Allocation of funds
In this section:
Investment approach
Figure 13 - Allocation of investment funds by line of business, 2007-08
Over the next five years, the GRDC's R&D investments will be driven by the corporate and LOB strategies set out in the Strategic R&D Plan. The three regional panels and the National Panel will ensure that the GRDC's investment portfolio reflects both growers’ priorities in each region and the Australian Government’s priorities.
The planned distribution of R&D investment funds between LOBs in the first year of the plan period is shown in Figure 13. It is expected that, during the plan period, the investment allocations by LOB will be adjusted to reflect the results from a portfolio balance analysis and a grains value driver analysis, the first iterations of which will be completed during 2007–08.
Portfolio balance analysis
The GRDC will undertake an internal portfolio balance analysis early in the plan period. This will be followed by a similar exercise at the national level. It is expected that the portfolio balance exercise at the national level will lead to the development of centres of excellence in Australia, which in some cases will be based on a realignment of existing infrastructure and skills.
The R&D portfolio balance will be measured in terms of:
- pure basic research, strategic basic research, applied research, and experimental development
- public good (including goods related to market failure) and industry-specific good
- financial benefits to growers and risks
- delivery time to growers of R&D products and services and probability of success
Grains value driver analysis
The GRDC's value driver analysis will prioritise the drivers of grower profitability and sustainability in the grains industry. A graphical representation of the analysis is shown in Figure 14.
In broad terms, revenue, costs and capital form the basis of the grains industry’s total factor productivity. Similarly, environment and market viability form the basis of the growers’ sustainability. The analysis will further break down each of these factors to measure the relative impact of the underlying variables.
Figure 14 - Grains value driver analysis
