Productive, innovative and competitive portfolio industries

Productive, innovative and competitive portfolio industries

Output 1.2 contributed to the department’s outcome by developing and implementing policies and programs to encourage productive, innovative and competitive portfolio industries.

In 2008–09 the Agricultural Productivity Division delivered the production, innovation and competition components of the output, while the Climate Change Division managed drought policy, climate change policy, rural adjustment programs and forestry.

Highlights

• Established the 10-member Rural Research and Development Council to provide independent advice to the minister.
• Completed the Dairy Industry Adjustment Program, including the wind-up of the Dairy Adjustment Authority; managed the final payments of the Dairy Adjustment Levy; and closed the Dairy Structural Adjustment Fund.
• Released seven reports commissioned under the National Biotechnology Strategy to help inform the debate on genetically modified crops and increase knowledge of the role of biotechnology in agriculture.
• Implemented the Murray–Darling Basin Small Block Irrigators Exit Grant Package from September 2008.
• Delivered Exceptional Circumstances (EC) programs and other assistance to approximately 25 000 primary producers and small businesses adversely affected by drought.
• Initiated a work program, in consultation with industry, to determine the role agriculture could play in the Carbon Pollution Reduction Scheme and inform the government’s decision on the sector’s inclusion in the scheme from 2015.
• Implemented the Climate Change Research Program.
• Implemented a range of the government’s forestry policy initiatives.
• Accredited 23 exporters under the new wheat export marketing arrangements.
• Delivered the Murray–Darling Basin Irrigation Management Grants program and the Irrigated Industries Working Program.

Wind-down of industry programs

Dairy Industry Adjustment Program

In 2008–09 the department finalised the Dairy Industry Adjustment Program. The Dairy Adjustment Authority closed on 31 December 2008, the Dairy Adjustment Levy ended from 23 February 2009 and the Dairy Structural Adjustment Fund was closed, effective on 30 June 2009. Surplus levy receipts have been returned to the Consolidated Revenue Fund. For the final report of the Dairy Adjustment Authority, see Appendix 8.

Advancing Agricultural Industries

Advancing Agricultural Industries ended on 30 June 2009. The savings from its closure will go towards the government’s new climate change and productivity agenda. Funds were redirected to Australia’s Farming Future.

The department managed 102 commitments to completion during the wind-down phase. One of these, an Advancing Agriculture Fund (AgFund) project with the Tamworth Regional Council, was terminated by agreement as it could not be effectively completed against the terms of the agreement. However, the work completed on the Strategic Tamworth Action Management Plan for Endemic and Exotic Disease Events project will contribute to future activities within the region.

A post-program AgFund survey found that:

• 88 per cent of respondents had improved knowledge of local industry issues
• 92 per cent had a better understanding of broader industry issues
• 88 per cent had planned activities to build on project outcomes.

Sugar Industry Reform Program

Four out of five regional community projects that remained from the Sugar Industry Reform Program when it ended on 30 June 2008 were completed by 30 June 2009. The remaining project, the BioCane Cow Candy factory extension, was delayed by bad weather but is on track for completion in the second half of 2009.

Rural industries

Murray–Darling Basin irrigated industries

In 2008–09 the department delivered programs for on-farm work that have helped make our irrigation industries more resilient in the face of severely reduced water allocations.

The Murray–Darling Basin Irrigation Industries Workshop program, which started in October 2007 and concluded 30 June 2009, gave irrigators tailored advice about agronomic and business options for managing with reduced water allocations and keeping their farms viable. There were five focus industries: rice, horticulture, dairy, cotton and wine grapes. The program provided $5.104 million in funding to support upwards of 20 000 farmer and service provider contracts (including attendance at information sessions, receipt of information packages and/or direct phone calls), across the Murray–Darling Basin since October 2007.

In March 2009 the minister extended the workshop program end-date for the dairy industry to June 2009. This allowed the industry to continue its successful workshop series and to help dairy farmers in the Basin deal with the effects of falling milk prices, heatwave and drought.

The Murray–Darling Basin Irrigation Management Grants program closed to new applications on 31 March 2009. It provided grants of up to $20 000 to eligible irrigators for on-farm activities to address reduced water allocations and maximise productive use of available water.

The devastating bushfires in Victoria and flooding in the northern Basin made it difficult for some irrigators to find contractors to undertake works in the first half of 2009. In May 2009 the minister extended the deadline for irrigators to complete program activities to 31 December 2009. This will help those who were having difficulty using their grants by the original deadline of 30 June 2009.

Expenditure on the grants program was $60.382 million in 2008–09. A total of $210.751 million has been paid to recipients over the life of the program. In 2008–09, 3243 grants were approved, with a total of 11 155 over the life of the program.

The department also supported the Department of the Environment, Water, Heritage and the Arts (DEWHA) in its delivery of the government’s Water for the Future reform program. The department is a member of the Northern Australia Water Futures Assessment, which is co-ordinated by DEWHA.

Wheat

The department implemented the government’s election commitment to reform wheat export marketing arrangements and establish Wheat Exports Australia to manage the accreditation scheme.

It managed the transitional assistance package, under which up to $9.37 million was made available to help the wheat industry adjust to the new arrangements. Measures included:

• support to ensure that Wheat Exports Australia operated effectively during the change to the new arrangements
• 52 information sessions, attracting more than 1200 growers, in August and September 2008
• briefing sessions in major wheat markets, including Japan, South-East Asia, the Middle East and New Zealand
• monthly reports by the Australian Bureau of Statistics and the Australian Bureau of Agricultural and Resource Economics (ABARE) on market information for wheat production, exports and availability, first released in February 2009
• grants of up to $60 000 to nine companies, including five new exporters, under the first round of the Wheat Export Technical Market Support Grants Program
• work with Grain Trade Australia to develop a voluntary industry code of conduct.

The government is helping to ensure fair and reasonable access to port terminals by providing $1.5 million to support the Australian Competition and Consumer Commission in implementing access undertakings for accredited wheat exporters who operate these facilities.

Sugar

The department worked to wind down the Sugar Industry Reform Program (see ‘Wind-down of industry programs’ on page 32). The program assisted industry to enhance productivity and profitability through diversification.

Horticulture

In 2008–09 the department managed the regulatory process for a new statutory levy and export charge for pineapple growers. This revenue goes towards research and development (R&D), marketing, Plant Health Australia membership and the establishment of an Emergency Plant Pest Response levy.

We also provided guidance to a range of other horticultural industries on developing proposals for new or changed levies.

The department contributed to the development of Future Focus, the industry’s strategic plan to 2020, which was released in May 2009.

The Horticulture Code Committee was re-established in October 2008 to advise the Australian Government in responding to the Australian Competition and Consumer Commission recommendations to improve the workability and effectiveness of the Code. The committee is considering the potential implications of implementing the recommendations and will advise the minister accordingly. The committee met four times and consulted extensively with industry.

Dairy

The Report of the 2008 Dairy Quota Review Panel on administrative arrangements for EU and US dairy tariff rate quotas managed by Australia was released in January 2009, and is available on the department’s website. The tariff rate quotas give preferential access to these markets for limited volumes of specific dairy products.

The minister accepted the general recommendations of the review panel but directed the department to consult further with the industry on some aspects of the proposed arrangements. We consulted on these issues and are now working on amendments to the Dairy Produce Regulations 1986 and underlying administrative arrangements. Our aim is to implement the changes in time for the 2010 quota year.

Dairy Adjustment Authority

The Dairy Adjustment Authority closed on 31 December 2008 (see ‘Wind-down of industry programs’ on page 32).

Under the Dairy Produce Act 1986 the department assumed the residual powers and functions of the authority, including responsibility for its 1800 hotline, payment of remaining cases when resolved, and 2008–09 annual reporting.

