September/October – 2004
Author: Steven Carruthers
The NSW Government has reversed its agricultural policy and plans to sell major research stations including the Gosford Horticulture Institute, which incorporates the National Centre for Greenhouse Horticulture. STEVEN CARRUTHERS reports the government’s myopic vision puts at risk food safety and security, and jeopardizes research, extension and training activities, industry R&D funding, as well as new industry investments.
NSW Minister for Primary Industries Ian Macdonald hasNSW. The Gosford Horticultural Institute (GHI), which sent a shudder through agriculture industries over plans to close some rural research stations across incorporates the National Centre for Greenhouse Horticulture (NCGH) and the Somersby Field Station, is among those research stations to close and its activities transferred to the Elizabeth MacArthur Agricultural Institute (EMAI) located at Camden south of Sydney.
Following rallies, petitions and submissions by farmers and industry stakeholders opposing the closures,the Minister announced a moratorium on Grafton, Temora, Deniliquin and Gosford research stations following agreement with the Public Service Association (PSA) about how the views of staff and communities will be taken into account in the decision-making process. The moratorium is expected to end in November 2004 however,the Minister said it does not apply to the disposal of land assets, implying the government still plans to sell these assets, which the Minister has described as ‘under-utilized’ and ‘archaic’ facilities.
After the moratorium was announced,Minister MacDonald sent mixed messages to the greenhouse industry when he told Sydney growers at a certificate presentation ceremony of his plan to invest in new greenhouses at Camden as a commitment to securing the future of horticulture in the Sydney Basin. The government recently invested in modern greenhouse facilities at Gosford with a major focus on crucial integrated pest management (IPM) research and the development of biocontrols to minimize or eliminate the use of pesticides in greenhouse horticulture. The new Gosford greenhouse facilities are far from under-utilized or archaic. The Minister made no mention of the moratorium.
The research station closures are part of the government’s Towards 2020 plan that restructures the Department of Primary Industries (NSWDPI) and centralizes agricultural activities to the Sydney Basin, a reversal of the government’s controversial decentralisation policy introduced in the 1990’s. Under the Towards 2020 package, the government plans to relocate many of its agricultural activities from Gosford to Camden, and to dispose of redundant land assets to fund the restructure and operational expenditure of the new Department that brings together Forestry, Fisheries,Mining and Agriculture.
The closure of crucial research stations across the State has all the hallmarks of government policy on the run,a myopic vision based on the Minister’s need to make cost-savings; rather than on a detailed cost/benefit appraisal of the planned changes. The government’s about face on agricultural policy puts at risk food safety and the State’s food security and jeopardizes research, extension and training activities, and current and future industry R&D funding,as well as new investments from industry. The Minister’s new centralisation plan also tarnishes the government’s reputation with Departmental clients and rural communities.
In the early 1990’s,decentralisation was a major plank in the NSW Government’s new strategy to create regional ‘Centres of Excellence’ for agricultural research.In 1991, the Department transferred its head office to Orange after operating in Sydney for 100 years,since its inception. The move of 400 staff was the largest of its kind ever undertaken by a government department in Australia.
By the beginning of 1997, the NSW Government had closed the long-established Biological and Chemical Research Institute (BCRI) at Rydalmere, and relocated its functions and staff to other research stations throughout the State as part of its decentralisation policy.
The BRCI closure had its genesis in the 1995 budget process when the Government initially decided to achieve savings in the department, primarily through increased cost recovery on research and extension activities,along with some additional savings measures from land asset sales and staff redundancies. The program was intended to generate additional revenue and savings for the State of some $35 million per annum after three years. However,the closure failed to meet government expectations when it only recovered $6 million from the sale of a portion of the Rydalmere site, well below the $22 million claimed in the budget.
The BCRI closure saw the loss of more than 120 staff that accepted redundancy packages with a direct cost to NSW taxpayers of at least $10.4 million. There were also substantial indirect costs such as recruitment and training costs to replace skilled staff that took redundancy, and the costs associated with the short-term loss of productivity. In a ‘Review of NSW Agriculture’ tabled in the Legislative Assembly in March 1997, the Audit Office reported many of the direct and indirect costs associated with the Rydalmere closure could have been avoided with better planning and communication, and it criticised the government for failing to follow its own guidelines on economic appraisal, valuation and disposal of assets.
