AgResearch forced to find work overseas

New Zealand's biggest science provider, AgResearch, says it is having to find work in other countries to meet Government demands for a 9 percent dividend.

At the same time, the Government is cutting funding for pastoral science and greenhouse gas research.

Chief executive Andrew West said AgResearch was helping Chile prepare a pastoral export strategy. He admitted some people might see it as helping the enemy.

"No, we're earning 9 percent. The shareholder wants 9 percent – it's our job to earn it."

Scientists and farmers said they were concerned by the move. Scientists' spokesman John Hickford said: "Who are they meant to be working for? Isn't it for the benefit of the taxpayer? The farmer?"

Federated Farmers president Don Nicolson said he did not "get it". "Why put money into the Crown research institutes and then rip it out?"

However, Science Minister Wayne Mapp said AgResearch's funding shortage was not as dire as it seemed. It could apply for funds through the Primary Growth Partnership and would soon be hosting a new greenhouse gas emission research centre. He said it was not unusual for Crown institutes to do international work.

Dr West said AgResearch would not meet the 9 percent target this year but the Government had told it to do so next year.

"It wants its 9 percent, irrespective of the fact it is cutting our funding. So, you have to get your skates on and go around the world to find it."

He said AgResearch was targeting South America and China.

"You end up working for other countries, other governments and other corporations. You end up with your best scientists working for other countries solving their problems. That's the way it goes – you go where the money is."

He said he was not complaining. "It's business."

However, funding for pastoral science, the "engine room" of the economy, would be cut 7 percent next year. Greenhouse gas research funding was being cut 15 percent this year, even though a new research centre was being set up. Start-up funding provided by the Government for that would be negated by the research cut. The result would be more job cuts, he said.

Another possible casualty could be wool research. Farmers recently voted to stop paying a wool levy and now AgResearch had to make a decision whether to stay in wool research.

"We're getting mixed messages from the Government on this. They want the 9 percent and they want us to stay in wool. But you can't have both. It's whether we want to save $4 billion in export receipts from the hill country or whether we want to make 9 percent."

He was sceptical about the value of the Primary Growth Partnership. "Research is only one of six activities covered, so it is not the panacea we were hoping it would be."

AgResearch made a pre-tax profit of $9 million in the year to July 30 on gross revenue of $155m, but after restructuring, which cut 57 jobs, and tax that turned into a $754,000 loss. Return on equity was 0.7 percent.