12/10/2026
GRDC from Farthing to Fortune by WAFarmers CEO Trevor Whittington
Australia’s roughly 20,000 grain growers are locked into a compulsory research model almost unique in the wider economy. No other major sector is required to surrender a fixed percentage of gross revenue to a statutory research corporation. Australia does not impose a compulsory one-per-cent levy on the value of iron ore, gold or lithium to fund a statutory mining R&D corporation.
So why agriculture — and after 35 years of GRDC, should growers finally be asked two basic questions: how much should they pay, and who should control the organisation spending their money?
Understanding how we got here is worth a brief trip back in time.
Foot-and-mouth disease outbreaks in 1801, 1804, 1871 and 1872, together with repeated black stem rust epidemics through the nineteenth century, encouraged farmers, agricultural societies and colonial governments to build agricultural science capacity. Experimental farms, field stations and agricultural colleges followed, with Australia’s first agricultural college, Roseworthy in South Australia, established in 1883.
William Farrer initially financed his own wheat-breeding work before being appointed Wheat Experimentalist by the NSW Government in 1898. His rust-resistant Federation wheat was released in 1901.
Western Australia was the first State to formalise a voluntary grower contribution under the Soil Fertility Research Act 1954, allowing growers to authorise deductions from grain payments for local research. Compulsion followed in 1957 when the Menzies Government introduced the Commonwealth wheat research levy at one farthing per bushel, initially about 0.14 per cent of wheat value.
The levy rose gradually over subsequent decades, reaching 45 cents per tonne by the late 1980s, equivalent to roughly 0.3 per cent of wheat value.
The next major structural change came in 1989, when the Hawke Government introduced the Primary Industries and Energy Research and Development legislation. Previously, research levy funds flowed through the Wheat Industry Research Council and State committees, with much of the research undertaken by State departments of agriculture. Under the new model, statutory Research and Development Corporations such as GRDC could commission research, prepare multi-year plans, employ staff and accumulate reserves.
The Coalition Opposition supported the new PIERD model but raised concerns about accountability to growers and argued that voluntary commercial contributions to industry R&D should also qualify for Commonwealth matching support.
At the same time, the research levy moved from a flat cents-per-tonne charge to an ad valorem levy. Within a few years the research burden rose from roughly 0.3 per cent of wheat value to 1 per cent — more than tripling the rate. Parliament debated the new levy framework, but the 1 per cent research component was subsequently determined through the Grains Council of Australia rather than a direct ballot of levy-paying growers. The rationale for such a large increase in compulsory research funding has largely been lost in the mists of time.
What has not been lost to time is the fact that growers still have no regular direct vote on the levy rate, while Commonwealth matching does not extend dollar-for-dollar across the full grower contribution.
The imbalance remains today. The grains R&D levy is 0.99 per cent of value, while the Commonwealth effectively caps its matching contribution at around 0.5 per cent of industry gross value of production. Growers are therefore compelled to contribute at almost twice the percentage at which Commonwealth matching reaches its ceiling.
In 2024–25 growers contributed $237.9 million to GRDC while the Commonwealth contributed $134.3 million, providing almost two-thirds of the combined funding. At the very least, it proves that the government understands the law of diminishing returns which is why it caps its contribution to half a percent.
That question matters even more because the Grains Research and Development Corporationarch environment has changed dramatically since the levy was created. Much of today’s genetics, machinery, software and farm technology is developed internationally and bought through commercial markets. Yet the levy remains based on a model created when agricultural research was far more domestically focused.
Nor should one per cent of gross revenue be dismissed as trivial. Recent Planfarm benchmarking indicates average grain businesses are generating returns of around 3 per cent before tax and drawings. What looks insignificant as a percentage of turnover looks very different against farm profitability, particularly in years of compressed margins. Demanding growers hand over a third of their surplus to fund the universities would never have passed a vote if farmers had been given the opportunity.
GRDC’s balance sheet raises another question. Its reserves are heading towards a billion dollars. At what point does GRDC define the reserve it actually needs and justify all the marginal dollars it spends by cost benefit analysis.