The department has responded to 30 inquiries through the hotline and issued more than 10 tax statements on request.

We made one credit payment of $1428 on receipt of correct payment details for a failed transaction that had been authorised by the authority.

There are four unresolved deceased estates and one payment pending where up-to-date bank details have not been provided. These total $14 664.

The authority’s report for 1 July 2008 to 31 December 2008 is at Appendix 8 of this report.

Dairy supply and demand talks

Dairy supply and demand talks with Japan and China were an opportunity to strengthen our bilateral relationships and improve our understanding of the policy settings and supply and demand outlook for the industry in those countries.

The Australia–Japan Dairy Supply and Demand Talks were held in Canberra in October 2008. The Australian delegation included officers from DAFF, ABARE, the Department of Foreign Affairs and Trade and Dairy Australia Limited. The Japanese delegation included officers from Japan’s Agriculture and Livestock Industries Corporation; its Ministry of Agriculture, Forestry and Fisheries; and the Japanese embassy. The key topic of interest to the Japanese delegation was the world outlook for grains.

The China–Australia Dairy Supply and Demand Talks were held in September 2008 in Harbin, China. The department was represented by an officer from Canberra and an officer from the Australian embassy in Beijing. Representatives of the Australian Dairy Industry Council and Dairy Australia Limited also attended.

Domestic dairy industry

A high-level industry–government forum was established to discuss priority issues in the domestic dairy industry. The forum met in October 2008 and February 2009. It included representatives from Dairy Australia Limited, Australian Dairy Farmers and the department.

Food and fibre

Food security and food industry policy

Record world food prices in 2008 led to widespread concern about food security. The department established a food security unit to monitor and provide advice on the global food security situation and investigate ways to address the underlying causes.

The unit collaborated with other government agencies to develop policies addressing food security challenges. The department supported the minister’s engagement in high-level international meetings at which food security was a major topic. These included the inaugural G8 meeting of agriculture ministers in Rome in April 2009 and the UN High Level Meeting on Food Security For All in Madrid in January 2009.

The department also participated in meetings with non-government organisations and research bodies to discuss food security issues and ways forward. These included World Vision, the Crawford Fund and representatives of the Consultative Group on International Agricultural Research network, including the International Maize and Wheat Improvement Centre and the International Rice Research Institute.

The department provided submissions to the UK Parliamentary Inquiry into Global Food Security and the Senate Inquiry into Food Production. The Senate inquiry is due to report in November 2009.

Regional food producers

The department launched the Regional Food Producers Innovation and Productivity Program on 19 December 2008. The program aims to boost productivity through innovation by providing assistance to regional food producers involved in value adding and processing to develop or adopt new technologies or improve existing production lines. We received 235 expressions of interest in the first round of grants, 54 of which went to the final assessment phase. A program advisory panel has been established to provide expert advice on assessing applications.

Meat industries

The department’s activities in support of Australia’s meat industries in 2008–09 included:

• giving evidence at a hearing of the Senate Inquiry into Meat Marketing
• establishing a secretariat to support the Primary Industries Ministerial Council review of meat labelling
• participating in the annual Australia–Japan beef consultations with government officials in Japan
• developing the communication strategy for the rollout of the Q-Fever vaccination program, with the Department of Health and Ageing
• producing the Quota Administration Unit 2007–08 Annual Statement, which details the administration, mechanics and costings of the tariff rate quotas for exports of beef, sheepmeat and dairy products to the US and the EU.

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Intensive livestock and game industry development

The department continued its work to assess an egg industry request to increase the research and development component of the Laying Chickens Levy. Assessment of a pork industry request for an increase in research and development funding through the Pig Slaughter Levy progressed.

Wool industry

In 2008–09, the department:

• approved 25 requests to import woolpacks under the Customs (Prohibited Imports) Regulations 1956
• granted 42 merino export exemptions under the Livestock Export (Merino) Orders 1990
• amended the Livestock Export (Merino) Orders 1990 to enable seven export auctions to be conducted in calendar year 2009.

Wine industry

The department coordinated negotiations with the European Commission for an agreement to replace the 1994 Australia – European Community Agreement on Trade in Wine. On 1 December 2008 the Minister for Foreign Affairs and Trade signed the new agreement.

Working closely with the Office of Parliamentary Counsel, the Department of Foreign Affairs and Trade, IP Australia and the Australian Wine and Brandy Corporation, we developed the Australian Wine and Brandy Corporation Amendment Bill 2009 to bring the agreement into force. The Bill was introduced into parliament on 22 June 2009.

In consultation with the wine industry, we developed memorandums of understanding on wine with China and Hong Kong.

We represented Australia at the March 2009 meeting of the International Organisation of Vine and Wine. At that meeting the executive committee agreed to review the organisation’s resolutions—an outcome Australia has been working to achieve for several years.

The department supported the minister in the appointment of the new chair of the Australian Wine and Brandy Corporation.

Fisheries

Fisheries Environment and Recreational Policy

The Recreational Fishing Advisory Committee was formed and began work on a draft recreational fishing industry development strategy. Regional contributions to the strategy were collected through stakeholder meetings in Western Australia, Queensland, Victoria and Tasmania.

Torres Strait fisheries

The process of developing a Torres Strait tropical rock lobster five-year business plan began in 2008–09. We completed the Torres Strait Prawn Management Plan in April 2009. The final report on the plan was presented to the Torres Strait Prawn Management Advisory Committee to allow it to incorporate the findings into deliberations on the fishery’s harvest strategy.

Structural adjustment

We have extended 34 projects under the Securing our Fishing Future structural adjustment program into 2009–10. Project extension was granted by the Minister for Finance on 5 February 2009, due to setbacks in meeting project milestones caused by external factors. The other 104 projects in the program are complete.

Research, development and innovation

Increasing collaboration and cooperation

The department continued to encourage and support the rural research and development corporations (RDCs) in collaborating on joint projects where the outcomes are expected to benefit more than one industry, and on matters of common interest.

Progress towards the development of the National Research, Development and Extension Framework, under the auspices of the Primary Industries Ministerial Council, has been significant. This has been helped by strong participation from the Council of Rural Research and Development Corporations Chairs (CRRDCC).

Individual RDCs have taken leading roles in developing 14 sectoral and seven cross-sectoral plans within the framework. An example is the Climate Change Strategy for Primary Industries, to which all RDCs, Primary Industries Standing Committee jurisdictions, the CSIRO and universities are actively contributing.

The department also worked with the Primary Industries Standing Committee’s Research and Development Subcommittee to establish a National Genetic Resources Centre for plant (including food and agriculture) genetic resources.

Increasing productivity and investment returns

The department has worked closely with the CRRDCC to establish a framework for measuring public and private returns on the $500 million collective investment made by the RDCs. The results of the first full analysis using this framework were published on the CRRDCC website in November 2008. The analysis showed that a sample of 32 randomly selected projects from the RDC portfolio is estimated to deliver an average return of $11 for each dollar invested.

Promoting responsible biotechnology use and awareness

• The department released seven reports commissioned under the National Biotechnology Strategy:
• Genetically modified crops: tools for insect pest and weed control in cotton and canola
• Australia’s crops and pastures in a changing climate—can biotechnology help?
• Maintaining product integrity in the Australian seed and grain supply chain—the role of sampling and testing for GM events
• Adapting the GENESYS gene flow model for GM canola in Australia
• Biotechnology and Australian agriculture
• Regional agricultural information forums 2007–08
• GM stockfeed in Australia: economic issues for producers and consumers.

We produced a pack of 12 information brochures based on these and earlier reports commissioned under the National Biotechnology Strategy, as well as a fact sheet on genetically modified (GM) crops. All of these are available on the department’s website at www.daff.gov.au/agbiotech.

