Intent Corporate Statement of 2018/19 –2022/23 01 Financial Statements G36

Driving prosperity by transforming agriculture

Chair and Chief Executive overview 04 Our strategic direction 06 The AgResearch Science Plan 08 Driving revenue through research 10 Strategic Science Investment Funding 12 Animal Science 14 Forage Science 18 Farm Systems and Environment 24 Food and Bio-based Products 28 Building our future 32 Taking our research to the world 34 Margot Forde Forage Germplasm Centre 35 Māori Agribusiness 36 Vision Mātauranga 38 Our people 40 Curiosity Fund 41 Outreach – Telling the AgResearch story 42 Financial results 44 Non-financial targets 46 Miscellaneous items 48 Chair and Chief Executive overview

Agriculture, and the export products produced, is the backbone of the economy, and the value of those exports continues to grow.

In the year to 30 June 2018 it is expected to Emissions Trading Scheme, adapting to climate generate export earnings of over $25 billion change, and building regional economic through dairy, meat and wool alone. The lift in prosperity. We see a clear role for our science value of these products is contributing to the to assist in all of those areas. overall expected export earnings of $42.2 billion from the wider primary industries sector, which We continue to support the Government’s employs over 140,000 people. action plan through various mechanisms including the new Climate Change Commission, To support that success in the future, High Value Nutrition Science Challenges, innovative science is needed. There has been research-based support tools like Overseer no time in recent decades that will prove and Farmax, and hosting the Our Land more critical for research to play a role than and Water national science challenge. now. We must use our considerable scientific capability to realise opportunities and counter Our integrated research approach sees us the challenges which threaten New Zealand’s working directly with land-owners as they economy and regional prosperity. consider their choices for best land use in the future. In particular, we see this through AgResearch, as the our growing Māori agribusiness sector (CRI) primarily charged with engaging the engagement, and the early success of our pastoral, agri-food, agri-technology and collaborative programmes including that which environmental stakeholders with thought- we recently celebrated with Te Tumu Paeroa. leading scientific options, is fully engaged in both creating new opportunities and providing To ensure we continue to meet these options. We are working hard to build on and challenges, our science must be agile and refine current practices to grow the economic adaptable. This document reflects our new contribution that the sector makes, and Science Plan which more clearly articulates improve its environmental performance. our focus on the two prongs of developing sustainable farms systems and practices, This Statement of Corporate Intent outlines the and the creation of high value food and bio- framework for the research we will undertake based products. in the coming five-year window of 2018/19 – 2022/23, which we have designed through Together the new Science Plan and this close engagement with these stakeholders and Statement of Corporate Intent outline how our national and international collaborators. AgResearch intends to deliver our strategic goals, and how this leverages international We are acutely aware of the Government’s relationships and collaborations. These are priorities – improving New Zealand’s helping define detailed future workforce environmental performance, demonstrating planning, a project currently underway in international leadership in areas like livestock conjunction with other CRIs.

Chair and Chief Executive overview Chair and Chief Executive greenhouse gas emissions, refining the

04 ensure and our enabling research is supporting have AgResearch we At our to focus evolved products. food and new enhancegreatly environmental sustainability that and technologies systems, novel farm in areas like animal actively more much welfare, We are seeing leading businesses investing Zealand’s New for and fibre sectors. food are opportunities creating new technologies new of evolution consumers’The and preference toorder progress issue. this critical We are continuing conversations these in inresulted positive discussions to date. systems and environment systems research has area of farm mechanisms important the for Employment (MBIE) into investment of Business, Ministry the Innovation and by review We recent that the are pleased AgResearch Acting Chair, Dr Paul Reynolds

New ZealandNew world. and the will our significant havework the for impact progress on and to reporting We forward look key partners. organisationown our with and in conjunction across of ways both working, ourfor our new buildings catalyst are the important These –Lincoln and Massey. partners university of our closest two with spaces in partnership collaborative work best-practice designed have we where Lincoln North, and Palmerston significantbuilding our two programmes in includes That underway. many projects exciting have we in this outlined and as document, research, continue to deliverour world-class we through picture, that bigger work we As success Zealand’s of New exporters. economic the and therefore those preferences, AgResearch Chief Executive, Tom Richardson 05 05 FinancialChair and Statements Chief Executive overview Our strategic direction

AgResearch’s purpose is to drive New Zealand’s prosperity by transforming agriculture. By working with stakeholders and the wider sector it has developed a clear strategy to achieve that.

