Expected 90 lay-offs at AgResearch 'pretty fatal blow' to research, says scientist Edmeades

The expected layoffs of about 90 science staff at AgResearch, the country's largest Crown research institute, is a "pretty fatal blow" to agricultural research, says Doug Edmeades, a Waikato soil scientist.

Mr Edmeades, himself a former AgResearch scientist, said he was told by a current staff member that 19% of the CRI's researchers would be made redundant this Thursday due to a drop in funding.

Waikato University agribusiness professor Jacqueline Rowarth said she had originally been told 82 staff were being laid off but that number had shifted to between 80 and 100, or 20% of the 500 or so research staff.

"I've heard there are whole groups going because they are not engaged – it's not that they are not engaged in their science but in the way they are required to operate and the science system," she said.

AgResearch chief executive Tom Richardson was unavailable for comment and the body's public relations staff didn't return calls.

The move follows today's announcement from Fonterra Cooperative Group that is was making a further 227 staff redundant globally, taking total job losses from its business review started in December to 750. The jobs cuts would result in a one-off cost of $33 million and generate direct annual savings of $103 million a year, a Fonterra spokesman said.

The previous 523 redundancies in July incurred a one-off cost of between $12 million and $15 million while saving up to $60 million annually. They follow a downturn in global dairy prices, which has slashed the cooperative's farmgate milk price for the 2015/2016 season to $3.85 per kilogram of milk solids, well below the cost of production.

Mr Edmeades said he didn't think the AgResearch lay-offs are related to the dairy downturn; rather they follow a general downward trend in the amount of government funding on agricultural research.

"What's happening is crazy when the biggest industry in New Zealand is agriculture," he said. "This has been coming for some time and they put if off and put if off while awaiting the outcome of some funding proposals. Obviously the answer they got was no."

Professor Rowarth said science was continuing to struggle in New Zealand because of reduced government funding, the competitive nature of the funding allocation model and the erosion of independence it had created.

"The result is a science system under considerable stress, increasing public mistrust of results, and a decrease in engagement in science subjects at school," she said in a recently published article. "In New Zealand, both current and future capability is evaporating. For agriculture, which continues to form the basis of the export economy, the implications are dire."

AgResearch's half-year report flagged that the CRI was unlikely to hit budgeted full-year revenue, primarily due to an unforeseen decrease in revenues from Ministry of Business, Innovation and Employment and Primary Growth Partnership-related contracts. The report said the board and management were continuing to "explore opportunities to replace this revenue and expenditure controls remain in place".

The group posted $63.7 million of revenue for the six months ended December 2014, down $5.2 million on the same period the previous year and below budgeted revenue of $69.9 million. It had a net deficit of $5.9 million, $1.1 million more than at the same time last year.

Professor Rowarth said she thought the cuts to be announced this week were separate from AgResearch's Future Footprint restructuring plan first announced in 2014. It will see 250 jobs from Hamilton and Dunedin shift to Lincoln and Palmerston North.

A March report by the Auditor-General into the Future Footprint project found an October 2012 business case for the plan was sufficient to support the decisions to proceed, appropriate guidelines had been followed by the board to manage conflicts of interest, and that a small number of reductions of scientists and technicians between 2011 and 2014 was not inconsistent with the overall trend in the CRI sector.

AgResearch is a state-owned CRI which aims to enhance the value, productivity, and profitability in New Zealand's pastoral, agri-food and agri-technology sector.

(BusinessDesk)