Australia was a member of the steering committee of the APEC High Level Policy Dialogue on Agricultural Biotechnology. In 2008–09 the focus was on regulatory harmonisation for GM crop products, and technical approaches to global challenges such as food and energy demand and environmental issues.

New and emerging technologies

The department participated in the Standing Interdepartmental Committee on Nanotechnology and in the Health, Safety and Environment Working Group. These groups support the whole-of-government approach to nanotechnology and maintain a watching brief on developments, particularly in relation to food and agriculture. In November 2008 the department participated in a secretaries’ meeting on nanotechnology.

Through these groups we:

• commented on the recommendations from the NSW Parliamentary Inquiry into Nanotechnology
• contributed to the government response to A review of possible impacts of nanotechnology on Australian regulatory framework (Monash University report)
• contributed to the development of a national Health, Safety and Environment Research Plan.

Rural R&D policy and governance

The department participated in the interdepartmental committee convened to formulate the government’s response to the Cutler review of the National Innovation System. While the government’s response in Innovation Powering Ideas does not directly address our portfolio, the changes to the system and the funding boost announced in the 2009–10 Budget will have flow-on benefits for rural industries.

The department established the Rural R&D Council in February 2009 to provide independent advice to the minister. Its major task is to develop a national strategic R&D investment plan and performance framework for primary industries.

We also worked with the nine industry-owned companies that invest in rural R&D and are funded through statutory levies and government matching funding to improve the performance of rural R&D investments. The implementation of enhanced funding agreements for these companies will strengthen governance frameworks and introduce program-based performance reporting.

The department supported the minister’s involvement as a member of the Prime Minister’s Science, Engineering and Innovation Council, which met in October 2008 and June 2009. The Australian Chief Veterinary Officer participated in the expert Epidemics in a Changing World working group, which delivered a presentation to the June meeting of the council.

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Drought policy review

The government continued the comprehensive national review of drought policy it began in April 2008, in recognition that the current Exceptional Circumstances (EC) arrangements may no longer be the most appropriate in the context of a changing climate.

The department has led this review, including investigations of the climatic, economic and social aspects of drought and drought support by the Bureau of Meteorology, CSIRO, the Productivity Commission and an expert social panel. The review has also benefited from valuable input by thousands of members of the farming community.

Climatic and social assessment

A report by the Bureau of Meteorology and CSIRO, titled An assessment of the impact of climate change on the nature and frequency of exceptional climatic events, was released in July 2008. It found that:

• the risk of severe drought will be greater over the next 20 to 30 years than it has been in the past 100 years, particularly in southern Australia
• the current definition of ‘Exceptional Circumstances’, which is based on the historical climate record, is no longer appropriate
• farmers need access to better information about climate change preparedness.

The expert panel appointed by the minister to consider the social aspects of drought released its report, It’s about people: changing perspectives on dryness, in October 2008. Key findings and recommendations include:

• drought exacerbates long-term socio-demographic trends that are contributing to the decline of some rural populations
• Australia needs to move away from crisis-framed responses and adopt sustainable approaches based on activities undertaken before periods of dryness
• government policies should focus on facilitating the social wellbeing of farm families, rural businesses and communities, to improve their capacity to cope with dryness
• the drought support roles of federal, state and local governments need to be clarified and their policy implementation coordinated.

Results of Productivity Commission inquiry

The Productivity Commission’s final report into government drought programs was tabled in parliament in May 2009. Its major finding was that governments should redirect drought assistance funding to programs that help farmers better manage risk. Other recommendations include:

• terminating EC arrangements
• ensuring all farm households in hardship, not just those in EC-declared areas, have temporary access to welfare support
• encouraging primary producers to adopt self-reliant approaches to managing risk
• increasing public funding for R&D and extension to help farmers prepare for, manage and recover from the impacts of climate change
• establishing an intergovernmental agreement linking Commonwealth funding to commitments by states and territories.

Improving drought policy

The department is working with the states and territories to improve drought policy and secure better outcomes for farmers. The government remains committed to helping farmers who are suffering from the current drought. EC and other drought assistance payments will continue unchanged until a new drought policy is implemented. The government expects to finalise the details of its reforms to the drought support system later in 2009.

Supporting people

Exceptional Circumstances assistance

EC assistance is the government’s primary mechanism for providing support to eligible farmers and small businesses affected by drought. The objective is to help ensure that farmers with good long-term prospects are not forced to leave the land because of short-term adverse events. The main forms of assistance are interest rate subsidies and income support. Figure 7 shows the five-year, drought-driven trend in EC assistance.

EC assistance expenditure and uptake were lower in 2008–09 than in the previous year, mainly because fewer areas were EC declared. In the year to 31 May 2009:

• 14 437 EC interest rate subsidy applications were approved (13 560 from farm businesses and 877 from small businesses), down from 19 578 for all of 2007–08
• approximately $449.5 million was paid in subsidies, compared to $717.3 million in 2007–08
• 25 576 households (24 216 farm and 1360 small business households) received EC relief payments totalling $305.68 million, down from 29 405 and $393.94 million in 2007–08
• 18 924 households were still receiving income support at 31 May 2009
• interim income support (provided while EC applications are being assessed) totalling $1.496 million went to 382 households (313 farm and 20 small business households), down from $7.787 million and 1321 households in 2007–08.

Extreme events are not limited to drought. During 2008–09, Natural Disaster Relief and Recovery Arrangements were activated for areas badly affected by floods in Queensland and New South Wales and by bushfires in Victoria. The department worked closely with other agencies in developing a whole-of-government response to these events.

Rural Financial Counselling Service

The Rural Financial Counselling Service program gives grants to organisations to provide free financial counselling services to primary producers, fishers and small rural businesses in financial hardship.

Under the current three-year grants funding period, which began on 1 July 2008, we have funded 14 organisations, with counsellors in over 80 rural and regional communities. Funding for the first and second years has been approved. The third year’s funding is yet to be confirmed, as the program is being reviewed as part of the national drought policy reform process.

From 1 July 2008, the program introduced a case management model for service delivery, to help clients become self-reliant and sustainable in the long term. A new tool to support this—the Enterprise Action Plan—was developed with rural financial counsellors and expert independent advisers. The plan documents clients’ business and financial situations and maps their goals, strategies and timelines to manage industry adjustment and climate change pressures.

This approach complements the new role of the program in providing mandatory case management support to clients wishing to access Transitional Income Support payments and Climate Change Adjustment Program grants.

In 2008–09 the department deployed additional rural financial counsellors to help people in natural disaster areas—flood-affected parts of southern Queensland and northern New South Wales, and bushfire-affected parts of Victoria.

Figure 8 shows the five-year trend in client uptake of the program.

Implementing Australia’s Farming Future programs

Climate Change Research Program

The Climate Change Research Program commenced in July 2008. The department’s funding of $37.9 million under the program leveraged a further $61.7 million in contributions from state government, industry and research organisations. The program includes:

• the Soil Carbon Research Program to undertake national sampling and analysis for measuring carbon changes in soil across Australia in response to farm management practices
• the Nitrous Oxide Research Program to develop a national system for measuring nitrous oxide emissions from agricultural soils
• the Reducing Emissions from Livestock Research Program
• Adaptation Research Program projects to develop knowledge and management strategies to help primary producers adapt to a changing climate while promoting productivity
• funding to a biochar research project.

Targeted training

In May 2009 the minister announced 46 projects to be funded in the first round of FarmReady Industry Grants, totalling just under $6.3 million.

