McCLUSKEY, Ms Su, Interim Chief Executive, National Farmers' Federation RAYSON, Mr Zac, Senior Policy Officer, Rural Affairs, National Farmers' Federation [14:14] CHAIR: Good afternoon. I understand that information on parliamentary privilege and the protection of witnesses giving evidence to Senate committees has been provided to you. I now invite you to make a short opening statement if you have one, and, at the conclusion of any remarks, I'll invite senators to ask any questions. Ms McCluskey : Thank you for the opportunity to appear today. I should note that, in addition to being the Interim Chief Executive of the National Farmers' Federation, I'm also a member of the CSIRO Agriculture and Food Advisory Group. I'm the Chair of the Crawford Fund for Food Security and a former CEO of the council of RDCs and the Regional Australia Institute. So I bring a wide range of perspectives on the importance of public-good R&D. And I'm also a farmer. Today I really want to focus on the importance of CSIRO's continued contribution to Australian agriculture. Australian agriculture has always met its greatest challenges through transformative innovation, and, historically, we've got the CSIRO to thank for many of these solutions—for example, GM cotton, which was invented by the CSIRO and revolutionised the industry in Australia. Compared to 25 years ago, it now takes 50 per cent less water and 96 per cent less insecticides per hectare, as well as less land, to grow a bale of cotton. As a farmer myself, I think of rabbit biocontrol, such as calicivirus, which I saw released on my own farm and which made a huge impact on reducing the number of rabbits, which were completely destroying my land. Aerogard is another great initiative by CSIRO. Once again, it's a staple on farm, after the hat and the sunscreen. And dung beetles, something else that I get to see every day, are a great innovation and really add to the benefits on farm. They're just a few examples, but the CSIRO really delivers time and time again for Australian agriculture. I have to say in my previous role as the Special Representative for Australian Agriculture, I was really proud to talk about these great Australian agricultural innovations globally, and we would just get so much of a response. In that regard, of course, Australian agriculture not being subsidised, unlike many other countries around the world, relies on innovation that can drive productivity. That is really key. But the reality is that our capacity to respond to the challenges and our capacity to innovate are really under great pressure. We know that productivity growth in Australia has slowed considerably. I think agriculture was one of the few industry sectors that has about 0.7 per cent growth in productivity, but it really has slowed. And its productivity growth that we really need now more than ever, and not just for agriculture but indeed for the whole country. Public investments, at the same time, in R&D—and that's what underpins agricultural innovation and productivity growth—have been stalling. In fact, we know that public expenditure on research is dropping by almost three per cent a year for the Australian government and about two per cent for state governments. And that's quite unbelievable when you think that, for every dollar invested in agriculture R&D, there's about an $8 return. In fact, when I was involved with the RDCs in about 2013, I think it was about $11. And that's the direct benefit. Overlay that with the flow-on benefits for communities, the economy and the society at large, the impacts that you get from R&D are significant. For Australian agriculture to succeed, we really need to think about what the next gen challenges pose, particularly for food security, for climate adaptation and for productivity. We need everyone in the system to be playing their part. When I think of the current conflicts and, believe me, when it comes to things such as fuel and fertiliser supply, there's nothing that makes this so much front of mind than investing today. It really helps to shore up our capacity in the future, sovereign capability, and futureproof Australia against future shocks, particularly when we're seeing what's happening at the moment—the impact that can have on food security, the environment and our economy. We're really fortunate in Australia to have a world-leading RDC system. We've got great universities and private companies that invest, but there's no doubt that the CSIRO has played and must continue to play their unique role and their vital role in the agriculture innovation ecosystem. They've got irreplaceable sovereign facilities like the Australian Centre for Disease Preparedness; a huge amount of institutional knowledge; a remit to deliver on blue-sky R&D, which is particularly important; and foundational research. So we really do urge the government to not just deliver additional sustainable funding but also stop job losses in areas that are really crucial to the success of agriculture. Research units like agriculture and food, health and biosecurity and the environment are absolutely critical for Australia. We need to keep innovating. We need to maintain the shared commitment from industry and government to drive R&D, and we