Organic Agriculture in Australia - Research Levies and Expenditure

Summary

It is often claimed that the organic industry in Australia receives insufficient funding for research and development. Behind this claim lies the assumption that funding provided is less than the amount paid by organic farmers in obligatory research and development levies. But is this the case? How much do organic farmers contribute? And how much do they receive in return? The aim of this report is to quantify these issues.
The first issue - levies paid by organic farmers - was scrutinised and analysed with the help of the organic certification offices. These offices hold data pertaining to organic farms. The majority of farms, including those under organic management, pay levies for research and development (R&D), marketing, the National Residue Survey and animal health. This is either a certain percentage of the farm gate value of the product (for example, grains), or a set amount per unit of production (for example, per animal or per tonne of apples). Calculations of the total R&D levies paid for organic produce, sold both as organic and in the conventional market, amounted to $392,100 in 2000-2001.
Matching Commonwealth government funding effectively raised the organic R&D contribution to $656,200. Organic farmers paid an additional $240,000 in marketing levies, and $104,300 for the National Residue Survey and animal health levy.
The second issue – how much of the research levies is returned into research beneficial to organic farmers – was examined in less detail. However, some estimates were obtained. Direct expenditure on R&D on organic agriculture was around $450,000, the bulk of which came via contributions from the Rural Industries Research and Development Corporation (RIRDC), with a substantial contribution from the GRDC. Some funding was provided by Horticulture Australia Ltd (HAL). More indirect payments were generously calculated to amount to another $50,000, from funding from HAL and the Dairy Research and Development Corporation (DRDC), with possibly more contributions in the grain,meat and wool industries.
The conclusion is therefore that the total amount spent on R&D into organic agriculture in Australia falls well short of the $656,200, the amount collected from organic farmers and matched with Australian Commonwealth contributions.