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Fewer grapes mean a tighter R&D budget

Australia’s severe drought and associated water restrictions mean not only tougher times for grape producers but also a tighter budget for the industry’s principal funding body, the Grape and Wine Research and Development Corporation (GWRDC).

This is because the GWRDC depends on revenue from production-based industry levies which are matched by Australian Government funds. When production is down, so too is R&D income.

According to the latest Annual Report of the GWRDC, $24.5 million was invested in grape and wine R&D projects in 2005–06, a year when grape production was 1.8 million tonnes and yields were generally described as average. While vintage 2007 is yet to be completed the production downturn is likely to mean a shortfall of between $5 million and $10 million in what would normally have been projected as R&D revenue this year.

Production is expected to fall in irrigated as well as non-irrigated areas due to reduced water allocations which are likely to continue until at least 2007–2008.

GWRDC executive director Dr Jim Fortune said the GWRDC Board would review the overall budget outlook, examine how best to manage reserves and cash flow, identify areas of priority research, and consult with stakeholders.

“There will be a need to wherever possible limit the impact of the drought on research programs,” he said.

“In early January the GWRDC alerted all levy payers and research partners of the potential effects of drought and irrigation restrictions on R&D revenue.

“This communication is continuing as the full impact of the drought on grapegrowers and winemakers, their families, service industries and research providers becomes clearer.”

Dr Fortune said the mission of the GWRDC was to enable a profitable and sustainable future for the Australian wine industry through strategic investment in research.

“We will continue to pursue this goal, addressing industry strategies as well as key priorities such as those determined by the Australian Government, which matches industry R&D levy contributions,” he said. “This requires a close working relationship with all parties. Researchers, for instance, have been assisting the process of evaluation by providing progress reports a little earlier than usual.

“The GWRDC Board next meets late next month, at which time the budget situation will be clearer and consideration will be given to how the GWRDC can best manage reduced R&D funds so that there is minimum disruption to broad R&D strategies.”

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