Since it was opened in 1961, BCRI had been the centre for statewide research and diagnostic services on plant disease and insect pests. The decentralisation of its functions to regional institutes was intended to focus research on industry needs in the long term,and to generate revenue from asset sales in the short term.Then, like now, the government relied on the proceeds of land sales and redundancy packages to fund the Department’s new structure, and made decisions to relocate its research functions without any detailed cost/benefit analysis.
Since announcing the latest research station closures, Minister MacDonald has provided no cost/benefit analysis and little detail about his Towards 2020 plan,other than a three-page media release which included a one-page outline of the government’s re-investment plan for agricultural research. “This $25 million Towards 2020 plan will reinvigorate and re-energize our primary industries science, technology and research in NSW,” he said.
The NSW Minister for Agriculture described it as a “bold, creative and revolutionary plan” and the “single most ambitious” plan in two decades.
Indeed. What the Minister didn’t say is he is looking for a $37million cost saving of which $20 million has been identified from increased revenue generated from Forestry activities.The other $17 million cost-savings will come out of the balance of the new Department (mostly agriculture) from land sales and the recently announced redundancy package.
Sound familiar? Well it should.The same government is using the same strategy used in the 1990’s, but then it was disguised in a grand vision to decentralize agriculture.According to industry estimates, the cost-savings targets for the new Department represents around 340 staff positions,and their loss is expected to result in the loss of some existing services,and downgrading of others that will be relocated from Gosford to the Camden super research facility that the government claims it plans to create.
FUTURE OF GREENHOUSE INDUSTRY
When the government is only focused on cost-savings, it’s difficult to convince the Minister of the real benefits of the current GHI research program and its true impact on the economy and community. The Minister’s proposal fails to acknowledge the increasing importance of the NSW greenhouse industry, now valued at around $300 million at the farm gate per annum, or the increasing urbanisation of the landscape across the Sydney Basin. While the Sydney Basin has been the major greenhouse production area of NSW, many growers lease rather than own their land,and growers are feeling the pressure of encroaching urban development. The development of an environmentally sustainable and profitable greenhouse industry in the Sydney Basin and to the south of Sydney is also severely curtailed by strict local government planning rules that prohibit the expansion of modern high-walled greenhouse structures that afford optimal growing conditions for maximum production. Therefore, further expansion is unlikely to take place in the Sydney Basin.
Throughout Australia, the greenhouse industry is growing rapidly as a key provider of safe, quality food. In NSW,the Central Coast and lower Hunter regions are ideal locations for further industry expansion because of favourable climate, suitable zoning and available labour, while remaining within a short distance of Sydney markets via a fast modern highway.
Over the past four years, the greenhouse industry has experienced 30% growth in the Central Coast region.With this growth, there has been a concentrated strategic effort by the Department to develop its greenhouse research, extension and training capability on the Central Coast. The establishment of the NCGH at Gosford was in recognition of the contribution of this industry to the economy, the environment,and employment in the region.
GHI INVESTMENTS AND DIVIDENDS
GHI employs 19 world-class research,extension and training staff who provide regional,state and national frontline services, including crucial services to the emerging commercial greenhouse industry. The new NCGH has a committed focus on integrated pest management (IPM) strategies for greenhouse horticulture,including the development of biocontrols that minimize or eliminate the use of pesticides. Other frontline services include market access,postharvest and biosecurity research, greenhouse crop physiology and greenhouse QA extension and training, as well as fruit and poultry extension services. GHI has also played a significant role in developing new industries in the region including native cut flowers, Asian vegetables, and currently green tea.
GHI is strategically placed to serve a wide range of agricultural and horticultural industries, many of which are regional.Increasing emphasis on food safety, sustainable resource management, science-based market access, and the pressure for agricultural industries to move out of the Sydney Basin area,led the Department to invest significant funds into GHI,including the establishment of the National Centre for Greenhouse Horticulture in 2000. In its first year of operation, this $1 million investment was matched by in excess of $1 million in industry R&D funding. In 2003, the Department declared GHI a ‘Centre of Excellence’ for Market Access and Greenhouse Horticulture, ramping up its staff and resources, appointing Industry Advisory Committees, and initiating a strategic plan as part of its investment.