really do need a well-funded CSIRO that can continue to support Australian agriculture. CHAIR: Senator Darmanin. Senator DARMANIN: I wanted to ask you particularly about biosecurity work and the work at the Australian Centre for Disease Preparedness. You did make a couple of comments about why it's so important for your members, but I wonder if there's anything else that you want to say about that. Ms McCluskey: In relation to biosecurity, Australia is, of course, an island nation, so biosecurity is absolutely critical for us, and the amount of R&D and effort that goes in, not just in country in Australia but in other countries to stop incursions actually leaving those countries, is critically important. I've certainly had a lot to do with both the CSIRO and the RDCs in country, in countries such as Indonesia, and with the amount of work that is done there to help the capacity building in country. It really is a buffer against those diseases being able to come into Australia. From a biosecurity perspective, it's absolutely critical that we can continue to make sure that that is a priority for us. Zac, is there anything you'd like to add there? Mr Rayson : Yes. I've been to the ACDP in Geelong myself, and I view it as perhaps a perfect example of the kind of critical sovereign infrastructure that we need to protect our biosecurity as well as other things like trade and animal and human health. The ACDP has played an incredible role throughout the years for Australian agriculture and the community at large. I think about, firstly, the discovery of the Hendra virus as well as the development of the vaccine. It also has a really unique remit in that the capabilities there can be transferred into human health as well. During COVID it did vaccine trials as well as diagnosis for COVID. It's been involved in benefiting not just Australia but also our regional partners—outbreaks of avian influenza and the Japanese encephalitis virus—and it's done global outbreaks of Ebola, SARS, Nipah virus, among others. We're really concerned that such an important piece of sovereign infrastructure has for many years been underfunded. The costs of operating the ACDP have gone up by about 50 per cent over the last decade. At the same time, it's 40 years old now with an expected life of 100 years. I'm sure you'll know that the part-life refit project is a significant capital investment. We fully support both stages, both the first stage which is $372 million and fully funded by the CSIRO and the upcoming stage 2, which is expected to be finished in about 2032, I believe. We fully support that both stages of the part-life refit be funded and completed in full. Senator DARMANIN: I was going to ask you about upgrades to the facility, so you have answered that question already for me. Thank you. I have maybe just one final one. To follow on, Ms McCluskey, you talked about working country in terms of disease outbreaks and the like. What role does the ACDP play in working with neighbouring countries and trade partners in the region when disease outbreaks occur? Ms McCluskey : I'll probably talk more generally and then see if Zac can respond quite specifically. When we think of the number of incursions that occur, it is absolutely critical, as I said earlier, that we can stop the incursions coming here. Not only that, but, from a trade and market access perspective, it is critically important. Of course, given over 70 per cent of our agricultural produce is exported, it is really vital. Particularly for those countries in South-East Asia where regional security is very important, having those sort of relationships is absolutely critical too in terms of how we can continue to operate. I'll pass to Zac to go specifically to the centre's role in relation to disease preparedness. Mr Rayson : There are a couple of points that are key here. The ACDP provides diagnostic animal export testing, which proves our freedom from disease to continue our trade and market access. On a more general level, it does an incredible amount of research into animal diseases—particularly zoonotic diseases, which are diseases that pass from animals to humans, such as avian influenza. It's got a very unique ability to provide that research because of the size of its facilities. I think of physical containment levels 3 and 4, which are significantly biosecure or biosafe facilities. It's got the largest PCL level 3 and 4 facilities in Australia—including the large animal facility, which can handle adult cattle as well as sheep and things like that. The capability to do research there is unmatched anywhere in Australia. Indeed, there are very few of these facilities anywhere in the world. Senator DARMANIN: Thank you. CHAIR: Senator Whish-Wilson. Senator WHISH-WILSON: Can I start by asking specifically about the Environment Research Unit, which you outlined on page 10 and talked about several times in your summary. You mentioned in your submission that you understand the Environment Research Unit is facing exceptional resourcing and funding pressures. Do you have any insights as to why that particular unit is facing a larger percentage of job cuts than other units? Mr Rayson : I can't speak to the decisions of CSIRO management. We are concerned