The Rural Research and Development Funding Model

The 15 rural RDCs are a unique partnership between the Australian Government and the Agriculture, Forestry and Fisheries (AFF) industries.

Their focus is on expanding Australia’s rural R&D effort, improving industry effectiveness and efficiency by investing in high priority areas, and encouraging uptake of research results to improve international competitiveness and sustainability.

The RDCs commission and manage targeted research and foster uptake and adoption based on the identified needs and priorities of both industry and the Australian Government.

The Australian Government provides dollar for dollar matching of industry expenditure on R&D up to a limit of 0.5 percent of each industry’s Gross Value of Production (GVP).

The RDC model today is a mix of statutory and industry-owned companies. The industry-owned R&D companies are independent corporate entities with expertise-based boards. They were formed in response to an industry desire to have more control over their affairs and increased flexibility, industry representation and to foster market driven R&D that will be widely adopted by industry.

This short video explains how the co-investment model of industry and government funding is the most efficient and effective means of managing the Australian Government’s investment in rural research and development.

Advantages of the RDC Model

RDCs commission agricultural R&D on a competitive basis amongst public and private providers using funds from levies on production and matching Commonwealth grants.

The model has given rural industry the vehicle to negotiate new standards for investment, focussed on triple bottom line outcomes.

RDCs can fund R&D into either production (on-farm) or processing (off-farm) issues and are expected to fund portfolios of projects that have a mix of both public good and industry good components given the taxpayer contributions. The RDCs engage with a diversity of stakeholders in a shared vision of what the future can be, which is updated in 5 year plans and reinforced with each of the annual operating plans.

The RDC model allows for a targeted approach to R&D fund allocation by industry, where those funds are a mixture of government and industry contributions. Further, the model encourages accountability, allowing levy payers to contribute to RDC strategies including the amount of the levy collected.