Research and Development Corporations

Research and development corporations (RDCs) are the Australian Government’s primary funding bodies for rural research and development (R&D) in Australia. The Rural Research and Development Corporations cover a broad spectrum of the agricultural, fishing and forestry industries.

The RDCs invest in R&D and innovation to improve the productivity and delivery of high quality products in order to underpin the competitiveness and profitability of Australia's agricultural, fish and forestry industries.  RDC R&D and innovation also supports the sustainability of primary production and the natural resource base.

The government-industry partnership model that supports the RDCs has been operating successfully for over 20 years and now provides more than $470 million in annual R&D expenditure, including around $247 million from industry and $218 million from government in matching contributions (2008–09 financial year figures).

Based on legislated or industry funding agreements, the Australian Government agrees to collect industry levies for the purpose of R&D and/or marketing. To expand Australia’s rural R&D efforts, the Australian Government generally matches expenditure on R&D up to 0.5 per cent of industry Gross Value of Production. The RDCs are accountable to both industry and government for their expenditure.

The RDCs are a mix of statutory bodies and industry-owned companies (IOCs) – there are currently six statutory RDCs and nine IOCs. All undertake R&D activities and the IOCs also undertake marketing activities.

The legislation underpinning these bodies provides the broad framework for their operations and reporting and accountability obligations.

The Primary Industries and Energy Research and Development Act 1989 sets out arrangements for the establishment of statutory RDCs and the preferred structure for the administration of their R&D program funds. It also sets out the reporting and accountability obligations for statutory RDCs. Amendments to this Act are being considered as part of the government implementing the Rural Research and Development Policy Statement.

The Commonwealth Authorities and Companies Act 1997 (CAC Act) is part of the financial framework that underpins the appropriation, expenditure and use of money and resources within the Australian Government. It is an important feature of an accountable and transparent public sector and informs the daily work of Australian Government agencies, office holders and their employees. Statutory RDCs are required to comply with the requirements of this Act.

The IOCs are declared by the minister as an industry service body under industry specific legislation. They are established under, and must comply with the provisions of, the Corporations Act 2001, which sets out the obligations of companies and their boards of directors.

The key accountability framework for IOCs is set out in the SFAs signed with the Commonwealth. These SFAs are required to allow funds appropriated by Parliament to be provided to the IOCs and to ensure that the funds are spent for the purposes for which they are appropriated, essentially for the delivery of marketing and research and development (R&D) services. Agri-political activities are not allowed under the SFAs. 

IOCs’ industry specific legislation

Industry name

Industry legislation

Australian Egg Corporation Limited

Egg Industry Service Provision Act 2002

Australian Livestock Export Corporation Limited (LiveCorp)

Australian Meat and Livestock Industry Act 1997

Australian Meat Processor Corporation

Australian Meat and Livestock Industry Act 1997

Australian Pork Limited

Pig Industry Act 2001

Australian Wool Innovation Limited

Wool Services Privatisation Act 2000

Dairy Australia Limited

Dairy Produce Act 1986

Forest and Wood Products Australia

Forestry Research and Development and Marketing Act 2007

Horticulture Australia Limited

Horticulture Marketing and Research and Development Services Act 2000

Meat and Livestock Australia

Australian Meat and Livestock Industry Act 1997

The department’s role

The Minister for Agriculture, Fisheries and Forestry is responsible for administering the primary legislation that governs the RDCs and has delegated this responsibility to the department. The department, in particular the industry policy areas, advises the minister on RDC matters. The minister is ultimately accountable to Parliament.
The fundamental principles governing the department’s approach to corporate governance responsibilities and its oversight of portfolio agencies are:

  • the individual agency is primarily responsible for ensuring the quality of its own corporate governance and
  • the department’s oversight of these agencies is not to duplicate nor lessen the agencies’ governance responsibilities.

The department does not direct the RDCs in their operations (that is the domain of the RDCs’ boards of directors) but takes a support role to:

  • assist RDCs in meeting legislative requirements and in complying with their SFAs, including providing guidance to RDCs on better practice administration
  • assist the minister to discharge statutory and parliamentary obligations with respect to the RDCs.  This includes providing advice on the operations of these agencies and their accountability of funds
  • continue to reinforce and promote the concept that the RDC boards are responsible and accountable for the operations / governance of that agency
  • continue to refine the SFA template to ensure that it meets the needs of the Commonwealth
  • ensure the RDCs have a framework to deliver R&D and marketing to underpin the competitiveness and sustainability of portfolio industries
  • administer the flow of levy funds
  • implement R&D policies as directed by the minister