about not just the cuts to the research unit but the cuts to those three research units that Su mentioned in her opening statement. With the Environment Research Unit, we expect from what we have heard publicly that up to 130 to 150 positions may be cut—so up to 21 per cent of the workforce. We're concerned about the health and biosecurity unit as well; up to 110 positions, or almost a third of the workforce, are facing cuts. As well, there is the ag and food unit; 45 to 55 positions have been flagged to be cut. You also have to put that into the context of the last two years, where there have already been significant job cuts in those three units—around 30 staff in the ag and food research unit in the last 18 months, and around 43 staff in the health and biosecurity units. That's part of the 818 jobs that you've heard about today. Senator WHISH-WILSON: Land and water management, climate adaptation and mitigation, drought and natural disasters, ecosystems and biosecurity—why are those particular issues important to the NFF? Ms McCluskey : I'll talk passionately about this. They're critically important. Australian farmers farm sustainably; indeed, if we didn't farm sustainably we wouldn't be farming and we wouldn't be viable. For us, it's critical that we are able to look after the land, look after the water, be stewards of the land and look after our livestock and our crops. Indeed, that whole life cycle that operates on the land is part of farming sustainably. We have an absolute commitment to ensuring we look after the environment. It is embedded in the Australian Agricultural Sustainability Framework that the NFF not only has been part of developing but continues to articulate as being a world-leading piece of work around Australian agriculture and sustainability—and underneath that are industry specific sustainability frameworks. For us, it is absolutely critically important that we continue to be focused on climate adaptability, resilience, looking after the environment, biosecurity and what this means in terms of natural capital. Mr Rayson : There are a few specific areas of the Environment Research Unit that I might call out—areas such as the National Soil Monitoring Program or the National Adaptation Plan. CSIRO has also contributed to a number of cooperative research centres, CRCs. Particularly relevant to this is the Zero Net Emissions Agriculture CRC. More broadly, CSIRO has a great level of institutional knowledge and produces a wide range of data and research that we're relying on to make decisions about the future of agriculture—climate risk modelling, vulnerability, things that we require to make informed decisions about climate adaptation. There is a real risk that we are making uninformed decisions if we lose the data and modelling that underpins climate adaptation analysis. Senator WHISH-WILSON: Just to be clear, when we're talking about farmers, we're talking about businesses, aren't we? We're talking about small businesses through to larger businesses. I think what often gets lost in this debate is that, when we're talking about public-good science like climate science, it is critically important in the long run, in many instances, for businesses. Is that the case with farming? Ms McCluskey : Absolutely. Carrying on a business of primary production is farming as a business. We do it not just because we love the land and love working on the land but because it is a business, and it's how we can remain viable. Part of that is making sure we can look after the land. Mr Rayson : Su mentioned, briefly, the Australian Agricultural Sustainability Framework, which is work that the NFF has been leading. I just want to mention that the CSIRO have been engaged as part of the project. They delivered a critical portion of that project, which was the Data Ecosystem Project, which looked at the way agricultural data is being used for environmental and sustainability purposes—looking at data-sharing arrangements and the kind of data that farms are producing, and how they're being used. The CSIRO did a fantastic job on delivering that project as part of the broader AASF project. Ms McCluskey : That data is critical because it underpins and provides the evidence under which our claims to agricultural sustainability can be proven. Senator WHISH-WILSON: Looking at the RDCs, the levy system in Australia is quite unique. Farmers, across a lot of industries, provide their own funds going into research. Can you explain the interactions between RDCs and CSIRO, who's a publicly funded science institution. Someone might say: 'Shouldn't farmers just be using the RDC levy money to do this themselves? Why do they need CSIRO?' Can you, in layman's terms, give us an update on that. Ms McCluskey : The RDC model is a matching model with industry levies—it's matched by government money—driven by industry priorities and very much at the applied end. It is what will work in practice on the ground. At the same time, we need to undertake blue-sky research; that is something the CSIRO can look to do. While the RDCs can have a role there, given the way that the RDC model operates it is driven mostly by the applied end of research and development. If we did not have the CSIRO working on these