Wheat Breeding In Australia Where Are We Going?

Figure 1: Australian wheat yields 1879-1998

There is considerable debate on the future of wheat breeding in Australia temming from farmers' concerns about the available resources, federal competition and deregulation policy, the user-pays principle, concern about 'the bush' and the GRDC's call for expressions of interest. The way forward for wheat breeding must ensure continued benefits for farmers and consumers.

Australian wheat yields are increasing (Figure 1), whilst farmers' terms of trade are falling (Figure 2). Recently wheat yields have averaged 1.75 t/ha and production is about 20 million tonnes.

Figures 1 and 2 raise many issues for wheat-breeding policy, which should stimulate debate among policy makers, plant breeders, farmers and marketers on the effective use of scarce resources for wheat breeding.

Wheat yields in Australia have increased significantly over the period 1879-1998. National wheat yields are affected by: widespread but short-term climatic trends that deviate from average; management improvements (timeliness, improved weed control etc.); and genetic improvements.

Fitting a regression to a moving average reduces seasonal effects. The rate of improvement in farmers' fields this year is likely to be between cubic and quartic estimates (average yield gain = 29.26 kg/ha/yr), similar to Stephens (1997) estimate of 30 kg/ha/yr. If half this gain is due to genetic improvement (open to debate), then wheat breeding is increasing yield by 15 kg/ha/yr. On 1.75 t/ha, this is 0.86 per cent per year.

Figure 2 shows farmers' terms of trade. The mean estimate from the linear and quadratic equations for 2000 is 2.61 per cent per year. This value is larger than the total production increases in farmers' fields (1.71 per cent) and considerably more than the genetic gain for yield (0.86 per cent). It is no wonder that farmers complain about wheat varieties.

To maintain their financial position farmers need a genetic gain of 1.3 per cent per annum and a further 1.3 per cent gain from crop management. On top of this, the cost of breeding adds a further 0.75 per cent, making a total of 3.35 per cent/year.

By 2020 yields must double

It any real improvement in the farmers financial situation is to occur, a further increase is needed, say 0.25 per cent. Thus to slightly improve real returns for farmers, production needs to increase by some 3.6 per cent per year. The implications for wheat breeding are clear. The rate of genetic (and management) $$ returns must lift significantly for farmers to enjoy better times.

The rate of genetic improvement for quality is more difficult to assess as the detailed data for different segregations are confidential. However the importance of grain quality to capture high-value markets is increasing.

How large a wheat-breeding activity can we afford?

The cost of wheat breeding was estimated by adding GRDC investment ($10 million per year) to the estimated contribution of the breeding organisations (2 x GRDC contribution). This gives an estimated cost of $30 million per year. For a genetic gain of 0.86 per cent at $200/t, the annual return to Australia is: $34,400,000 {0.86 (per cent) x ($)200 x 20,000,000 (t)}. All increased value from yield improvement goes to fund breeding.

This makes companies that retain 75 per cent of any increased value for themselves with 25 per cent going to the producer look positively philanthropic. Hopefully, the insurance value of better quality and tolerance of stresses goes to farmers. Also the impact of not breeding would be to provide competitor nations with a major advantage.

Focus on national approach

All major wheat-breeding programs in Australia are locally based, public, quasi-monopolies, responding to political as well as market signals. Selection is local although wider testing of advanced lines may occur. There is little incentive to increase potential market size or encourage the uptake of varieties bred elsewhere.

But for future survival, breeding organisations will need large markets for their products. Programs must be national (and preferably international). This strategy also minimises commercial risks associated with local poor seasons and loss of market share.

A good target cost for a competitive, commercial, national wheat-breeding program at equilibrium would be $6-10 million per year. The actual amount would vary with the commercial success of any individual program.

Figure 2: Farmers terms of trade
Figure 2: Farmers terms of trade

End-point royalties and integration

Successful use of end-point royalties will ensure a rapid move to a far more commercial approach to wheat breeding in Australia. This will be driven by the entry of commercial wheat-breeding activities into Australia. If public organisations are to compete effectively they must use the current breathing space to re-organise on commercial lines.

Besides providing a real choice of varieties for farmers, taking a national approach and increasing the rate of genetic gain, public breeding organisations must integrate their activities, get economies of scale and reduce costs by building on each other's strengths.

Issues that need to be resolved now

The policy issues are: how much can we afford to pay for wheat breeding in Australia and how is this best invested?

The technical issue is: how do we ensure increases in genetic value per annum of at least 2.05 per cent and preferably 2.3 per cent in farmers' fields?

The managerial issue is: how do we align investment requirements with technical options to ensure that we get the best outcome?

All suggestions welcome.

Contact: Dr John Hamblin 08 9368 8750 email: jhamblin@egc.net.au