Find information on the Annual General Meeting 2016

The Horticulture Innovation Australia (Hort Innovation) Annual General Meeting (AGM) has concluded for another year!

Many thanks to all the growers, members and industry stakeholders who contributed to this year’s highlights for the company and horticulture as a whole.

All of the resolutions voted on were past and the company’s Constitution will be updated to reflect those changes.

Hort Innovation is the grower owned Research and Development Corporation for the Australian horticulture industry. Growers are our most important stakeholders and we encourage you to continue to be involved with the company.


AGM Questions and answers

The following questions were faxed to Link Services prior to the AGM and responded to during the official AGM proceedings. 

MEMBER

Stephen Spear

Taylors Arm, NSW (Banana)

QUESTION

I have been a member of HAL/HIA subcommittees since the inception of the Banana National Levy. During that time, I have listened to and read many R&D project reports. In all of these there is appropriate acknowledgements to HIA, QDAFF, BQ, NSW DPI, ABGC etc. I find it disappointing that there is no acknowledgement of the levy paper who is the most important cog in the whole process i.e. voted for the levy and provide the initial funding for most projects.

Can HIA develop a suitable logo for all of Horticulture so that the role of the levy payer is also recognised in all project reports?

ANSWER

All projects (including final reports) have levy payers recognised in the funding statements for all levy investments. The company is owned by levy payers and as such the Hort Innovation logo represents all levy payers.

As Hort Innovation is one of 15 research development corporations (RDCs), the development of a logo of this kind may be best tabled at the wider RDC level. Hort innovation will raise it at the next RDC meeting of communication professionals for discussion. This meeting is scheduled for February 2017.

MEMBER

Colin Stumm

Comboyne, NSW (Avocado)

QUESTION

Did the New Zealand (NZ) avocado growers contribute money to the avocado advertising programme for TV this year?

If not, why not?

ANSWER

Yes but not through Hort Innovation. The on-air advertising season was extended through the direct purchase of media by NZ avocado growers.

MEMBER

John Tyas

Holland Park, QLD (Avocado)

QUESTION

Why does the financial information about the industry levy programs not include the amount of levy reserves being held for each industry levy?

ANSWER

Financial statements published for industry levy programs include all levy reserves being managed by Hort Innovation. These financial statements appear, and can be sourced from, each of the grower pages on the Hort Innovation website.

MEMBER

John Tyas

Holland Park, QLD (Avocado)

QUESTION

(A) Did HIA maximise the matching funding from the Australian Government in 2015-16 and what GVP value was the cap based on?

(B) The amount of matching funds, $41.75M, is less than the amount of matching funds that HAL received two years ago, $41.9M (2013-14 HAL annual report).

(C) However, the amount of R&D levy received in 2015-16($29.6M), is 20 per cent more than was received two years ago which would indicate substantial growth in the value of industry.

ANSWER

(A) Yes, the allocation of Australian Government funds made available to horticulture through Hort Innovation was optimised in 2015-16.

(B) Total contributions received based on eligible R&D were $87.4M. This was reflected in the Annual Report financials as R&D Income of $41.75M and Other (Corporate Matching Income) of $1.96M – totalling $43.7M which is half of $87.4M. This was actually an increase on 2013/14.

(C) Levies received do not necessarily proportionally reflect the gross value of production for industry because of a number of factors:

*All levies in horticulture (bar one) are based on a formula of volume and are therefore not a percentage of the industry’s production value;

*The government’s calculation of gross value of production is based on an average over three years; and

*During 2015-16 there have been changes to the total makeup of levies received by Hort Innovation with two new levies introduced, as well as changes to the rates of some existing levies.

MEMBER

John Tyas

Holland Park, QLD (Avocado)

QUESTION

Why is co-investment revenue (Page 141 of the Annual Report) lower in 2016 than in 2015 when the program is supposed to be increasing?