Demand for FarmReady Reimbursement Grants was strong. More than 3300 grants were pre-approved and $1.83 million expended in the first five full months of operation (February to June 2009). There were 231 approved FarmReady courses available at the end of June 2009 focusing on the following key learning areas:

• understanding the implications of climate variability and climate change
• integration of new techniques, including high-level technical skills, for sustainable production as a result of climate change
• natural resource planning and adaptive management, such as planning for sustainable use, integrated catchment management, drought management, fire management and flood management as a result of climate change
• farm business management, risk assessment and identification of management options
• development of research and analytical skills to be applied in primary production enterprise
• strategic planning and thinking, scenario planning and decision-making
• holistic ‘whole farm’ planning
• financial management, such as budget preparation, monitoring and reporting, and the ability to understand financial statements
• human resource management.

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Climate change adjustment

The Climate Change Adjustment Program, which began on 1 July 2008, helps farmers in financial difficulty who are, or are likely to be, adversely affected by climate change, to obtain professional advice, training, and re-establishment grants.

Grants of up to $5500 are available for advice and training. Rural financial counsellors help recipients develop an action plan setting out goals, actions, timelines, expected outcomes and performance indicators for the process of adjusting to the impacts of climate change.

In 2008–09, 519 advice and training grant applications were assessed as eligible and 191 action plans were developed.

No Re-establishment Grants of up to $150 000, available to eligible farmers who have decided to leave farming were taken up in 2008–09. Farmers, instead, chose to access the EC Exit Grant program.

Transitional income support

The Transitional Income Support program, which began on 16 June 2008, provides short-term income support to farmers in serious financial difficulty while they recover from drought and adapt to changing circumstances. Payments equivalent to the Centrelink Newstart Allowance may be provided for up to 12 months.

In 2008–09, 268 farmers received Transitional Income Support.

The program was extended to 30 June 2010 to continue to provide support to farm families in financial difficulty to help them manage the impacts of climate change on their farm business until new policies arising from the National Review of Drought Policy are implemented.

Forestry

Regional forest agreements

The three Tasmanian Community Forest Agreement Industry Development Programs finished on 30 June 2009. In undertaking the programs, the Australian Government contributed a total of $68.89 million of the approximately $225 million invested by the Tasmanian forest industry on projects that contributed to the objectives of the program. These investments included new machinery and equipment purchases, and major infrastructure projects such as the upgrading and construction of sawmilling and processing facilities to assist the industry to adjust to changes arising from the agreement. Recipients’ final reports indicate that approximately 2200 jobs have been maintained and approximately 280 new jobs were created across the Tasmanian forest industry as a direct result of these investments.

The first five-year review of the three New South Wales Regional Forest Agreements was progressed and the initial report finalised. The draft report on progress in implementation of the New South Wales agreements was released by ministers for public comment on 23 June 2009.

Forest and Wood Products Australia

The department met twice with the chair and chief executive of Forest and Wood Products Australia in 2008–09 to discuss its operating and financial plans and priorities. This consultation is a requirement of the statutory funding agreement under which the company is funded as the forest industry R&D service provider to the government.

Illegal logging

In 2008–09 the department continued to take a lead role in developing whole-of-government policy and regulatory options for identifying illegally logged timber and restricting its import into Australia. The department commissioned a draft regulation impact statement, to be finalised early in 2009–10, estimating the costs and benefits of regulatory options for implementing this commitment.

Our illegal logging policy was a focus in Australia’s bilateral engagement with China, Korea, Malaysia, Indonesia and Papua New Guinea. In September 2008 the department joined with the Chinese and US governments in launching the Asia–Pacific Network for Sustainable Forest Management and Rehabilitation, to promote and improve sustainable forest management and rehabilitation in the Asia–Pacific region.

The first phase of the Asia–Pacific Forestry Skills and Capacity Building program ended in June 2009. This investment focused on key areas including improvements in forest management practices and governance arrangements, and training in timber certification.

National Indigenous Forestry Strategy

The National Indigenous Forestry Strategy continues to work in northern New South Wales, the Green Triangle in south-eastern South Australia and western Victoria, the Great Southern region of Western Australia, and northern Australia to bring together Indigenous communities and forest companies to identify opportunities for Indigenous people.

Meetings were held around the country to promote opportunities for partnerships between forestry organisations and Indigenous bodies.

National Climate Change and Commercial Forestry Action Plan

The National Climate Change and Commercial Forestry Action Plan is being drafted in fulfilment of a commitment by the Council of Australian Governments to establish climate change action plans for critical sectors of the economy.

The capacity of forests and wood products to provide long-term carbon storage gives forestry an important role in efforts to address climate change. The purpose of the plan is to identify and remedy gaps in knowledge about the impacts of climate change on forest industries, and to help the industry respond to climate change through adaptation and mitigation. The plan is expected to be submitted to the Primary Industries Ministerial Council in November 2009.

Forest Industries Development Fund

Round 1 of the Forest Industries Development Fund was implemented during 2008–09. Ten projects valued at a total of $4.65 million were offered funding in May 2009. At the end of June 2009, four grants had been taken up and negotiations were continuing with six other grantees.

Forest industry database

Two projects to develop a forest industry database were commissioned in 2008–09. A project was commissioned to compile woodflow statistics for the various forestry regions. Arrangements were finalised in May 2009 with a contractor to develop the database for delivery in September 2010. This will identify knowledge gaps, skills shortages, and training and workplace planning and development issues.

Other work

Small Block Irrigators Exit Grant Package

In September 2008 the Prime Minister and the Minister for Climate Change and Water announced the new $57.1 million Small Block Irrigators Exit Grant Package for small block irrigators, particularly horticultural producers, in the Murray–Darling Basin. This is part of the Water for the Future plan.

The objective is to help small-block irrigators remain in their communities while ceasing irrigation activities.

In 2008–09, 495 claims for the exit grant were lodged before the closing date for applications on 30 June 2009. Most expenditure will occur in 2009–10 when water sale processes are completed and claims finalised.

Outlook for 2009–10

In 2009–10 we will finalise the government’s response to the drought policy review. Until the policy reform process is complete, EC and other drought assistance measures will continue unchanged. There is no clear picture of when the current drought will finish, and the climatic outlook is uncertain. The Rural Financial Counselling Service will assist vulnerable farmers and small-business owners in making the best decisions for long-term sustainability.

We will work with the Department of Climate Change and the agricultural sector on the role of agriculture in the government’s Carbon Pollution Reduction Scheme and, through involvement in international negotiations, ensuring appropriate treatment for the sector in a post-Kyoto agreement.

The Climate Change Research Program will conduct research projects over four years on soil management, nitrous oxide, reducing emissions from livestock, biochar and adaptation. The program will commission further new research following a comprehensive gap analysis.

We will continue to implement the Forest Industries Development Fund, which provides funding for value-adding projects that will improve the international competitiveness of Australian forest products. This will involve the progression of projects awarded under the first funding round and the implementation of a second funding round.

We will finalise the National Climate Change and Commercial Forestry Action Plan and invest in research projects on the effects of climate change on forestry through the Forest Industries Climate Change Research Fund. Proposals for grants from this fund, valued at $5 million, will be sought early in 2009–10 for implementation by June 2011.

We will provide support for regional efforts to improve sustainable forest management, with a particular focus on combating illegal logging and facilitating the Australian Government’s policy approach for restricting imports of illegally logged timber products.

Working with the Department of Industry, Innovation, Science and Research, we will contribute to the National Enabling Technologies Strategy on agriculture-related biotechnology and nanotechnology priorities.