long-term, blue-sky, game-changing, future-thinking types of R&D that are going to futureproof us not just decades but centuries into the future, we'd have a big gap—and we see a gap now, and that gap is only going to grow. Unfortunately, as we're seeing with some of the things we could have been doing 10 or 15 years ago, in relation to sovereign capability and what we're seeing with the conflict now—we don't want to see this come back to bite us in another 10 to 15 years. Mr Rayson : There are a couple of things that RDCs can not do alone on an industry or commodity-by-commodity basis that CSIRO can do. CSIRO has demonstrated a strong aptitude for systems thinking—for example, its Ag2050 project, which envisions what agriculture in Australia could or perhaps should look like in 2050. They've also done some Food System Horizons work—a project with the University of Queensland, I believe. There's the systems-thinking part. There's, of course, the foundational research that Su has mentioned, but I wanted to step back a little bit and talk about the way in which RDCs work with the CSIRO. Senator WHISH-WILSON: Please do. Mr Rayson : There are a lot of collaborative projects that are co-funded. There is also CSIRO as a research provider. Our RDCs are purchasers of research. They acquire research, and there have been a couple of challenges with this over time, which I might point out are a symptom of decades of underfunding of the CSIRO. You've heard earlier today that CSIRO has been asking co-contributors for research projects to fund a larger proportion of that project than they have in the past. Previously—and this is not just with CSIRO but includes some universities—RDCs would be asked to front up 50 per cent of a project's cost. Increasingly, that's shifting more towards 75 per cent of a project's cost. Because of CSIRO's decreasing willingness or financial capability to co-invest in these projects, many projects aren't happening. That's the co-investment of projects. There's a similar thing happening in some areas where CSIRO is operating as the research provider and is no longer offering competitive quotes for the provision of some research services. There are a couple of concerns there. Senator WHISH-WILSON: I actually wanted to ask you about that point about the competitive quotes. I read that in the submission. Is that because you think they don't necessarily want the business, or is that because they're being forced to seek more revenue to meet their external funding targets internally? Ms McCluskey : We can only make assumptions. We don't know for sure, but it is a concern for us. Mr Rayson : But we do know that the cost of doing research has grown significantly over the past 10 to 20 years. The equipment required, the facilities and staffing costs have all risen. All actors in the agricultural innovation ecosystem are under increasing strain, not just the CSIRO. Senator WHISH-WILSON: You make it really clear that no other actor can replace CSIRO's unique remit and output. Is that the clear message from today? Ms McCluskey : Yes, it is. In the absence of that, I can't see that there is any one player that could fill that gap. We do have this unique model between the RDCs and with CSIRO. It is something that has served Australia extremely well, Australian agriculture in particular. It is something that we are very keen to see continue, and that is why we are so concerned about the reduction in funding to the CSIRO. Senator WHISH-WILSON: You use the term 'blue-sky research' several times in your submission. You were just talking about 50-year projects. Are those long-term projects the kinds of things that would be difficult to do on a purely commercial basis? Mr Rayson : Yes, that's exactly right—and also on a commercial basis divided by commodity, as our RDC levy-paying system is. We need research that is cross-commodity. There is a function for the RDCs in doing that. Greater collaboration is always a welcome thing, but there is certainly a strong role for public leadership in public good research. Ms McCluskey : And blue-sky research, by its very nature, has a higher risk level, so it is really important that we have capacity in an organisation that is able to look at those risks and mitigate them where necessary but be prepared to take them. Senator WHISH-WILSON: You raise, as a number of submitters have today, the impact on early and mid-career researchers in particular. You raise it in regard to the agricultural R&D system as well as the loss of specialist staff. Were you raising that more as a generic concern, or have you also had information from talking to the people you work with about their jobs being at risk? Mr Rayson : There are a couple of points here. The first is that CSIRO has been a breeding ground not just for what we would call scientists and researchers but for a wide variety of individuals in scientific fields who then end up perhaps working in different parts of the agricultural system. Entomologists, soil scientists, plant pathologists—CSIRO has had a long history of breeding experts who work across the private and public agricultural fields. We are concerned, more broadly, at the potential for a brain drain from Australia, the loss of a generation of