ANSWER

Co-investment revenue outlined on page 141 of the Annual Report refers to the cash flow of the company and therefore shows when the monies were physically received, rather than accrued. Funding was received in 2014-15 relating to program expenditure incurred in 2015-16.

MEMBER

John Tyas

Holland Park, QLD (Avocado)

QUESTION

Why did Voluntary Contributions more than double from 2015 to 2016 when this program is being phased out? Are there any VC projects that are not listed in the Annual Report?

ANSWER

Included in Voluntary Contribution (VC) income in 2016 is the receipt of $9M from the Australian Government’s Rural R&D for Profit program.  Additionally, the figure for 2015 is not for the full financial year so shouldn’t be viewed as a direct comparison. The Annual Report reflects VCs received by the business.

MEMBER

John Tyas

Holland Park, QLD (Avocado)

QUESTION

Why is there no information about the individual levy programs available on the HIA website (as at 16 November 2016, almost 5 months from the start of the year)?

ANSWER

Our ambition is for the website to be a comprehensive resource centre for all growers – especially those that pay levies.

The type of information that is currently available about individual industry levy programs on the Hort Innovation website includes:

  • Published quarterly financials for each levy program
  • Published quarterly project expenditure summary
  • A quarterly update via the Hortlink publication that includes recently contracted investments
  • Lists of final reports

Individual industry annual reports are being prepared and will be made accessible via the website as they become available.

As our systems are progressively upgraded, Hort Innovation hopes in time to be able to provide searchable access to all historical project data and deliver better ‘real-time’ information for growers.

If any grower would like to provide feedback on the Hort Innovation website, please get in touch via communications@horticulture.com.au, or by calling a Relationship Manager or the communications team on 02 8295 2380.

MEMBER

John Tyas

Holland Park, QLD (Avocado)

QUESTION

What are HIAs plans in relation to establishing levy payer registers? Will they be established?  Will they be established for the whole of horticulture or on an individual industry basis?  What industry consultation is proposed?

ANSWER

Hort Innovation has a self-declared levy payer register that is reflected in its Member Register.

Discussions with the Australian Government are taking place at a wider level around the government’s legislative change regarding levy payer registration across all of agriculture.

The Department of Agriculture and Water Resources has now employed a dedicated resource to work with industry on the implementation of any resulting changes. As with other RDCs, Hort Innovation has been approached to provide input. At this time, the Board has made no consideration around what the implications might be for horticulture.

The following questions were faxed to Link Services prior to the AGM but were not received by Hort Innovation.

MEMBER

Chris Joyce

Potts Point, NSW (Nursery, Pistachio)

QUESTION

Expert Advisory Panels

Is the presence of two Hort Innovations executives on each and every Expert Advisory Panel an inherent conflict of interest?

Are these Hort Innovations employees inevitably bound to follow the directives of more senior executives and the Board? How can such a conflict be resolved?

What expertise do the Hort Innovation Fund Managers provide to these Advisory Panels? What expertise do these employees have in the fields of each Panel on which they serve?

ANSWER

Panellists for each Expert Advisory Panels were appointed through an open expression of interest process and an independent evaluation, from which a recommendation for each panel was made to Hort innovation and approved by the Board.

The involvement of employees on the relevant panels is fundamentally to facilitate the functioning of each panel. The Funds Manager ensures that there is input and clarification provided to the panel on funding rates and/or any other investment process logistics. The rationale for the relevant Relationship Manager for the fund to be involved is to ensure that due process is followed by the panel.

The concern of conflict of interest is noted, and as with other Hort Innovation advisory panels and with any typical meeting room, the management of actual, potential and perceived conflicts of interest that may arise from time to time is always governed by a process of full disclosure.

MEMBER

Chris Joyce

Potts Point, NSW (Nursery, Pistachio)

QUESTION

Members

The Annual Report (p26) states the Hort Innovation has close to 2,000 “members”. How many growers have joined Hort Innovation as grower members? What percentage is this of horticulture grower who are estimated to be eligible to be grower members of Hort Innovation?