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Performance under administered items of Output 1.2

Table 5 – Output 1.2 performance—administered items

Administered item 1.2.1 AAA—Advancing agricultural industries
Budget	$2.372 million
Key performance indicator	Manage the wind-down phase of the program.
Measured by	Effectiveness in overseeing completion of remaining AgFund, Action Grant and regional and community projects as part of the wind-down of the program.
2008–09 target	Remaining AgFund projects, Action Grant projects and regional and community projects completed by 30 June 2009 with deliverables received in accordance with funding agreements, allowing the program to be wound down.
Performance outcome	Target met.
Comments	All projects but one completed by 30 June 2009. Exception was terminated by agreement due to non-delivery against agreed milestones. Wind-down of the program was completed in accordance with the department’s grant management guidelines and complied with minimum government standards.
Administered item 1.2.2 AAA—Farm Help
Budget	No budget allocated
Key performance indicator	Manage the wind-down phase of the program.
Measured by	Effectiveness in completing the wind-down phase.
2008–09 target	Process final appeals.
Performance outcome	Target met.
Comments	Farm Help closed to new applicants on 30 June 2008 and only appeals were processed in 2008–09.
Administered item 1.2.3 AAA—Rural Financial Counselling Service
Budget	$14.759 million
Key performance indicator	Provide short-term financial assistance and training to farmers experiencing severe financial difficulty, enabling them to take action to improve the financial performance of their farm enterprise, find alternative sources of income or re-establish themselves outside farming.
Measured by	Level of awareness of the program among potential recipients. Number of clients making change or adjustment.
2008–09 target	Level of awareness demonstrated by high percentage of self-referrals to the program. Clients adjusted within or outside agriculture.
Performance outcome	Targets met.
Comments	Of the 4394 referrals to the program, 1596 were self-referrals. Adjusted 698 clients out of agriculture and 3116 within agriculture, some of whom may be continuing to make changes while being case managed by a Rural Finance Counsellor.
Administered item 1.2.4 Agricultural and Veterinary Chemicals Minor Use Program
Budget	$0.132 million
Key performance indicator	Fund the Australian Pesticides and Veterinary Medicines Authority to facilitate the uptake of permits issued by the authority for minor use of agricultural and veterinary chemicals.
Measured by	Allocation of funding.
2008–09 target	Funding allocated.
Performance outcome	Target met.
Administered item 1.2.5 Australian Animal Welfare Strategy
Budget	$0.974 million
Key performance indicator	Implement the Australian Animal Welfare Strategy, including harmonised national animal welfare legislation and the development, revision and implementation of national standards. Provide support for an international scientific conference on animal welfare and for research on animal welfare issues of national importance.
Measured by	Extent of progress on development of national animal welfare standards. Success of conference and development of priority animal welfare R&D project proposals.
2008–09 target	First draft of external review of Australia’s framework for improving animal welfare outcomes, including legislation covering animal welfare in all sectors, prepared by 30 May 2009. Conference rated a success by participants (through formal feedback questionnaires).
Performance outcome	Targets met.
Administered item 1.2.6 Australia’s Forest Industry—preparing for the future
Budget	$4.900 million
Key performance indicator	Provide support to the Australian forest industry to address skills shortages, boost exports through a Forest Industries Development Fund, build a forestry industry database, restrict importation of illegally logged timber and prepare forest industries for climate change.
Measured by	Approval and implementation of grant projects.
2008–09 target	Grants approved for funding and implemented.
Performance outcome	Target met.
Administered item 1.2.7 Australian Seafood Industry Council
Budget	$0.050 million
Key performance indicator	N/A
Measured by	N/A
2008–09 target	N/A
Performance outcome	N/A
Comments	Funding program ended in 2008–09. No expenses were incurred against this program as the funding recipient has ceased to be a legal entity.
Administered item 1.2.8 Drought Assistance—Interim Income Support Payments
Budget	$5.560 million
Key performance indicator	Provide short-term financial support for farm and small business families experiencing a severe downturn in income due to a rare and severe event, such as severe drought.
Measured by	Provision of financial support, through Centrelink, in accordance with program guidelines.
2008–09 target	Short-term financial support provided to eligible farm and small business families in accordance with program guidelines.
Performance outcome	Target met.
Administered item 1.2.9 Drought Assistance—Murray–Darling Basin Grants to Irrigators
Budget	$117.931 million
Key performance indicator	Deliver Irrigation Industries Workshop program to fund industry-specific information sessions to provide Murray–Darling Basin irrigators with practical advice on managing their farm enterprises with reduced water allocations. Deliver Irrigation Management Grants Program to assist Murray–Darling Basin irrigators to implement water management strategies that address reduced water allocations and improve on-farm practices.
Measured by	Delivery of Irrigation Industries Workshops across the Murray–Darling Basin. Uptake and delivery of Irrigation Management Grants Program.
2008–09 target	Information sessions funded. Grants provided to eligible irrigators in accordance with program guidelines.
Performance outcome	Targets met.
Administered item 1.2.10 Drought Assistance—Professional Advice
Budget	$5.560 million
Key performance indicator	Provide Professional Advice and Planning Grants to enable farm enterprises to access professional business advice and planning assistance in developing drought and risk management strategies in a written business plan.
Measured by	Improvement in farmers’ self-reliance in managing risks from climatic variability, understanding of the impacts of climate on their business, and capacity to prepare for and manage drought.
2008–09 target	Improvement in farmers’ self-reliance as a result of program grants strongly indicated by surveys and qualitative analyses.
Performance outcome	Target met.
Administered item 1.2.11 Drought Assistance—Re-establishment Assistance
Budget	$35.660 million
Key performance indicator	Provide EC Exit Grants to farmers to re-establish outside agriculture.
Measured by	Effective delivery, through Centrelink, of re-establishment grants according to program guidelines.
2008–09 target	Grants provided to eligible recipients according to program guidelines.
Performance outcome	Target met.
Comments	Uptake of the grant has been relatively low due to the continuation of alternative government drought assistance.
Administered item 1.2.12 FedLink Supplementation for Australian Pesticides and Veterinary Medicines Authority
Budget	$0.096 million
Key performance indicator	Provide funding to the Australian Pesticides and Veterinary Medicines Authority to enable it to connect to the FedLink network and improve financial accountability.
Measured by	Allocation of funding.
2008–09 target	Funding allocated.
Performance outcome	Target met.
Administered item 1.2.13 FedLink Supplementation for Rural Industries Research and Development Corporation (RIRDC)
Budget	$0.085 million
Key performance indicator	Provide funding to the RIRDC to enable it to connect to the FedLink network and improve financial accountability.
Measured by	Allocation of funding.
2008–09 target	Funding allocated.
Performance outcome	Target met.
Administered item 1.2.14 Fisheries Research Program
Budget	$1.900 million
Key performance indicator	Increase investment in fisheries research to underpin policy development and improve and expand the assessment of the status of Australian fisheries.
Measured by	Allocation of funding to research projects under an agreed strategic work plan. Reclassification of Commonwealth-managed species currently classified as ‘uncertain’.
2008–09 target	Funding allocated and strategic work plan established. Reclassification completed.
Performance outcome	Targets met.
Administered item 1.2.15 Fisheries Resources Research Fund
Budget	$1.900 million
Key performance indicator	Provide funding to the Fisheries Research Fund for independent assessment of Commonwealth-managed fisheries.
Measured by	Provision of budgeted funding.
2008–09 target	Budgeted funding provided.
Performance outcome	Target met.
Administered item 1.2.16 Fishing Structural Adjustment Package
Budget	$17.318 million