There are two key focus areas in AgResearch: the agricultural sector to have the confidence on-farm and off-farm science. But in that the research to support new sustainable essence it is much broader. AgResearch’s systems and practices has taken into account capability allows touch points right across the way the end product will be developed the agricultural value chain which, when and how the consumer will view that the thinking is applied from a consumer- value chain. centred point of view, ensures the research AgResearch delivers drives the best economic Without the end product and the willing outcome and impacts for New Zealand. consumer, the agricultural chain has no purpose. AgResearch’s integrated strategic The strategy is to provide that integrated approach connects the dots to ensure the support. AgResearch works in all areas end result is economic prosperity for from soil health to forage development, New Zealand’s agricultural sector, and animal welfare to food processor support, therefore supports the country’s wider food safety and bio product development economic success.

Our strategic direction – connected and linked, enabling those in

06 Driving prosperity by transforming agriculture

Impact Increasing the value of New Zealand’s exports, while enhancing our environment and regional prosperity by optimising land use.

smartest and Our consumer– most sought- most sustainable centred science drives after food and farming systems the world’s... bio products

Our Value Proposition Partner to identify the innovation that is needed, and use the collective expertise to create value for New Zealand.

07 The AgResearch Science Plan Putting our strategies in action.

Our Science Plan has been overhauled this year with the aim of breaking down the siloed approach within research, to provide an outcome and objective-focused framework. The change and redefinition of research focus demonstrates AgResearch’s adaptability and agility against a backdrop of changing priorities for the community and the new Government’s priorities.

The outcomes it will drive our research It must take into account the ‘value web’ towards are clear. New Zealand wants: – where is the end product going and where • Protected, enhanced and sustained has it come from? We must work back from natural resources what the consumer wants and what the final • Agile, resilient and adaptive social and product of the agricultural chain becomes. biological systems • Profitable and sustainable land-based Animals and forages are not the end rural enterprises points to boosting New Zealand’s prosperity, • Added-value foods and bio-based but they have input. Understanding that products that meet consumer needs and knowing how AgResearch science can play its part is how we will succeed. From We know New Zealand is well placed to soil scientists to food safety researchers, transform current food production systems AgResearch has the science capability to to meet these needs. It falls to AgResearch to apply critical thinking right across the enable this transformation through providing value chain. the scientific advances that will support these new systems. These scientific advances take As with our current Science Plan, the time, therefore our Science Plan must meet refreshed version will be used to guide New Zealand’s short, medium and long the science that we will do, our internal term needs. investment, and reinforce the behaviours we will need to deliver our vision. It will The Science Plan is constructed to meet the be embedded with the principals of needs of a New Zealand food production kaitiakitanga, which reflects our focus sector utilising the world-class research on Vision Mātauranga. capability across AgResearch’s four science groups – Animal Science, Food and The objectives outlined here will form Bio-based Products, Farm Systems and the framework of measurements for our

The AgResearch Science Plan AgResearch The Environment, and Forage Science. programme of work.

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09 The AgResearch Science Plan Driving revenue through research

About one quarter of AgResearch’s research is funded solely by industry and commercial partners. These critical relationships enable our scientists to work on specific industry needs and to address challenges particular to the businesses which support agricultural prosperity.

This is not just research that local industry on Government funding. We also work hard seeks, but also includes larger collaborations to ensure AgResearch benefits from licensing with international partners and other research fees and royalties our science generates, organisations. Our role is to create a unique which in turn provide an enduring, success- commercial advantage for our clients, with based income stream that allows us to our innovative research and internationally re-invest in science. recognised thought-leadership. Our Partnerships and Programmes team Working closely with these partners gives us is the critical link here, connecting our insight to their specific approach to market scientists to industry clients while ensuring opportunities and issues, meaning our relevant intellectual property is identified, research is tailored to their needs. captured, maintained and best leveraged for AgResearch’s benefit. The contractual obligations which come with this commercial work often means we are Attracting commercial clientele of this nature unable to discuss the research until the final reaffirms our position as world-leaders in product has made it to market, and, with our ultimate areas of focus; creating smarter, some contracts, we are sometimes unable to sustainable farming systems and the world’s share our involvement publicly at all. most sought-after food and bio products.