promising young scientists. We've seen CSIRO hiring early- and mid-career researchers almost in fits and starts over the years. In 2022, there was the 'Impossible without you' campaign that hired 200 early- and mid-career researchers. Most of them were on two- and three-year contracts, and we've heard that the vast majority of those contracts weren't renewed or they weren't made permanent. With any job losses, and particularly to early- and mid-career researchers, you risk losing them to the ag innovation ecosystem. You risk losing them overseas or to different industries. That obviously has a negative impact on our continuing ability to innovate. Senator WHISH-WILSON: And, of course, if these job cuts do go ahead because the CSIRO doesn't get increased funding, which I know you've called for as well, it's one thing to go to the next election or the election after that to try and get these things restored—of course, the Greens would be very keen to work with you on that—but the damage will be done if these job cuts go ahead, no doubt, in terms of the loss of that skill and IP. CHAIR: I've just got a couple of questions. You mentioned productivity, and I'm interested in you sharing with me a little bit more. You've talked about disease, you've talked about pests, you've talked about droughts and floods. How impactful will it be, or how much of a shock will it be, if these cuts come in as we've heard today and, worse, without a proper transition plan and thinking behind the implications of these much more broadly than just within an organisation or to cut spending? Ms McCluskey : The impacts could vary from being something that you could actually deal with to absolutely devastating. If we look at a biosecurity incursion, for example, it would be absolutely devastating not just to Australian agriculture but to the economy and to our ability to have trade market access, and that could be quite long term. It's absolutely critical that, if there are going to be cuts, we are able to look at where those cuts will be, what then is compromised as part of that and what a transitional mechanism may be. I've had the privilege to see some of the research in action at the CSIRO and also get something of an insight into perhaps where some of the fractures may occur if the cuts do happen, and the impacts will be extremely significant. CHAIR: Give me examples for somebody living in a city who gets their milk from the fridge, or who gets their vegetables from the corner store, and gives no thought or regard at all to how that food got to where it got to before they hand over their hard-earned money to get it. Tell us: what are the implications of this from an agricultural primary production perspective? Mr Rayson : Perhaps you should start by reflecting on all of the things that that person at the store owes to the CSIRO for its contributions to agriculture already. I think of Aerogard, which started out as a person researching blowflies—flystrike in sheep—who then passed it on to the Australian military in World War II. When the Queen came to Australia, she wore Aerogard, and then it was given away to Mortein three days later for free. I think of GM cotton, which now makes up 99.5 per cent of cotton. CSIRO invented that. A hundred different strains of cotton have been created by CSIRO in the last 30 or 40 years. That's revolutionised that industry, so I'd be hoping that the person on the street would also be wearing that Australian cotton. I think, more broadly, CSIRO plays a role in so many different parts of the Australian agricultural system, from soil monitoring to mouse plagues to rabbit biocontrol. We need the next 10 years of rabbit biocontrol research locked in now because that's how long it takes to come up with the next effective biocontrol. CSIRO is researching all of these different and important parts of our biosecurity, ensuring our trade and market access. Importing biocontrols, in the sense of biological pesticides and insecticides, which no-one else can do, is something that CSIRO does through its facilities both at Black Mountain and in Brisbane. CSIRO's research touches every part of the agricultural system. We're not sure what these job cuts will specifically impact, what projects they will impact, so it's hard to quantify the full detriment that will face our industry and will also the consumer at the shops, but we are deeply concerned about what those impacts might be. Ms McCluskey: I'd just draw an analogy with what we're seeing currently in the fuel and fertiliser supply shortages and the impact that potentially can have on food supplies. We're already seeing that in some regions. If we have a biosecurity incursion it may mean that there might be a product impact. For example, if foot-in-mouth disease were to come in then that could have an impact on beef supplies and potentially on red meat supplies. It could also then have an impact on other food supplies. The consumer might not necessarily think about where it would be isolated to. To be able to protect what we have the privilege to have in Australia—which for most of us is access to clean, safe, healthy food—and to think that might be taken away from us, or even taken away from some communities, is a threat, and I