Recognition

The Urgency Of Levy Reform

Author: Brian Croser
Source: WBM
Review Date: Jul 2022

The CSIRO has sort of announced the redundancy of at least three senior scientists, experts and researchers in grapevine genetics and physiology at the Adelaide CSIRO offices located at the Waite Research Institute.

A further number of technical support staff and rumour has it more to come, have been or will be laid off in parallel.

In all 12 contract positions and 12 permanent staff are to be terminated.

The Adelaide Advertiser quoted that CSIRO’s excuse for the slash and burn of viticultural staff is the reduced funding from Wine Australia due to the China sales impact on levy revenue and the new focus of Wine Australia on “shorter term impact return on investment”.

In the mix is the new corporate demand from CSIRO, that for them to support a project it requires at least 70 percent of the funding to come from the industry benefitting from the research.

That’s a formula for making the successful large industries ever more successful and blunting the advancement of emerging and struggling industries.

In the Australian wine community’s case, why not kick it while it is reeling from unearned Chinese retribution?

According to The Advertiser article, “The cuts impact research into berry development, grapevine function, grapevine physiology and rootstock breeding.”

Those are the very areas of research that the Australian wine community needs to adapt its vineyards to climate change and to improve wine quality in a competitive global market.

I am angry!

I am angry at the CSIRO for being so arbitrarily callous, decimating the viticultural research team at the Waite, in one stroke making redundant the Australian wine community’s most important resource of vine genetics and vine physiological research.

I am angry with Wine Australia for not prioritising vine genetic and physiological work and failing to persuade CSIRO not to take this precipitous action.

Wine Australia surely understands that we need the capacity to breed new disease resistant vines and better rootstocks.

They also surely understand that research to further understand the physiology of grape ripening is necessary to enable better control over the ripening time in a warming climate.

Why then the focus on “shorter term impact”, as claimed, when the pressing need is to answer the big questions posed by climate change requiring a longer-term focus?

This outcome also points to the paucity of wine community people on the Wine Australia board.

The defence of creating influence across federal and state statutory organisations by having overlapping board members on the Wine Australia board at the expense of industry people has been put to the test with the CSIRO decision and has failed, probably for good governance reasons.

I am angry at this generation of Australian grape and wine producers for not grasping the nettle of levy reform and for allowing the levy revenue and research capacity to decay.

We are the first generation of Australian vignerons to fail to meet the needs of our research and education institutions and in doing so we are limiting our future.

Meanwhile our overseas competitors are spending more on research of vine genetics and vine physiology in recognition of the priority of these disciplines in growing vines that can weather the effects of climate change, meet the low chemical input demands of society and make better wines.

I am angry at my impotence to influence these outcomes; the immediate appeasement of industry factions is not more important than our future.

Anger doesn’t help!

What is required is the cool and clear-headed advancement of a research and promotion levy reform and levy increase strategy, to more equably distribute the levy load, to restore some research investment capability and to futureproof the levy against the loss of value of money over time.

We will not retrieve the treasure trove of viticultural expertise and experience that CSIRO are currently determinably dismantling.

I return to the levy reform proposal I enunciated in December 2021 in WBM.

In a nutshell the proposal was for a 1.6 percent levy based on the five-year average value of the Australian grape crop, divided between the inland average grape price and the average price of the cooler coastal region fruit.

In 2021 this would have raised a levy of $20.64 million, divided two-thirds for research ($13.8 million) and one-third for the promotion of Australian wine ($6.9 million). This compares with the levy under the current system based on tonnes, of a total of $19.01 million, $12.1 million for research and $6.9 million for promotion.

The 14 percent increase in research levy would restore some of the very significant loss of spending power over the past 18 years since the last levy increase.

Currently, based on tonnes, the inland producers pay 71 percent of the levy and the cooler coastal producers pay 29 percent.

The value-based levy proposal raises 54.5 percent of the levy from the cooler coastal producers and 45.5 percent from the inland producers, restoring equity.

A further incentive for a change from volume to value is that in the China tariff punishment aftermath, most of the significant amount of crop left unharvested in 2022 was in inland vineyards.

This combined with low prices on offer for those grapes in the future and the high demand for other irrigated food stuffs, almost assures a structural adjustment and Australia’s grape crop is likely to fall in volume.

This would further reduce the research levy.

The decrease in the value of the Australian grape crop will be a lot less than the decrease in volume.

A value-based levy is insulated against the loss of value of money over time.

This change needs to happen rapidly and decisively to avoid further erosion of the globally envied research and education capacity we have at the AWRI and in our universities, following the path of the disastrous CSIRO decision.

I am hoping Adelaide University and the AWRI can find roles for Drs. Ian Dry, Chris Davies and Mandy Walker, those researchers retrenched by CSIRO, put back to work mentoring the next generation of researchers in vine genetics and physiology.

Between them, they represent irreplaceable decades of experience and achievement.

Ironically the University of Adelaide and the AWRI are planning a radical research vineyard and teaching and research winery expansion to primarily explore among other things, the genetic and physiological control of the grape vine to reliably produce better quality wines in a warming climate.

On the one hand our major research and education institutions are looking to a future defined by climate change, relying on research of grape vine genetics and physiology to provide amelioration and on the other hand CSIRO and Wine Australia have combined to decimate the existing capacity in those valuable disciplines.

We need to do better than that.

The Australian wine community deserves better than that but only if it gets on with the type of levy reform proposed here.

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