities; describe how and to what extent these activities will
give effect to R&D plan; provide an estimate of total amounts to be spent on each activity grouping and other costs
25
Commencement of annual operational plan etc.: first day of period to which plan relates; must be provided to Minister and rep orgs before commencement 26
Compliance with R&D plans and annual operational plans: must ensure performance of functions and exercise of powers consistent with current R&D and annual operational
plan
27
Application of the Public Governance, Performance and Accountability Act 2013: s35 (operational plans) does not apply to RDCs 27A
Division 4 – Accountability
Annual report: to be prepared by directors and given to Minister under s46 of PGPA Act to include: (a) particulars of R&D and marketing activities funded; the amount spent
on each activity; the impact of the activities on the industry(ies); revisions to the R&D plan during the period; agreements entered into under s13 or s14 and activities in
relation to these; activities relating to patents etc; activities of any company in which RDC has an interest or relating to the formation of a company; and significant
acquisitions / disposals of property; (b) assessment of extent of achievement of objectives of R&D plan and implementation of annual operational plan; (c) assessment of the
extent to which RDC has met objects of PIRD Act; for RDCs prescribed in the regulations, particulars of sources and expenditure of funds including by commodity or region
and from transfer of assets etc.
28
AgriFutures Australia | Independent performance review: final report
84 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PIRD ACT OBLIGATION SECTION
Accountability to representative organisations: (not applicable to RDCs to which Division 7 applies, as specified in regulations) Chair must, as soon as practicable after
submission to Minister, provide annual report to rep orgs and arrange to attend each rep org’s annual conference or meeting of executive to enable annual report to be
considered; Chair to deliver address on activities during report period and intended for next period, and for prescribed industries e.g. grain, particulars of expenditure by
commodity, region etc, transfer of assets etc; Chair to take questions
29
Division 5 – Finance
Payments to R&D Corporation – general: (only applicable to R&D activities) levy funds collected to be paid to RDC, also amounts equal to one-half of amounts required to be
spent by RDC under s33 (not 33(1)(d)) – from Consolidated Revenue Fund; also to RDCs with no levy attached, amounts as appropriated by Parliament; this section not
applicable to AgriFutures
30
Government matching payments not to exceed levy and certain other payments 31
Retention limit for Commonwealth’s matching payments: payments exceeding GVP to be refunded or withheld 32
Expenditure of money of R&D Corporations: only on broad groupings of R&D activities in annual operational plan, on expenses and liabilities incurred as part of its business,
for payments to directors and committee members, to the C’th as required elsewhere in the Act, for expenses relating to a selection committee, or for other authorised
payments; RDC liable for costs of selection committee; after 230/6/15, only with a funding agreement in place; funding agreement to be published on website
33
R&D money must not be spent on marketing 33A
Commonwealth to be paid levy expenses from R&D Corporations: RDC pays for levies collection and administration 34
Commonwealth to be reimbursed for refunds of levy: reimbursement by RDC 35
AgriFutures Australia | Independent performance review: final report
85 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PIRD ACT OBLIGATION SECTION
Transfers of money where levies redirected: where levy is moved from one RDC to another, provisions for transfers 36
Payment of amounts of levy where levies redirected: as for s36, with respect to levy amounts owed by the C’th to the RDC(s) 37
Payment of matching contributions where levies redirected: as for s36, with respect to matching amounts owed by the C’th to the RDC(s) 38
Treatment of amounts received, after levies redirected, as a result of earlier expenditure 39
Separate accounting records: regulations may require RDC to keep separate accounting records of funding of specified classes of activities, and specify amounts to be
credited/debited and manner of calculation
40
Borrowing from Commonwealth: Finance Minister may lend to RDC 41
Borrowing from persons other than the Commonwealth: RDC may borrow from other person with Finance Minister’s approval, including foreign currency 42
Guarantee of borrowing: C’th may guarantee RDC borrowing under s42 43
Borrowing not otherwise permitted 44
R&D Corporations may give security: over its assets for the performance of obligations under s41 or s42 or payment to C’th of amounts relating to s43 45
Liability to taxation: RDC subject to C’th taxation except income tax; not subject to State/Territory tax unless specified by State/Territory or regulations; subject to stamp duty
of State/Territory
46
Delegation by Finance Minister: powers may be delegated 46A
AgriFutures Australia | Independent performance review: final report
86 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PIRD ACT OBLIGATION SECTION
Division 6 – Meetings of Research and Development Corporations
Times and places of meetings: must hold such meetings as necessary; Chair may call meeting any time; Chair must call meeting if majority of directors request 47
Presiding at meetings: Chair to preside at all meetings at which present; if Chair not present, Deputy Chair must preside if present; otherwise directors to appoint one of their