Key performance indicator	Assist affected onshore businesses and fishing communities under Securing our Fishing Future. Fund the Australian Fisheries Management Authority to subsidise levies and improved science, compliance and data collection.
Measured by	Completion of Securing our Fishing Future grant payments and subsequent auditing. Provision of funding to the Australian Fisheries Management Authority.
2008–09 target	All Securing our Fishing Future grants and auditing completed by 30 June 2009. Funding fully provided.
Performance outcome	Targets met.
Comments	Completed all grant payments for those projects that have not been extended into 2009–10.
Administered item 1.2.17 Horticulture Code of Conduct
Budget	$0.352 million
Key performance indicator	Support Australia’s horticultural industries to perform strongly and respond to market signals along the supply chain by increasing transparency and clarity of transactions between growers and wholesalers and providing a fair and equitable disputes resolution procedure.
Measured by	Effective management of the Horticulture Code of Conduct to support Australia’s horticultural industries.
2008–09 target	Provision of a mediation service, support for the Horticulture Code Committee and provision of policy advice to government.
Performance outcome	Target met.
Administered item 1.2.18 International Agricultural Cooperation—Live Animal Trade Program
Budget	$1.287 million
Key performance indicator	Support improved welfare outcomes for animals shipped to overseas markets through the delivery of education and training, improvements to infrastructure and assistance with strategic planning.
Measured by	Extent of support through the Live Animal Trade Program for improved animal welfare outcomes for animals shipped to overseas markets.
2008–09 target	Education and training, improvements to infrastructure and assistance with strategic planning delivered to support improved animal welfare outcomes for animals shipped to overseas markets.
Performance outcome	Target met.
Administered item 1.2.19 International Organisations Contributions
Budget	$1.651 million
Key performance indicator	Facilitate achievement of Australia’s international fisheries and aquaculture, field crops and wine trade policy objectives through membership of the Commission for the Conservation of Southern Bluefin Tuna, the Network of Aquaculture Industries in Asia–Pacific, the Indian Ocean Tuna Commission, the Western and Central Pacific Fisheries Commission, the International Grains Council, the International Organisation of Vine and Wine, the International Sugar Organisation and the International Cotton Advisory Committee.
Measured by	Payment of annual membership contributions to each organisation.
2008–09 target	All annual membership contributions paid.
Performance outcome	Target met.
Administered item 1.2.20 Land and Water Resources Research and Development Corporation (Land & Water Australia)
Budget	$13.018 million
Key performance indicator	Disburse annual appropriation to Land & Water Australia to undertake research and development relevant to its objectives.
Measured by	Timely payment to Land & Water Australia.
2008–09 target	Payments made as scheduled.
Performance outcome	Target met.
Administered item 1.2.21 New Industries Development Program
Budget	$0.180 million
Key performance indicator	Assist small to medium-sized agribusinesses to gain financial assistance and the business skills required to successfully commercialise new agribusiness projects, services and technologies.
Measured by	Timely completion of all projects.
2008–09 target	All projects completed by program end date of 30 June 2009.
Performance outcome	Target met.
Administered item 1.2.22 Promoting Australian Produce Program
Budget	$2.000 million
Key performance indicator	Assist Australian farmers and the seafood industry to promote their produce by developing their marketing and promotion capacity.
Measured by	Number of industries assisted to develop their capacity to market and promote their produce.
2008–09 target	Expenditure of budgeted funds on grants to assist a wide cross-section of the food industry.
Performance outcome	Target not yet met.
Comments	Budgeted funds not expended given insufficient lead times required for the calling and processing of applications before 30 June 2009. In March 2009 the funds were rephased to forward years. To date, $1.9 million in funding has been committed.
Administered item 1.2.23 Recreational Fishing Community Grants
Budget	$2.200 million
Key performance indicator	Deliver grants to improve recreational fishing throughout Australia.
Measured by	Effectiveness in managing grants and subsequent auditing in accordance with funding agreements and project guidelines.
2008–09 target	All grants delivered according to funding agreements and project guidelines.
Performance outcome	Indicator substantially met.
Comments	Some budgeted funds ($400 000) moved into 2009–10 as a result of project withdrawals and grantees not meeting projected timelines due to external factors such as delays in planning approval and adverse weather.
Administered item 1.2.24 Recreational Fishing Industry Development Strategy Program
Budget	$0.500 million
Key performance indicator	Support enhanced recreational fishing opportunities and development of effective leadership and representation by industry stakeholders.
Measured by	Extent of progress towards delivery of the Recreational Fishing Industry Development Strategy (RFIDS), including review of recreational fishing policy.
2008–09 target	RFIDS delivered and review of recreational fishing policy completed.
Performance outcome	Target partly met.
Comments	Recreational Fishing Advisory Committee, established in February 2009, has begun drafting strategy and policy documents. The committee perceived a risk that any projects recommended prematurely would not meet the needs of a national strategy. Therefore, in order to ensure the most effective and strategic use of the funds provided, it requested that unspent funding be rolled over into 2009–10.
Administered item 1.2.25 Regional Food Producers’ Innovation and Productivity Program
Budget	$6.000 million
Key performance indicator	Fund projects that encourage growth in regional and seafood industries through new technologies, processing or production methods and export market development.
Measured by	Extent of progress, through funding of suitable projects, towards development of new technologies, production or processing methods over the course of the program.
2008–09 target	Funding allocated to suitable projects.
Performance outcome	Target partly met.
Comments	Based on response to date, the program is on track to commit and expend all funds by the termination date of 30 June 2012.
Administered item 1.2.26 Rural Industries Research and Development Corporation (RIRDC)
Budget	$13.345 million
Key performance indicator	Disburse annual appropriation to the RIRDC to undertake R&D.
Measured by	Disbursement of appropriation.
2008–09 target	Timely payment made.
Performance outcome	Target met.
Administered item 1.2.27 Sugar Industry Reform Program
Budget	$4.032 million
Key performance indicator	Complete existing projects, consistent with finalisation of the program.
Measured by	Management of projects during wind-down of program.
2008–09 target	Project performance managed during the wind-down phase to meet government standards.
Performance outcome	Target met.
Administered item 1.2.28 Tasmanian Community Forest Agreement
Budget	$38.170 million
Key performance indicator	Support forestry industry development by implementing the Hardwood, Softwood and Country Sawmills programs of the Tasmanian Community Forest Agreement.
Measured by	Provision of funding to complete approved grant projects funded under the Tasmanian Community Forest Agreement industry development program.
2008–09 target	Funding provided and grant projects completed in accordance with deeds of agreement.
Performance outcome	Target met.
Administered item 1.2.29 Torres Strait Prawn Fisheries
Budget	$0.200 million
Key performance indicator	Improve the information base underpinning the management of the Torres Strait Prawn fishery and assist industry transition to new management arrangements.
Measured by	Completion of research program and final report.
2008–09 target	Research program completed and final report delivered by 30 June 2009.
Performance outcome	Target met.
Administered item 1.2.30 Exceptional Circumstances
Budget	$750.993 million
Key performance indicator	Fund income support and Exceptional Circumstances Interest Rate Subsidy for farm enterprises and small businesses that are viable in the long term but are in financial difficulties due to a rare and severe (Exceptional Circumstances) event.
Measured by	Effectiveness of delivery of EC income support through Centrelink. Effectiveness of delivery of EC Interest Rate Subsidy by Rural Adjustment Authorities.
2008–09 target	EC income support assistance delivered by Centrelink in accordance with program protocol. EC interest rate subsidy assistance delivered by Rural Adjustment Authorities in accordance with program guidelines.
Performance outcome	Targets met.

