Wednesday, 30 September 2015

Agricultural science funding in NZ

Recent job cuts at AgResearch have focused attention on the money that kiwi taxpayers spend on scientific research and its allocation. 

The CRIs get about $400m of public money each year and AgResearch is the biggest of them. Here are its sources of revenue for the last two financial years for which records are available ($m).

This chart strongly suggests that private funders are calling the shots at AgResearch. That hypothesis is reinforced by statements from AgResearch that cite "customer demand" as the motivation for the sackings. I could ask questions about this all night, but let's just try a few. 

  1. Why can't these commercial customers fund their own research without taxpayers subsidising them to the tune of $60m/year?  
  2. How exactly are farmers expected to benefit from this research?
  3. Which (if any) AgResearch programmes are entirely motivated by a desire to explore farming systems that might reduce the earnings of input (fertiliser, seed, pesticides) suppliers? 

Tuesday, 29 September 2015

My picks for DairyNZ Directors

Regular readers will know my views on DairyNZ's agronomy work, which seems remarkably aligned with the interests of input suppliers selling fertiliser, seeds and all of that "crop protection" stuff. Still, that's the mainstream model so I guess you'd expect it to dominate the research agenda. What really annoys me is the exclusion of work on alternative methods, especially ours.

Kudos to DairyNZ though: they've provided a forum to ask questions of director candidates. this was our question:
Despite the critical role of soil in pasture-based dairying, DairyNZ has no research efforts looking at how to harness/farm the biological life in soils. If elected, would you advocate for such research? Why or why not?
The answers helped us to pick who we'll vote for. They can be divided into 4 groups.

Michael Spaans (a sitting director) says that "biological life in soils specifically has had limited funding as research and theory historically has indicated there is no compelling evidence there are significant gains to be made for farmers in this area."

Nice one Michael: you are the first to be eliminated and now we're really sorry we voted for you last time. By pretending that this topic has already been investigated and found wanting you get the anti-science award, which is to be squashed by a cartoon foot.

Ask Someone Else
Kevin Ferris says "biological life in soils research should be done, under the umbrella of soil science, if DairyNZ is not doing it then another research provider should be doing it."

Murray Jamieson reckons "the best outcome will be achieved by working in collaboration across the industry i.e. with organisations like AgResearch and Massey and Lincoln Universities".

Greg Maughan "would not advocate for it if elected unless there was a compelling argument that the space was not being taken up by others and that the benefit of spending levy money was beneficial to a large number of farmers. I don’t believe DairyNZ should duplicate work that is being done or could be done by others.

Kevin Old wants to ensure that "limited research resources are both targeted at the most essential areas and are not duplicated in other institutions such as universities and CRIs who are also working in these areas."

All these guys (yes, they're all guys) are trying to pass the buck. They're pretending to care while actually hoping this topic will go away.

Business Case Required
Ben Allomes (a sitting director) is looking for "the best value to the industry. All projects, regardless of what area, are assessed on their value to the industry before they are approved or declined."

Elaine Cook "would need to see a business case for this R&D that identifies all the direct benefits (not just financial) to the NZ dairy farmer and wider industry."

Grant Wills "would support management to weigh up the economic and environmental significance of research in this area just as is being done on all other projects."

It's true that research funding needs a business case, but that case will always be speculative and risky because the discovery of new facts is the aim of all scientific research. DairyNZ should be exploring whole new paradigms because they might be better, and they should keep exploring them until they're convinced they won't be better. This is how innovation happens. 

Steve Hines says "Yes I would. The commercialisation of science has created an environment that limits our researchers’ time to seeking funds rather than answers and breakthrough technologies. Soil science has suffered as a result; we must focus more on the foundation block that our dairy systems are built upon."

Michelle Wilson "would certainly be asking the question regarding what DairyNZ  intent is in regards to research of biological life in soils. I would be advocating for this research as I believe it is an essential part of our environmental stewardship. As dairy farmers we have a responsibility to maintain the land for future generations, without relevant research we are unable to make the best decisions in how we care for New Zealand soils."

Well done Steve & Michelle: you get our votes and hopefully many others.

Since there are 3 slots available, we'll also pick Elaine Cook as the best of the rest on the grounds that she explicitly recognises broad categories of benefit and is less defensive and deferential than the others in her category.

Monday, 28 September 2015

Liquid fertiliser

We've been foliar feeding our pastures for a few years but things have really gone up a notch this season and the results are quite stunning.

We still design, mix & spread our own brews using that awesome kiwi technology, the tow'n'fert...

...but the other parts of the system have changed radically thanks to our new manager who knows much more about this stuff than us.

First is the difference between a slurry and a foliar. The slurry goes onto fairly short grass at a high rate (250kg/ha) which means we cover about 4ha in one load. This is how we always did it previously and we are planning more slurries at maize planting time. But since late May we've been focusing on foliars.

The foliar goes onto quite long grass at a low rate (90-100kg/ha) so it's a pretty fine mist. We're hitting paddocks 10 days before grazing. Over those 10 days the products get absorbed into the leaves and the plant has time to share some of the bounty with the soil biology by exuding it through the roots. After all this sharing has happened, we graze it off leaving fairly long residuals (1700 - 1800 kg). The re-growth is astonishing.

The mixes themselves can include almost anything because the tow'nfert keeps everything in suspension while we travel out to the paddocks and while we're spraying. Since we're still transitioning to a fully biological system we usually have about 10kg of urea/ha in the brew, along with all the other goodies (humates, fish, lime flour and sometimes also molasses and/or milk). The last 10ha mix had 500 litres of water and 400kg of product.

I know this probably all sounds quite weird to most kiwi dairy farmers but the results are obvious in the paddock. Round 2 is at least a week away and it's looking pretty damn good.

Friday, 4 September 2015

Competition law & economics

Competition geeks may be interested in the ACCC's successful prosecution of Visa over dynamic currency conversion (DCC) in Australia. Visa was fined $18m plus costs today.

As the economics expert for the ACCC in this case, I'm pleased with the outcome even though I missed out on being cross-examined at trial due to pre-trial settlement of liability. I do like a good argument.

Two points are of potentially broader interest... 

First, the conduct that was admitted by Visa occurred in a very narrow market: the market for currency conversion on the Visa network. If you follow the normal economic method of defining markets, then this really is a market. Its existence was vigorously contested by Visa's economist but prevailed in the end. 

Second, the ACCC abandoned its s46 claim in return for Visa admitting it breached s47. In announcing the result, the ACCC noted 
"the significant legal hurdle and complexity presented by proceedings under section 46"
So while it's nice for the ACCC to get a competition case win, this doesn't vindicate Australia's s46, much less NZ's equivalent s36. Misuse of market power remains problematic in the antipodes.