Growing this area of our research portfolio is important for AgResearch as the revenue this work generates allows us to reinvest in our organisation and our scientists, and to be able to do so without absolute reliance Driving revenue through research

10 Curly hair Facial filters AgResearch worked with Japan’s Kao To help combat the increasing concern Corporation cosmetics company to learn about air quality, AgResearch worked with more about what makes human hair curly. fibre innovation company Lanaco to develop Using merino wool, the curvature of wool was innovative pollution masks that protect the measured before it was stained and transferred everyday health of users. Using natural wool, to a confocal microscope to reveal the curl’s the technology traps harmful substances cell structure. With the global hair care market before the users breathe them in, as well estimated to be worth over $85 billion, this as being easy to breathe through. discovery could contribute to the design of Lanaco’s products include a range of masks novel hair products. by Auckland firm Healthy Breath working with leading fashion designer Karen Walker. Infant milk formula It has long been recognised that there are differences between human milk and infant formulas which lead to differences in health and nutrition for the neonate. Our study with Bright Dairy and Food Company looked at similarities and differences in the profiles of human milk and infant formula. Our findings identified some aspects of conserved function between bovine and human milks which contribute to the effectiveness of modern infant formula as a substitute for human milk. Driving revenue through research

11 Strategic Science Investment Funding

AgResearch uses its assigned contribution from the Strategic Science Investment Fund (SSIF) to explore and innovate new systems, practices, process and products right across the agricultural value chain.

Our research priorities enable us to deliver Our research is aligned to our two strategic integrated solutions; we can target consumer drivers, and therefore the work we undertake and market needs by developing food will fall under one of two areas – to improve productions systems that generate foods the way land is used through smarter, that are high quality, ethically and sustainably sustainable, integrated systems, or to add produced, nutritious and support health value to the agricultural chain as a high value and wellbeing. food or bio product.

Each year we receive $38.4m SSIF funding Our scientists are focused on delivering to through two defined platforms – AgriFood these two strategic drivers by excelling in their Production ($26.4m) and Premium specialist fields, while working closely with their Agri-Foods, Products and Services ($12m). colleagues and peers across the organisation, the sector and with other collaborators. This funding is allocated to projects across The ability to excel in these specialist areas our four science groups, and as the new while working across a mature matrix structure Science Plan is implemented, a natural across four campuses is our point-of-difference, alignment with its objectives will be clearly and ensures our research is world-renowned. aligned to each project within our broader programme of work. Separately we receive Across the next five financial years, the projects $470,000 to host and manage the Margot outlined will enable AgResearch to deliver to Forde Germplasm Centre as a Nationally its Statement of Core Purpose, and drive New

Strategic Science Investment Funding Strategic Science Investment Significant Database and Collection. Zealand’s prosperity by transforming agriculture.

12 Strategic Science Investment Funding Strategic Science Investment

13 Animal Science

Our scientists find ways to improve the nutrition, health and welfare of livestock for efficient and sustainable animal production. With expertise in the parasitic and infectious diseases of pastoral livestock, we understand the necessary processes behind healthy, productive and efficient ruminant livestock.

The Animal Science group encompasses a Our research covers the spectrum of wide range of disciplines, with the purpose of fundamental to applied science that focuses improving the nutrition, health, quality traits and on high quality science-driven research. We reproductive performance of animals to achieve have access to fully-equipped dairy, sheep and efficient and sustainable animal production, beef farms with modern facilities for on-farm and delivery of high quality animal products. animal trials, and fully equipped animal facilities We use a broad range of nutrition, physiology for more detailed trials for small and large and genomics-based research tools to improve ruminants, including the NZ Ruminant Methane economically important traits such as survival, Measurement Centre. Our laboratory facilities growth rate, health, fecundity, meat and milk are well appointed to support the range of production (yield and quality) and disease research undertaken. resistance while minimising environmental impact and use of chemicals in ruminant Our Animal Science teams: livestock production. • Animal Nutrition & Physiology • Animal Health Our teams have recognised expertise in the • Rumen Microbiology parasitic and infectious diseases of pastoral • Animal Genomics livestock, animal genomics, ruminant nutrition • GenomNZ and animal physiology including reproduction • Animal Reproduction and microbiology behind healthy, productive • Animal Welfare

Animal Science and efficient ruminant livestock.