GHI RELOCATION IMPACTS
The Gosford research station is NSWDPI’s largest horticultural research, extension and training centre, and is a pivotal resource for other research centres located around the State. Its closure means there will be significant impacts on the Department’s frontline services beyond GHI.These impacts include a loss of access by local,regional and national farming communities to NSWDPI research, extension and industry development services. Its proposed closure will disrupt regional growth in the development of intensive horticulture in the region – it reverses the Department’s policy to encourage horticulture out of the Sydney Basin.
The closure of GHI will impact on existing, externally funded contract commitments, which involve over 40 projects, and lead to a loss of industry confidence in future project capacities through staff and resource instability.
Many GHI programs are not transferable to EMAI where the soils and climate are unsuitable for growing the majority of the native cut flowers and green tea currently being researched at GHI. The loss of these programs will lead to a loss of capability to service developing NSW industries. The move to Camden will also result in a lost opportunity to develop a new horticultural industry and potentially lucrative export markets for green tea.
GHI has the only commercial-sized culture of the biocontrol agent Montdorensis to control western flower thrips. The commercial availability of this valuable new biocontrol agent will be severely curtailed if the GHI closure goes ahead. Likewise the new fungal biopesticide development project. The development of further new biocontrol agents, and work on developing new biorational chemical treatments and the evaluation of chemical risks in greenhouses to biocontrol agents, will be severely disadvantaged by the closure of GHI with the distinct possibility of no industry outcomes. What a waste of taxpayer and industry money!
The EMAI site is colder in winter and hotter in summer compared to the Central Coast region.As a result,greenhouse engineering, heating and cooling costs will be significantly higher than for GHI. Relocation to Camden also means significant additional costs and delays to build new facilities,which will severely interrupt current research programs and future R&D funding opportunities.Contrary to the Minister’s statement that his plan will attract R&D funding to NSW; rather, South Australia and Victoria will instead become the major beneficiaries for future R&D funding to support their rapidly growing greenhouse industries.
The NCGH currently attracts substantial and increasing project funding from sources outside the NSW Government. This in turn attracts matching funds from the Federal Government. Loss of research programs and unavoidable disruptions associated with relocation will see much of this funding lost in the short term. With its Greenhouse Modernisation Project (GMP) and the development of the $75 million Torrens Island Greenhouse Precinct in South Australia, and the establishment of significant, world-class glasshouse operations in Victoria,there is a considerable risk that the void during this time will be permanently filled by interstate research organisations, resulting in the ongoing loss of external funding to NSW.
Relocation also means impacts on staff that no cost/benefit analysis can measure.For example, over the past two years, the Department has recruited five new scientists to build its critical mass at GHI to service regional and national horticulture industries. A number of these came from overseas. After careful selection,the department felt it had selected five top-flight scientists, who have just started to attract industry funding and to establish their reputations with industry.Most have just bought homes on the Central Coast.
With the recent announcement of staff redundancies, the GHI closure will result in the loss of some of these scientists and other key staff with considerable experience, knowledge and skills. For those who find themselves transferred to EMAI, one can expect reduced staff morale and performance for a considerable time.
Finally, the separation of research, extension and training is a retrograde step that is contrary to Best Practice. If this policy decision is allowed to stand, it will be a disastrous outcome for horticultural industries across NSW as well as the national greenhouse industry that owes much of its pesticide-free management practices to work conducted by GHI researchers and extension teams.
Haven’t we learnt anything from the BCRI fiasco! The Minister’s “bold, creative and innovative” plan does not take into account the significance of regional, State and national works conducted at GHI. Farmers across the State are astounded the government’s policy reversal has occurred without consultation with local and regional agricultural industries, and without the benefit of a cost/benefit analysis.
If the BCRI experience is any indicator, the proposed closure of GHI and other research stations will not contribute to cost-savings targets after the costs of relocation, reconstruction and redundancy packages are taken into account,and still maintain the same level of services that currently exist.For GHI, industry estimates put the cost of relocation and reconstruction at Camden between $5-10 million,which needs to be realized from staff redundancy and land that is partially flood prone. Gosford City Council has voiced its opposition to the proposed closure. Councillors have indicated their intention to oppose any plan to subdivide the GHI Narara site for housing,having recently spent over $10 million on studies, mitigation and restoration works in this catchment area.Moving the modern greenhouse structures from Gosford to Camden is also not a commercially viable option.