How many grower members have completed the necessary paper work to vote at the 2016 Annual General Meeting?

What is the number of votes that are eligible to be cast at the Annual General Meeting?

What are the number of grower members and the number of eligible votes not more readily available?

ANSWER

82 per cent of Hort Innovation members are levy paying grower members.

A total of 221 annual levy returns were received from levy payers this year. This number is down on last year’s participation and part of the reason that there was a resolution put to the AGM to change the annual levy return process will make the process less burdensome for growers and was subsequently passed by the meeting. 15 per cent of our levy payer members returned their Annual Levy Returns and were eligible to vote today. The total number of votes issued was 1,184.

To the best of our knowledge, the rates of member participation are about even across all the RDCs, although we believe the rate of participation by Hort Innovation members might be slightly higher.

MEMBER

Chris Joyce

Potts Point, NSW (Nursery, Pistachio)

QUESTION

Across Industry Fund

The Annual Report (p58) shows that Hort Innovation spent $1,484,923 on Across Industry projects. The Projects are listed on Page 124. The funds for the Across Industry are compulsorily removed from the Industry levy stream at 2.25 per cent of levies collected, ie., these projects are funded by growers.

How are decisions made on the investment of these grower funds? In making the decision to contract for such projects, what collaboration or discussion took place with growers?

Has Hort Innovation established, or attempted to establish, a Strategic Investment Advisory Panel for the investment of such grower funds?

ANSWER

The majority of projects funded by Across Industry money are legacy investments contracted under the previous HAL organisation and were based on advice provided to HAL by the Across Industry Committee. It is understood that the majority of these investments will expire in the calendar year 2017.

Since the formation of Hort Innovation, three investments have been using Across Industry funds and were based on advice and input received by the Board through the many and varied consultation engagements with growers during the development of the company’s strategic plan. They are:

  • Fruit fly – phase 2 of the funding of the National Fruit Fly Strategy Council as a continuation of the legacy investment commenced under HAL.
  • Industry Statistics – the compiling and production of the Horticulture Industry Statistical Handbook
  • Trade – funding of the operations of trade assessment panels that provide industry advice on market access and trade.

Over the next year the Board will deal with the issue of investing Across Industry funds when the majority of the current legacy investments expire.

MEMBER

Chris Joyce

Potts Point, NSW (Nursery, Pistachio)

QUESTION

Levy Payer Workshops

The Annual Report (p20) states that the Levy Payer Workshops “contributed towards the compilation of the company’s inaugural Strategic Plan”.  The Workshop that I attended (Richmond, January 2016) consisted of a number of growers from many industries raising an endless stream of “bile” against the performance of Hort Innovation (to use the term used by the Hort Innovation appointed facilitator).  Only about 15 minutes was spent putting yellow stickies with values against about 20 possible projects, none of which were discussed.

Reports of the other levy payer meetings were that they also largely consisted of growers expressing dissatisfaction with the performance of Hort Innovation with little discussion on strategic planning.

How did the Richmond meeting of growers contribute to the compilation of the Company Strategic Plan?

ANSWER

The purpose of the Levy Payer workshops was three fold.

o   To inform levy payers of the progress of Hort Innovation’s transformation particularly the implementation of new Advisory, Procurement and Investment mechanisms.

o   To confirm that business as usual was taking place and the organisation with its new structure, constitution, SFA and board was in fact on track to invest more in the transition year than any previous year.

o   To highlight the emergence of the Pool 2 (strategic co-investment) funds, following extensive industry consultation and that four funds had been confirmed and several more were being considered.

While some workshops were better attended than others, the process did seek to create the opportunity for all growers in all major growing regions to participate.