number to preside
48
Quorum: majority 49
Voting at meetings: question decided by majority; presiding person has deliberative vote and casting vote if necessary 50
Conduct of meetings: RDC to regulate as appropriate, telephone or other participation allowed 51
Resolution without meetings: can occur where majority of directors indicate consent 52
Minutes must be kept 53
Persons may be invited to attend meetings 55
Division 7 – Annual general meetings
Application of this Division: to RDCs with levies attached and declared applicable by regulations 56
List of levy payers: each FY RDC must list persons known to have become liable to pay a levy, within the immediately preceding FY or 3 months after it; must complete this
list between zero and 30 days after day applications must be received by RDC for AGM; RDC not to use list for any other purpose
57
AgriFutures Australia | Independent performance review: final report
87 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PIRD ACT OBLIGATION SECTION
R&D Corporation to convene annual general meetings: where required by rep org, each FY; no longer than 15 months between AGMs 58
Notice of the convening of an annual general meeting: publish notice in Gazette not later than 70 days before AGM, specifying day, time and place of meetings and date (no
earlier than 14 days after publication date) by which applications to be entered on levy list for the FY must be received; copies of notice to be provided to rep orgs
59
Purpose of annual general meeting: for levy payers to consider most recent annual report; receive address by Chair concerning RDC performance during FY and outlook for
industry in next FY; question directors; debate and vote upon motions including no confidence
60
Regulations may provide for notifying RDC of terms of motions to be moved at AGM; notifying RDC’s eligible levy payers of matters relating to AGM; appointment of proxies;
methods of passing motions; method of determining votes; ensuring confidentiality of levy liability in voting
61
AGM may be attended by directors, eligible levy payers, members of rep orgs, invitees of the RDC, employees and consultants as determined by Chair; Chair must preside;
eligible levy payers entitled to vote; record of proceedings to be kept
62
Where motion of no confidence moved at AGM, chair to be replaced by RDC employee during vote; where no confidence in RDC passed, directors’ positions vacated and
Minister to terminate within one month and appoint alternatives; terminated directors may be reappointed
63
RDC to notify rep orgs of all motions passed at AGM within one month 64
Division 8 – Provisions relating to directors other than Executive Directors
Director defined as other than Executive Director 65
Director appointed according to instrument of appointment, term not exceeding 3 years; another person may be appointed to the end of term where a director ceases to hold
office
66
AgriFutures Australia | Independent performance review: final report
88 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PIRD ACT OBLIGATION SECTION
Directors hold office on part-time basis 67
Director remuneration determined by Remuneration Tribunal; allowances as prescribed 68
Director holds office on terms and conditions set out by Minister 69
Director must not engage in paid employment that creates conflict of interest 70
Minister may grant leave of absence to Chair; Chair may grant to director 71
Director may resign by written notice to Minister 72
Minister may terminate appointment of Chair or director for misbehaviour, incapacity, bankruptcy etc (also under the PGPA Act); may terminate appointment of Chair or
director if absent for 3 consecutive meetings without leave
73
Minister must appoint a director as Deputy Chair in consultation with Chair; appointment may be terminated etc; acts for Chair when required and has same powers 74
Division 9 – Executive Director
Each RDC to have an ED 75
ED to conduct the affairs of the RDC as directed by the RDC 76
ED to be appointed by the RDC; cannot be Chair or nominated director or executive of rep org; appointment of ED is not invalid because of irregularity in connection with
appointment
77
AgriFutures Australia | Independent performance review: final report
89 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PIRD ACT OBLIGATION SECTION
ED appointed from day in instrument of appointment and holds office at RDC’s pleasure 78
ED full-time or part-time 79
ED not to engage in other paid employment of full-time, other paid employment that presents a conflict if part-time 80
ED appointed on terms and conditions as set by RDC 81
Chair may grant leave to ED on terms and conditions as set by the RDC 82
ED may resign by written notice to Chair 83
RDC may appoint person other than director to act as ED during absence 85
ED or acting ED not to be present during deliberations regarding ED appointment, terms and conditions etc 86
Division 10 – Employees and consultants
RDC may engage employees as required; remuneration not to exceed that of ED 87
RDC may engage consultants as required 88
Division 11 – Miscellaneous
RDC may establish committees’ members to be remunerated as determined by Remuneration Tribunal or as prescribed; allowances to be paid as prescribed 89
AgriFutures Australia | Independent performance review: final report
90 | Ball, Pattinson, Wilcox and Williams | 15 April 2019
PIRD ACT OBLIGATION SECTION
RDC may by writing under common seal delegate powers under the Act (except s.81) to a committee, director or employee, subject to the directions of the RDC 90
ED may by writing delegate powers under the Act (except s.81) to an employee, subject to the directions of the ED 91