Even if it was financially worthwhile to sell these research stations, it is only a one-off contribution,whereas the required cost saving is annual, increasing from $37 million in the first year to $58 million annually. How does the Minister plan to meet cost-saving targets in successive years?
Minister MacDonald has shown little inclination to listen to farmers or staff opposed to the closures, and he appears determined to implement his plan without the benefit of a cost/benefit analysis.
While most industry experts agree the NSW Government should be spending more, not less on agricultural research, extension and training, there are alternative options and strategies available to the Minister that have minimum impacts on existing programs and staff and will achieve cost savings for the new Department. With regard to GHI, unused portions of this 93ha site could be sold while retaining existing infrastructure,programs and staff. Another option is to sell the GHI site altogether and transfer its facilities, programs and staff to the 67ha Somersby Field Station, just up the road. The Narara site on which the NCGH is located suffers to some extent from a lack of critical mass and government funding in support of basic programs,so that such a move would,in the long run,be advantageous. The money proposed to be spent at Camden would be better utilized to ‘reinvigorate’ facilities and programs through transfers to Somersby.
If the government is determined to reduce the number of research stations around the State, there are three more obvious candidates for closure that would cause no staff disruption or disruption to programs. They are: close the Bathurst Agricultural Research Station and relocate staff to the Orange Agricultural Institute,just up the road;close the Griffith Viticulture Research Station and relocate staff to Yanco, just up the road; and close Alstonville Tropical Fruit Research Station and relocate staff to Wollongbar, again,just up the road.
With regard to savings from staff redundancies,this will occur via natural attritition and the abstinence of recruitment programs. As the BCRI experience found, at NSW taxpayer cost, redundancies should not go ahead if key staff need to be replaced. There is no saving if the job vacated must be refilled.
The NCGH facilities include four smaller, double-skin greenhouses used for IPM research programs.
THE IMPORTANCE OF IPM?
Today,growing crops without using harmful pesticides and herbicides is the greatest challenge facing growers throughout the world. Competitive, consumer and environmental pressures are forcing growers to use sustainable growing practices that adopt integrated pest management (IPM) strategies and biocontrols to improve food safety, food security (i.e.the long-term capability to produce safe food for future generations), and grower profits. In more simplistic language, it’s about the economic, environmental and social sustainability of growing fresh, safe food, now and into the future.
The history of IPM can be traced back to the late 1800’s when ecology was identified as the foundation for scientific plant protection.The catalyst for modern day IPM began in the 1950’s when over-reliance on chemicals led to catastrophic results.There are many examples where pests have developed resistance to chemicals. Combined with consumer pressures for safe food free of pesticide residues, agricultural industries have undergone a ‘sea-change’ to implement IPM practices.All countries with developed greenhouse industries practice IPM where it is widely accepted as the modern approach to pest management.
However,Australia lags behind in IPM technologies compared to countries that have significant greenhouse industries,including Canada, the USA, New Zealand,and most countries in the European Union. Unfortunately, exotic biocontrols and management practices developed overseas cannot be easily transferred to Australia owing to its unique biosystems. Strict quarantine regulations prevent the importation of most exotic biocontrols, leaving Australian researchers the enormous task of developing their own native beneficials and management protocols,and transferring their successes to growers through extension and training activities.
Indeed, lapses in quarantine and biosecurity have added to the problem with the inadvertent introductions of new exotic pests and diseases into Australia, including western flower thrips and citrus canker, among others,which have cost Australian agriculture millions of dollars in crop losses.
GHI is at the coalface discovering and developing native biocontrols and new IPM management protocols unique to Australian agricultural and horticultural systems. GHI is critical infrastructure for the future success and implementation of IPM programs in greenhouse horticulture across NSW and Australia.
Modern greenhouse used to investigate growing systems, production practices, and to develop effective biological controls.
Food safety is one of the key issues concerning all governments in developed countries. In addition to heightened fears of terrorists contaminating the food chain, today’s health-conscious consumers are demanding fresh, safe, healthy foods free of pesticide residues. Most governments offer significant incentives and investments to develop modern greenhouse industries to produce safe food. Rather than decreasing services, the NSW Government should be following this global trend, increasing R&D funding and expanding its role if it hopes to match Best Practices.