Following the levy payer workshops, a transcript and answers to many questions were published on the Hort Innovation website for all stakeholders, especially growers. Further, the input of the levy payer workshops contributed directly to the development of the Hort Innovation strategic themes focused on:

  • Communicating and listening to growers, because the advisory mechanisms, consultation and communication are a key function of Hort Innovation,
  • Delivering on the investment portfolios, because knowing that the investments are happening and delivering value is most important to all growers, and
  • ·Developing a strong culture and leadership for all of horticulture because this contributes to the sustainability of all horticultural industries.

The development of the 11 cross-sectoral themes represented what is common to the present and future investment for all of horticulture.

In summary, all of the consultation processes throughout 2015 and early 2016 directly contributed to the development of the Hort Innovation Strategic Plan. We are grateful for all of the time growers invested to contribute to the various consultation mechanisms to ensure the strategic plan represented the majority of views.

MEMBER

Chris Joyce

Potts Point, NSW (Nursery, Pistachio)

QUESTION

Voluntary Funded Industries

Several industries have long operated without compulsory levies. These industries have been able to raise funds for research and development on a voluntary basis and have been supported with government funds through HRDC, HAL and, initially, Hort Innovation.

In October 2015, about 10 months after commencing operations, Hort Innovation reversed its “voluntary contribution” system and demanded that these voluntary industries enter into a complex, and expensive to operate, Combined Industry Fund arrangement.

Only in the last month, about two years since Hort Innovation commenced, have the first voluntary industries finally entered into these CIF arrangements.

Why did it take Hort Innovation from October 2015 to January 2016 to produce the first draft of the required Agreement?  Why was the first and subsequent drafts so poorly drafted that it required a further six or more iterations before completion?

Voluntary Contributions were defined within the initial Hort Innovation Statutory Funding Agreement of 2014.  Why did it take Hort Innovation almost two years from its inception to conclude a structure for the voluntary industries?

Is it correct that at least one voluntary industry has resolved that the Hort Innovation CIF system is too difficult and will leave the umbrella of Hort Innovation?

ANSWER

Hort Innovation offers Collective Industry Funds (CIFs) as an alternative to the process of applying to commence a statutory levy, and for those industries with an existing statutory levy as an opportunity to add to this levy and enable greater investment opportunities.  The way in which the CIF product would be structured and operate was the subject of necessary discussions and consideration both within Hort Innovation and with the Australian Government over a period of time.

In operation of CIFs, Hort Innovation is accountable to the Australian Government for the administration and expenditure of CIF funds as if those funds were a levy.  Therefore, Hort Innovation has put in place a governance structure for the collection, strategic planning, and application of the funds commensurate with these responsibilities.  These governance measures are in place to protect not only Hort Innovation, but also the horticultural growers contributing funds to a CIF.

A body proposing to collect CIF funds from industry and submit these to Hort Innovation must enter into a Collective Industry Fund Agreement that sets out the rights and obligations of both parties to this arrangement.  The Agreement was produced in consultation with Hort Innovation’s external legal providers, and Hort Innovation rejects the suggestion that the Agreement is poorly drafted or represents an unnecessary level of governance.

The various iterations of the CIF Agreement produced by Hort Innovation in the process of establishing the Pistachio CIF were driven by PGAI in the course of negotiating the terms on which Hort Innovation was willing to enter into a CIF arrangement.

Hort Innovations makes no apology for insisting upon adherence to best-practice governance measures to protect grower’s investment in the future of their industries.

The following questions were put to the Board of Directors from the floor of the AGM. The responses detailed below are a combination of the verbatim reply provided at the AGM and additional information that assists with clarity.

MEMBER

Chris Joyce

Potts Point, NSW (Nursery, Pistachio)

QUESTION

With respect to funds invested within the across-industry program, what consultation was undertaken with growers and industry in selecting the new projects using these funds?

Was this the project that you undertook (sic) to have in place by the first quarter of this financial year, in which we are now in the second quarter of this financial year?

How accountable is HIA for the expenditure of that $1.7M worth of grower levy funds?