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Performance under departmental outputs in Output 1.2

Table 6 – Output 1.2 performance—departmental outputs

Key performance indicators	2008–09 target	2008–09 achievement
The number of farmers that changed industries, farming and business practices to be or remain viable in the long term as determined by surveys and program input and output data	200 EC Exit Grants approved	162 grants paid. Uptake of the exit grant was lower than originally expected, as a number of EC declared areas have been extended and farmers have remained on EC benefits.
	3000 Professional Advice and Planning Grant vouchers issued to new customers	2764 Professional Advice and Planning Grant vouchers issued to new customers.
	1000 Professional Advice and Planning Grant vouchers issued to existing customers	552 Professional Advice and Planning Grant vouchers issued to existing customers.
	75% of Professional Advice and Planning Grant vouchers redeemed	74% of funding from approved vouchers has been redeemed.
The extent that farm families, businesses and communities in target groups receive government support and manage through and recover from severe climatic events as determined by surveys and program input and output data	100% of estimated eligible clients in EC regions receive EC relief payments	100% of estimated eligible clients received relief payments.
	100% of estimated eligible clients in EC regions receive EC interest rate subsidies	100% of estimated eligible clients received interest rate subsidies.
	100% of estimated eligible clients receive short-term income support	100% of estimated eligible clients received short-term income support.
Contribution to the rural sector having improved access to agricultural and veterinary chemicals	Legislative changes to agricultural and veterinary chemicals registration in place and in operation by 30 June 2009	Amendment of regulations was undertaken. Legislative initiatives conforming to Early Harvest Reforms out of the Productivity Commission’s review of chemicals and plastics regulation were progressed.
Contribution to improved animal welfare outcomes through the production, export and marketing chain	Development, agreement to, and publication of, the Australian Animal Transport Standards by 30 June 2009	Standards developed and endorsed by the Primary Industries Ministerial Council in May 2009. Awaiting publication and implementation by state and territory stakeholders.
	Reports demonstrating identifiable improvements in animal welfare arrangements in targeted importing countries	Improvements in animal welfare arrangements continue in targeted importing countries
	The completion, in collaboration with the World Organisation for Animal Health, of the Regional Animal Welfare Strategy for Asia/Oceania by 30 June 2009	Implementation workshop held in November 2008 to draft an implementation plan. Representatives from seven regional countries, two international organisations and industry took part. The implementation plan will be considered for endorsement at the OIE regional meeting in November 2009.
Improved targeting and performance of rural R&D investment, particularly through establishing the Rural R&D Council and facilitating its development of a rural R&D investment plan and performance measure framework	Council to be operational by 31 July 2008	Council met for the first time in February 2009 and subsequently in May 2009.
	Investment plan and performance framework finalised by 31 December 2008	Development of investment plan and performance framework advanced.
Improved targeting and performance of rural R&D investment through ongoing improvement in the planning, reporting and evaluation process of rural R&D corporations and companies (RDCs)	RDCs provide more transparent reporting against more measurable performance indicators, and stronger evidence of achievements against stated objectives compared to 2007–08	First analysis under the joint RDC evaluation framework was published in November 2008. Negotiations of new funding agreements with two industry-owned R&D companies are nearing completion. These will significantly enhance governance frameworks, including program-based budgeting and reporting consistent with best practice.
Improved efficiency of rural R&D through an increased level of co-investment and collaboration by RDCs in major projects in national priority areas	Clear reporting and demonstrable evidence of increased co-investment and collaboration in priority areas in 2008–09 compared to 2007–08	All RDCs committed to developing the National Research, Development and Extension Framework and leading participation in sectoral and cross-sectoral strategies.
Support the horticulture industry to meet the challenges of competition and transparency of trade	Whole-of-industry strategic plan completed by November 2008	Whole-of-industry strategic plan to 2020 completed in January 2009 and released in May 2009.
Increased awareness by industry and the community of current and potential benefits from biotechnology and confidence in the management of associated risks, as indicated by surveys and qualitative assessments	30% increase in awareness in 2009 compared to 2007 survey results	No survey conducted in 2008–09. However, in 2008 GM canola was grown commercially in Victoria and New South Wales for the first time. Production of GM canola in 2009 is expected to be more than quadruple the 2008 plantings. Consequently there has been considerable discussion of the risks and benefits of GM crops by industry, the media and consumers. This has increased awareness of potential benefits from biotechnology crops.
	30% increase in confidence in 2009 compared to 2007 survey results	No survey conducted in 2008–09.
Successful transition to and operation of new wheat marketing arrangements	Multiple accredited exporters participate in wheat export market in 2008–09	23 exporters were accredited in 2008–09. One of these subsequently surrendered its accreditation.
Successful transition to a self-reliant dairy industry	Finalisation of Dairy Industry Adjustment Package	Dairy Industry Adjustment Package finalised. From 15 May 2009 the Commonwealth ceased transferring Dairy Adjustment Levy receipts to Dairy Australia Limited, which administers the Dairy Structural Adjustment Fund. The fund was wound up by 30 June 2009.
	Wind-up of the Dairy Adjustment Authority and removal of the Dairy Adjustment Levy by 30 June 2009	Dairy Adjustment Authority wound up on 31 December 2009. The authority’s annual report for 1 July 2008 to 31 December 2009 is included in this annual report (see Appendix 8). Dairy Adjustment Levy ended on 23 February 2009.
Encourage regional food processing and seafood industries to develop new technologies and adopt innovative production and processing methods through implementation of the Regional Food Producers Innovation and Productivity Program	First round of projects approved and funding agreements signed by 31 December 2008	First round of projects at final assessment stage. Funding agreements likely to be signed in July 2009.
Encourage productive and competitive irrigation industries that are equipped to manage reduced water availability	Irrigation Industries Workshop Program delivered and concluded by 30 June 2009	Program delivered and concluded.
	Murray–Darling Basin Irrigation Management Grants program delivered and concluded by 30 June 2009	Program closed to new applications on 31 March 2009. On 8 May 2009 the minister announced an extension until 31 December 2009 of the deadline to undertake eligible activities. This was in response to concerns about the availability of contractors following fire and floods in the Murray–Darling Basin.
Develop agreed Australian Government positions on domestic food regulatory issues contributing to an Australian food regulatory environment that enables a competitive and innovative food industry	Australian Government agreed positions presented at meetings of the Australia and New Zealand Food Regulation Ministerial Council in 2008–09	Worked with the Department of Health and Ageing to develop agreed Australian Government positions to be tabled at meetings of the council. Issues progressed included the development of policy guidance covering food labelling, fortification of food and infant formula. Progressed COAG food regulatory reform issues in collaboration with the Department of Health and Ageing and the Department of Finance and Deregulation.
	Australian Government agreed positions settled for notifications on food standards issued in 2008–09 by Food Standards Australia New Zealand	Liaised with the Department of Health and Ageing to develop agreed Australian Government positions on food standards notifications including proposals P1002—Hydrocyanic Acid in Cassava Chips and P306—Addition of Inulin/FOS and GOS to food; and applications A552—Cadmium in peanuts; A594—Addition of lutein as a nutritive substance to infant formula; and A577—Calcium in chewing gum.
Enhanced capability of Australian producers to promote premium Australian produce, including fruit and vegetables, pork and seafood, through the Promoting Australian Produce Program	First round of projects approved and funding agreements signed by 31 December 2008	First round of projects at final assessment stage, with funding agreements likely to be signed in July 2009.
Policies and programs assist wild fisheries and aquaculture industries to add value, become more productive and sustainable and support recreational fishing	Agreement to a revised Recreational Fishing Industry Development Strategy by 30 June 2009	Revision of recreational fishing industry development strategy commenced in February 2009. Consultation with stakeholders in four states completed. Delivery was slowed by the delay in forming a recreational fishing advisory committee and by the need for extensive consultation with stakeholders.
	Completion of an agreed policy position to facilitate aquaculture to be conducted in Commonwealth waters by 30 June 2009	Project plan for developing a legal framework for aquaculture in Commonwealth waters was developed in consultation with state and NT governments in May 2009. An options paper is being developed for the aquaculture subcommittee of the Australian Fisheries Management Forum will be used to determine a preferred approach. Facilitating aquaculture in Commonwealth waters is likely to require amendments to both state and Commonwealth legislation.
	The introduction of cost-effective leasing arrangements of Traditional Inhabitant Boat fishing rights in Torres Strait fisheries by December 2008	Torres Strait Regional Authority cost-effective leasing arrangements conducted in 2008 through an open market process to lease quota in the Torres Strait finfish (Spanish mackerel) and reefline (coral trout) fisheries.
	An increase from 2007–08 levels of the number of sustainable Indigenous aquaculture developments	In November 2008 Wanna Mar seafoods harvested the first of seven lines of mussels, producing 10 tonnes valued at approximately $15 000. Indigenous-owned Yorke Island Sponge Farm project commenced in April 2009. Additional Fisheries Research and Development Corporation Indigenous development scholarship sponsored in May 2009 specifically for aquaculture. This will increase Indigenous aquaculture leadership essential to the long-term establishment of sustainable Indigenous aquaculture ventures and increased Indigenous involvement in aquaculture.
	Agreement by stakeholders to a prioritised list of proposed amendments to Commonwealth fisheries legislation by December 2008	The department is currently liaising with Australian Fisheries Management Authority to determine legislative priorities. This is an ongoing task.
	Payment and final auditing of all recreational fishing grants by 30 June 2009	Around 88% of projects have been finalised and around 50% acquitted. Targets were not met as grantees experienced external factors that delayed project progress. Extension of the program to June 2010 has been approved.
	Identification of actions to overcome key impediments to the implementation of a marketing and promotion levy for the seafood industry by December 2008	Industry body Seafood Services Australia is gauging industry views on the marketing and promotion of a seafood levy. The company has been advised of the 11 levy principles that need to be met before the establishment of a levy. It has been asked to propose a model for the levy, which will be evaluated by the department before industry-wide consultation.
Policies and programs assist the fisheries sector to adjust to international and domestic market pressures and other pressures	Conduct independent audit of the buyback package for the Bass Strait Central Zone Scallop Fishery by September 2008	Two audits of the buyback process were conducted, one by Ernst & Young and one as part of a full audit of the Securing our Fishing Future structural adjustment program, including the licence buyback, by the Australian National Audit Office (ANAO). The Ernst & Young report was delivered to the minister’s office on 2 September 2008. The ANAO audit was tabled in parliament on 27 May 2009.
	Appointment of the new commissioners of the Australian Fisheries Management Authority by December 2008	CEO and commissioner appointments were finalised in March 2009 following a comprehensive assessment process.
	Completion of a Fisheries Climate Change Action Plan and agreement by the ministerial council by 30 June 2009	Draft Fisheries Climate Change Action Plan completed. It is expected to be considered by the ministerial council in 2009–10.
	Completion of all grant payments and subsequent auditing under the Securing our Fishing Future structural adjustment program by 30 June 2009	All grant payments for projects that have not been extended into 2009–10 have been completed. Subsequent auditing under the Securing our Fishing Future program by the ANAO and Ernst & Young has also been completed and responded to.
Departmental industry development programs assist forest industries to add value and increase exports	At least $40 million of investment leveraged by Tasmanian Community Forest Agreement (TCFA) grant payments	At the end of 2008–09, new investment by the Tasmanian timber industry valued at approximately $118.8 million was leveraged through the provision of TCFA grant payments in the hardwood, softwood and country sawmilling sectors.
	Establishment of a system to monitor the amount of value added Australian forest products and their contribution to exports of forest products over time	Project did not proceed due to other priorities.
Efficiency of departmental programs to complete the TCFA programs and commence implementation of Forest Industries Development Fund	All approved TCFA grant payments committed by 30 June 2009	TCFA Industry Development Programs finished on 30 June 2009. During 2008–09, $35.15 million was paid to grant recipients under the three TCFA industry development sub-programs, ensuring grant projects were completed by recipients by 30 June 2009.
	Forest Industries Development Fund guidelines and MOUs (where relevant) agreed with participating states by December 2008	Guidelines were developed by December 2008. No MOUs have been developed, as states and territories have not yet agreed to provide funding.
	Forest Industries Development Fund grants approved and funding commenced by 31 March 2009	10 grants were approved in April 2009 and four funding deeds finalised by 30 June 2009.