think the risk of that is heightened in relation to these job cuts. Senator BARBARA POCOCK: I hope this isn't a silly question. I was listening carefully to your RDC story. What's the ballpark size of the RDC funding base? Ms McCluskey: They have around $500 million in levies that is matched by about $300 million in government funds. So around $800 million per annum is invested in agricultural R&D, and there are 15 different RDCs that go across different industries. Senator BARBARA POCOCK: I will just declare an interest: I have two nieces who are agronomists. One has been on the GRDC in South Australia; the other is doing research on drought resistant crops in the Mallee region, where I grew up. I'm a great admirer of the research effort, but I'm sitting here thinking that you're telling us that it's getting harder to put those dollars—CSIRO, because of the failure of its funding model, is looking for a greater proportion of that industry money, up to 75 per cent. So, yes, I see that limitation, but I'm also thinking about the ocean, the climate and all the other things where there is no RDC, there is no $500 million or $800 million being generated to put alongside that money. We have some healthy research projects out there that are industry based, conducted by RDCs and then in collaboration with CSIRO, which pulls the CSIRO over because there is money there that is a suite and it's sought by CSIRO. But when we look at climate and at public good for which there is no base beyond the tax base, clearly the tax base is the equivalent spot, what does that do to that? Do we need other sources of funding to make sure we get to those public goods that don't have that engine of levies? Ms McCluskey: Just for clarification, virtually all of the RDCs undertake some level of climate R&D or fund it. That's the important thing: the R&Ds do not undertake the research themselves; they are research funders. Senator BARBARA POCOCK: Of course. Ms McCluskey: That is why it's critical that there is something like the CSIRO that undertakes the research. And, as Zac has pointed out, it is very much a collaborative model, so it brings in universities and might bring in some private organisations where the research could be undertaken. With regard to oceans, there is some research done through the Fisheries RDC. The Fisheries RDC also have a public-good component there, so they look at the Indigenous aspect, for example. The important thing is—and it's one of the things that a lot of us have been working on—how we get a joined-up approach to this. That is for the Council of RDCs to talk about, so we're reducing any potential duplication in the system, but also more broadly for organisations like the CSIRO and the universities to talk about to make sure we can fully leverage it. And that is part of the role that the RDCs play as well—that is, when commissioning research, making sure that that research hasn't already been undertaken somewhere else or, indeed, seeing if you can actually co-invest with another project so you're getting leverage rather than having two projects that may have similar outcomes being done side by side. Senator BARBARA POCOCK: Just to push my point a bit here, I'm trying to look more broadly at the balance of blue sky and—of course, these levy funds should be spent on industry relevant and guided research. That's where the levy comes from, and they're looking for a productive outcome for the enterprise. But the blue-sky side, which you also say is very important for agriculture and food production and so on, has a funding base that is totally dependent on the tax base and doesn't have the fostering and growth that may come from leveraging RDC funds. Ms McCluskey: There is some blue-sky research that is undertaken, and it depends on the RDC as to how much they will be able to do it. For example, the GRDC, as you mentioned, has actually looked at some of this, and so have a number of the other RDCs. It is a challenge when you've got industry funding and you're looking at priorities for the industry. It's the same as when you look at the private sector investment in R&D. It's very difficult for SMEs to be able to invest directly, so you've got larger companies that have a better ability to do this. Once again, they're going to be focused on their own interest rather than the public good. The important thing, though, is that, if you did not have the CSIRO, who would actually do this? And, even if you reduce the funding, who is going to fill the gap? There is no-one to come in and fill the gap. Mr Rayson : The RDCs are increasingly being asked to fill the gaps already, which is due to decreasing public expenditure. Since 2005-06, federal government expenditure in ag research has gone down by 2.97 per cent each year; with state governments it's about two per cent per year. Largely they have been pulling out of extension activities, particularly when it comes to state governments. That is something where the RDCs have had to already plug a gap, so you can't continue to ask them to replace what is 20 years of decreasing federal expenditure into ag R&D. Senator BARBARA POCOCK: Thanks for your evidence. CHAIR: I'd like to thank the National Farmers' Federation for their evidence today..