Nor is it enough simply to cite analysis suggesting returns of $6–$9 for every dollar invested. If the marginal return on the next levy dollar were genuinely that high, the argument should be for a 2 or 3 per cent levy, not a lower one. GPA’s 2022 levy review concluded the R&D component could be reduced without materially affecting GRDC’s delivery, which sits uneasily with the suggestion that every additional levy dollar continues to generate the headline $6–$9 return.
There is also a distributional question. New technology and cutting-edge agronomy are not adopted evenly. Larger, better-capitalised farms are generally better placed to test and extract value from new research, while less profitable businesses may be constrained by debt, scale or the inability to finance adoption.
ABARES data show the largest 10 per cent of broadacre farms accounted for 56.3 per cent of output between 2021–22 and 2023–24. That does not prove redistribution from slower adopters to progressive farmers, but it does raise a legitimate question about who captures the benefits from marginal R&D compared with who is compelled to finance it.
The counterfactual is just as important. If GRDC did not fund a project, would the innovation disappear, arrive later, or emerge anyway through private companies, universities, CSIRO, overseas researchers or growers themselves?
The proper comparison is what Australian grain production, productivity and profitability would look like without GRDC, with growers retaining their levy money and relying on private R&D, overseas technology, publicly funded science and their own investment decisions.
If GRDC is confident the present levy delivers returns of $6–$9 for every dollar collected, it should commission a genuinely independent economic study of that counterfactual. It should examine the marginal return on the current levy rate, the distribution of benefits, the contribution of overseas and private R&D, and the return growers might have earned had the money remained on farm.
There remains a strong case for compulsory funding of biosecurity, exotic disease, pre-commercial science and uniquely Australian agronomic problems. The case is weaker where benefits are global or commercially captured.
Australian levy-funded research is readily accessible to Russian, Argentinian and Canadian grain growers, while many productivity gains identified decades ago remain unrealised at home. Acidic soils still need lime, compacted soils need amelioration and non-wetting soils remain untreated. Given the choice, many growers may prefer a $30,000 investment on-farm to a $30,000 compulsory R&D contribution.
International comparisons further complicate the case for a near-one-per-cent levy. A British cereal grower pays 58 pence per tonne, equivalent to around 0.3 per cent of crop value at wheat prices of £180–£200 per tonne, and that levy funds not only research but market development, benchmarking and knowledge exchange.
Canadian growers typically pay around 0.3–0.4 per cent of crop value. US state assessments are broadly similar: Kansas and North Dakota charge US2 cents per bushel, equivalent to roughly 0.3–0.4 per cent at typical wheat prices, while Montana’s 2.5 cents per bushel equates to around 0.4–0.5 per cent.
These charges commonly fund research alongside marketing, extension and advocacy, and many are refundable. Australia’s 0.99 per cent GRDC levy therefore sits at roughly two to three times the rate commonly imposed in several major competitor jurisdictions.
A levy that began at around 0.14 per cent of wheat value has grown to 0.99 per cent. Growers contribute well beyond the Commonwealth matching ceiling, GRDC controls reserves moving towards a billion dollars, competitor countries generally impose lower compulsory research burdens, and levy payers themselves do not regularly get to vote on the rate.
The question, therefore, is not whether Australia should abandon agricultural R&D. It is whether a compulsory R&D tax designed for another era — set at more than twice the rate paid by many of our competitors, difficult to quarantine for the benefit of Australian growers, and never directly approved by grain growers — remains fit for purpose in 2026.
Perhaps it is also time to revisit who controls GRDC. MLA became industry-owned in 1998 and AWI in 2001. GRDC itself examined moving away from the statutory model in 2014, when an independent governance review found its structure constrained agility and commerciality and contemplated an eventual transition to an industry-owned corporation. The issue was again referenced in GRDC’s 2019 independent performance review, but the transition never occurred.
Moving GRDC into grower ownership would inevitably challenge established interests, including those whose businesses and careers depend on the existing grains R&D structure. After 35 years as a government controlled statutory corporation, growers should at least be asked two questions: how much should they pay, and who should control the organisation spending their money?