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Stakeholder consultations

The department consulted formally and informally with stakeholders on a wide range of key issues in 2008–09. Formal consultative activities relating to Output 1.2 included:

• meetings with the Dairy Industry High Level Group in October 2008 and February 2009 to discuss significant policy issues with representatives of Australian Dairy Farmers and Dairy Australia
• a discussion paper on the department’s review of the Livestock Export (Merino) Orders 1990 published on our website from February 2009
  and sent to industry groups and other major stakeholders
• a meeting with the Australian Meat Industry Council in November 2008 to discuss its submission on climate change, and to consult on the Sheepmeat Council report on the Senate inquiry into meat marketing
• teleconferences on the development of the National Research, Development and Extension Framework in January, February and May 2009 with state government officials and Meat & Livestock Australia
• Horticulture Code Committee meetings in December  2008 and March and May 2009, to gather expert views on possible implications of implementing Australian Competition and Consumer Commission recommendations to improve the Horticulture Code of Conduct
• post-project evaluations by 38 AgFund recipients, and phone surveys of seven Action Grant and three AgFund grant recipients, to gather grantee perspectives on project results and program administration
• biannual meetings with the CRDCC and with chairs and CEOs of individual industry-owned RDCs
• full- and half-day meetings between the Drought Policy Review’s Expert Social Panel and stakeholders—over 1040 peak industry, government agency and NGO representatives and individual business owners and producers—around the country
• Australia-wide consultations with industry stakeholders, environmental groups, farmers, landcare groups, catchment management authorities and state government representatives to discuss specific design features of the Carbon Pollution Reduction Scheme and agriculture and forestry issues following the release of the government’s green paper in July 2008.

Conferences

As part of the department’s engagement with communities of expertise and other stakeholders, our officers attended a number of external conferences and seminars. Examples relating to Output 1.2 are:

• annual conferences for industry stakeholders on grains, wine, produce marketing, mushrooms, citrus, almonds, vegetables, mangoes, bananas, meat processing, cattle and biotechnology
• regular conferences of the International Sugar Organisation and the International Cotton Advisory Committee
• an APEC Study Centre program held in September 2008 to enhance capacity in developing Asian countries to develop market-friendly agricultural trade reforms
• a World Vision Australia conference in December 2008 to examine global NGO approaches to food security challenges
• a consultative forum on agbiotech acceptance in September 2008, with representatives from 13 APEC countries
• the APEC High Level Policy Dialogue on Agricultural Biotechnology in Singapore in February 2009, at which DAFF’s manager for new and emerging technologies gave a presentation on growing GM crops in Australia
• Nanodialogue on Nanotechnology and Food Regulation, a conference in March 2009 for regulators, policy makers, researchers and industry and consumer representatives
• the Australian Dairy Conference Dairy Innovators’ Forum in February 2009, at which DAFF sponsored a session where seven leading industry innovators presented technologies to improve dairy farm performance
• the ATSE Crawford Fund Annual Development Conference in Canberra in September 2008, opened by the Minister for Agriculture, Fisheries and Forestry, with speakers including Professor Ross Garnaut and representatives from the World Bank, CSIRO and international research bodies.
• ‘Drought in a changing climate: sharing management approaches’, a workshop convened by the Australian National University for Australian and US academics, farmers and government and industry representatives, at which a DAFF officer gave a presentation on issues of importance in Australia’s drought policy review
• Greenhouse 2009, a conference on climate change convened by CSIRO and the Australian Climate Change Science Program, with sponsorship from Australia’s Farming Future for the agricultural sessions.
• the UN Climate Change Conference in Poland in December 2008, attended by 3000 government ministers and negotiators and industry and NGO representatives from all over the world, particularly useful for insights into the likely outcomes of international negotiations on the rules for land use, land use change and forestry for a post-2012 climate change agreement
• ‘Modern farmers—growing opportunities today, meeting the challenges of tomorrow’, a National Farmers’ Federation conference (with $50 000 sponsorship from Australia’s Farming Future) in June 2009.

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