In addition, there is no mechanism in place as to what you are going to do with the 2.25 per cent of levy funds you are now collecting – which presumably will be ongoing – there is no mechanism in place where there is any consultation on the spending of that money unless you are about to tell us about it.

ANSWER

This question was also submitted as a written question by Mr Joyce and responded to above.

 

MEMBER

Tania Chapman

Mildura, VIC (Citrus)

QUESTION

Of the Director nomination selection process that we have had last year and this year, which will now see no director election required next year, how does the constitutional changes that have just been passed impact from here going forward? Does that mean that next year there will be an election or no election? When does that three-year rotation start to come through?

ANSWER

The three-year rotation cycle will commence in 2018. Therefore, two years from now that process will move forward and it will operate with the same formula that we have had over the past two years – both appointed directors and elected directors.

MEMBER

John Tyas

Holland Park, QLD (Avocado)

QUESTION

Could you clarify the number of members (2,021) – are they levy paying grower members?

ANSWER

This question was also submitted as a written question by Mr Joyce and responded to above.

MEMBER

Stephen Spear

Taylor Arm, NSW (Banana)

QUESTION

Of that 80 per cent how many filled in the appropriate form so they could vote today and could you tell us the total vote from the proxy forms. There was at least 534, what did the final tally get up to?

Is that a common percentage? That works out at about 240 members only voting. Is that a common thing across most of these organisations?

ANSWER

Aspects of this question were also submitted as a written question by Mr Joyce and were responded to in the meeting and outlined above.

MEMBER

Chris Joyce

Potts Point, NSW (Nursery, Pistachio)

QUESTION

The Board has appointed five expert advisory panels to guide the Board on its investment in Pool 2. Each of those committees has two executives of Hort Innovation as members of the panel. Is it a conflict of interest that Hort Innovation employees are sitting on the expert advisory panels? Are those employees somewhat beholden to their senior officers and the Board as to what their advice may be to the Board; and if you wanted expert independent advice why have you got Hort Innovation executives actually on the committee? I understand why Hort Innovation executives would be providing technical support and advice to the committees but they are members of the committees. Hort Innovation has made a big play and one of the disruptions that you refer to earlier today of reorganising the PIBs was to remove any potential conflict of interest that Hort Innovation has gone on about. Doesn’t this constitute a conflict of interest?

ANSWER

This question was also submitted as a written question by Mr Joyce and responded to above.

MEMBER

Richard Stephens (acting as a proxy)

Windsor, NSW (Turf)

QUESTION

Page 51 of the Annual Report outlines Hort Innovations investment priorities. In your opening comments, you say how part of the Hort Innovation vision is farm-gate profitability, yet how come farm gate profitability does not feature in Hort Innovation’s investment priorities?

The reason why I bring this up is that this investment priorities checklist is being used to determine the suitability of projects and yet improving farm-profitability is not there and it should be.

ANSWER

Farm profitability is the obvious end-game. All the initiatives and the intents strategically bind a result of delivering better returns for growers at the farm gate. This objective overarches the whole organisation.

This point will be taken on board, thank you for noting it.

MEMBER

Mark King

Pomona, NSW (Dried Grape)

QUESTION

When will the SIAP chairs be announced?

ANSWER

The successful appointees have been notified. The list of the appointees and their biographies has been published on the Hort Innovation website.

MEMBER

Richard Doggett

Numulgi, NSW (Macadamia)

QUESTION

(comment) As a member of Hort Innovation, I would like that there be a sense of urgency from the administration. We have a situation in the Northern Rivers where we have been fighting segastus weevil for two years now and I spoke to Hort Innovation the other day saying that we need something done in the research and development area and the answer I got was ‘there is a meeting on 8 December to have a meeting to discuss it’. Now as a grower that is not good enough for us. So I implore you, please John, please get some urgency into these things because if you don’t … you know we never had these issues before that’s why we went to the PIBs (sic). You are, as far as I am concerned, our PIB. If you don’t act on it then we are going to have to do something else. So please take that on board.