Canada and Australia have much in common including a similar population size and a multicultural urban society. However,by comparison, Canadian Federal and Provincial governments have made significant investments to develop a robust greenhouse industry,which has grown from small beginnings 20 years ago to one of the global powerhouses for greenhouse production. In 2003,the Canadian greenhouse industry was valued at $2.5 billion, with vegetable production representing $1 billion. Combining vegetables and cut flower production,the Australian greenhouse industry is valued at around $500 million at the farm gate per annum, representing about 10% of total vegetable and nursery production in Australia.
The NSW Government could learn much from the Canadian experience. Canadian governments strongly support greenhouse production and IPM research. There are several Federal Government horticulture research stations across Canada where greenhouse production is a strong focus.These include the Greenhouse and Processing Crops Research Centre located in Harrow, Ontario,which is the largest greenhouse vegetable research facility in North America, and the Pacific Agriculture Research Centre in Agassiz,British Columbia,which has several researchers involved with ongoing greenhouse vegetable production services and IPM.Australia has no Federal research facility focused on greenhouse vegetable and flower production, although GHI receives some Federal funding to research greenhouse horticulture with an emphasis on IPM technologies and food safety.
Canada also has a successful program where government will match agricultural industry contributions to research projects. The ‘Matching Investment Initiative’ is not just a greenhouse program, but for all sectors. Combined with other private sector sources and grants programs, it can result in growers’ funds being multiplied by up to 10 times (i.e.each dollar in contributions results in up to $10 worth of research). The triggers for this funding pyramid are the initial contributions from growers. In Australia,the best industry investors can hope for is a dollar-for-dollar matching contribution from the Federal Government.
On the provincial side,there are programs in all the major greenhouse regions in Canada,including Ontario, British Columbia, Quebec and Alberta. The Alberta Government operates two greenhouse research centres, in the north and south of the province. In Australia,GHI is the only greenhouse vegetable and IPM research centre.
The GHI closure will impact on existing externally funded contract commitments, which involve over 40 projects.
In general,Government cutbacks are a sign of the times,even in Canada, though existing greenhouse programs are still functioning quite well.The Ontario Government is now in the process of relocating its research greenhouses to the nearby University of Guelph campus to encourage more co-operative work while taking advantage of some consolidated cost savings. The University already has a large horticultural research department,including floriculture greenhouses,and the move is not expected to disrupt existing research programs and services.
The same synergies do not exist between GHI and EMAI where the Minister’s $6.5 million reinvestment plan there has been ear-marked for a fully robotic dairy, fruit fly research, and postharvest laboratories. Although he announced “significant investment in new greenhouses at Camden”,there is no indication of new greenhouse facilities and IPM projects outlined in the Minister’s flimsy and somewhat confused plan.As it stands, the plan to separate postharvest and market access groups from the greenhouse and IPM groups at GHI will cause serious harm to the highly effective food safety program, including for the greenhouse industry that has been built up at Gosford over the past two years. This is widely regarded as the leading applied research, extension and training unit in this area in Australia. To dismantle it at this stage,when it is starting to deliver benefits to industry and DPI,is just plain silly.
The Towards 2020 plan is not a vision to reinvigorate and re-energize our primary industries; it’s a return to the dark ages before decentralisation. The government’s reversal of its agricultural policy is a bold move, indeed, but not innovative. Without a cost/benefit analysis, I don’t think anyone would disagree with the Minister’s spin that the plan is ‘creative’.
This “bold, innovative and creative” plan is not about benefits to industry, and ultimately the NSW taxpayer; it’s about cost-savings for an increasingly city centric government. If the Minister’s myopic plan is allowed to go ahead, it will mean the end for NCGH research, extension and training services, which will go in different directions. Sadly, many professional staff will not transfer and will be lost. What a tragic waste of time, money and industry faith in both the NCGH and NSWDPI!
ABOUT THE AUTHOR
Steven Carruthers is the Managing Editor of Practical Hydroponics & Greenhouses magazine,and the Vice-President of the Australian Hydroponic & Greenhouse Association.
Audit Office of NSW
Performance Audit Report:A Review of NSW Agriculture, March 1997. ISBN 073104306.
MacDonald,I.,NSW Minister for Primary Industries
Towards 2020: Growing our Future.
Keynote address, NSW Farmers Annual Conference, 2004.
Research and development in protected horticulture as a support to growers – the experience of Leamington, Ontario, Canada. Greenhouse and Processing and Agri-Food Canada, 2004. Ω
PH&G September/October 2004 / Issue 78