ANSWER

Since the AGM a meeting took place on 8th December to update industry and coordinate greater efforts in this area. Hort Innovation is taking heed of the issue and the current research and development status is in supporting:

  • Better orchard hygiene extension and area wide management – Crop scouts, NSW DPI, IPM Technologies, BioResources
  • Investigating suggested relationship between management of macadamia lace bug management, which is sprayed with Bulldock, Exirel etc at first flowering, and Sigastus prevalence (especially when orchard hygiene is lacking) –  NSW DPI
  • Out of season flowering and nutset increases weevil populations – looking at appropriate chemical and non-chemical management options to break the life cycle of the pest including inter row management, tree architecture etc – NSW DPI, BioResources
  • Looking at control with Entomopathogens Metarhizium and Beauveria spp- USQ (dedicated PhD Student), DAF, NSW DPI
  • Pheromone development for lure and possible kill – USC, SCU, NSW DPI, DAF
  • Selected insecticide trials underway including Dupont’s Avitar – Indoxicarb; minor use permit application in for Lancer (Acephate) – NSW

MEMBER

Bill Bulmer

Lindenow, VIC (Vegetable)

QUESTION

(comment) Firstly, congratulations to the new Board members and to the old ones that contributed to the industry.

Thank you.

There is undoubtedly frustration amongst certain sectors and farmers within this whole organisation, but it is up to us as farmers and representatives of Peak Bodies throughout the country in our different organisations, to go back to our growers and emphasise the fact that without the levy money and the R&D that goes into all these projects, we will end up in a very big black hole in years to come if we don’t get off our own butts and support this industry and support this organisation.

As I said, I understand there are frustrations in sectors but it is up to us as growers and representatives to do our part as well. I would just like to say that to everyone — we can all sit here and fire bullets but make sure that you have a good look down the barrel first and you are not shooting yourself in the foot.

So, to the Board, well done and keep up the good work.

ANSWER

As a Board, we try to play unifying role (for the horticulture industry) as much as we can. Given the wide diversity that exists, It is often challenging in horticulture to do that but I think we are making steps. There have been frustrations but any grower can call Hort Innovation and work through any frustrations. The Board members are available to members and will take on any feedback.

MEMBER

Richard Stephens (acting as a proxy)

Windsor, NSW (Turf)

QUESTION

(comment) I know the Turf industry and some other industries have had some issues with projects going out to tender that don’t quite seem to fit what the SIAP thought was going to go out to tender. As a result, I would like to suggest that before finalisation of a tender goes out that there is a check back process with the SIAP before it actually goes out because that hasn’t happened to date and that has caused problems.

ANSWER

Advice sought from SIAPs is an integral process preceding the procurement process. These comments are noted and we will investigate how an appropriate feedback loop can occur to ensure that all tenders reflect the scope and outcomes as they have been advised through the SIAP.

For those members who chose to ‘make a day of it’, they were treated to an information seminar before the official AGM proceedings.

Beyond the farm-gate: building better connections” showcased the insights and talents from the next generation of movers-and-shakers in the horticulture and food domain.

Audiences were treated to presentations from:

Scott Penn: Influential member of the weight-loss industry for almost 20 years.
Eat better – live longer

Kylie Kwong: One of Australia’s most respected chefs.
“Spreading the word about Australia’s fresh produce”

Thomas Astell-Burt: Associate Professor in Public and Population Health in the School of Health and Society at the University of Wollongong.
“Keeping healthy and out of hospital”

Emma Germano: General Manager of I Love Farms, a family run mixed farming operation supplying domestic and international markets.
“Going the future”

Jan Vydra: Founder of Australian Fresh Leaf Herbs, a leading Australian herb grower and distributor and 2011 Young Farmer of the Year.
“Why I became a farmer”