14 Animal Science SSIF Project highlights FY19

Project Animal welfare for market success

Scope assist Ministry of Primary Industries to develop We aim to reduce specific areas of welfare standards and regulations. By engaging widely risk to New Zealand’s animal-based economy and disseminating the research results nationally and to provide knowledge that can be used to and internationally, we will strengthen New guide farming practices, maintain freedom to Zealand’s reputation in animal welfare here operate, improve market success and ultimately and abroad. enhance animal welfare on New Zealand farms. SSIF Platform: This programme comprises a mix of Agri-Food Production fundamental H3 horizon research that will maintain our world-leading understanding Key stakeholders and partners: of animal welfare and build capability to Ministry for Primary Industries, Dairy NZ, NZ address shorter term industry issues as they Poultry Industry arise. The outcomes from this research will have a long-term impact, providing guidance FY19 funding: and management recommendations for $1,232,000 producers and processors on best practice and highlighting potential areas of welfare risk. Project timeline:

The research generated by this project will also Animal Science

15 Project Bringing the best of genetic evaluation to the New Zealand agricultural industry

Scope Key stakeholders and partners: This programme will provide science Beef and Lamb NZ Genetics (BLG), Focus leadership, key capability and novel technology Genetics, Landcorp and the Wagyu breeding developments to support genetic gain in programme underpinning First Light Foods national herds and flocks. This will be achieved by a providing access to a resource flock, FY19 funding: providing availability of all existing data and $800,000 phenotypes. Project timeline: SSIF Platform: 2013 – 2019 Agri-Food Production

Project Ruminant nutrition

Scope significant global reference databases, such as We will use a multidisciplinary approach, the Hungate1000 and Global Rumen Census. employing state-of-the-art knowledge This knowledge will allow new technologies and technologies, to gain an integrated and management recommendations to understanding of feed-microbiome-animal be developed. We will grow national and processes and interactions in early life. This is international collaborations and strategic where pregnant animals and their offspring, industry partnerships to accelerate delivery of as well as artificially-reared neonates, are at science outcomes for the dairy and red meat the highest risk of adverse outcomes and pastoral industries. suboptimal development and programming in New Zealand’s farming systems. SSIF Platform: Agri-Food Production Our research will identify key factors and mechanisms that meet the nutritional Key stakeholders and partners: requirements of pregnancy, the physiological Beef and Lamb NZ, Parkinson Estate (PhD), and production implications for the dam Dairy NZ and the survival, health and growth of her offspring. The role of feed-microbiome-animal FY19 funding: interactions in the survival, health and growth $1,100,00 of artificially-reared young ruminants and their future performance will be evaluated. Project timeline: The efficiency of rumen function will also 2015 – 2022 be investigated, further building upon our Animal Science

16 Project Animal health

Scope market needs, where consumers and regulators This programme of work is designed to develop require the use of less drugs, while at the same information and technology for use time maintaining a high level of animal welfare. by farmers that will result in resilient farms that have low chemical inputs and superior SSIF Platform: animal welfare. Agri-Food Production

The projects cover a wide range of livestock Key stakeholders and partners: health issues – from undertaking research Beef and Lamb NZ, Landcorp, Polybatics, to identify new biopesticides against ticks, Ministry for Social Development to continuing the vaccine development pipeline that is aimed at significantly reducing FY19 funding: anthelmintic and antibiotic use. $2,176,335

The outcomes we are expecting will enable Project timeline: New Zealand farmers to sustainably meet 2015 – 2019

Project Dairy reproduction

Scope in dairy cattle through understanding the The overarching objective of this work is to underlying causes of poor fertility and using improve the profitability of the red meat and this knowledge to improve reproductive dairy sectors. We will do this by identifying management. and understanding key reproductive processes driving reproductive efficiency and developing SSIF Platform: both management solutions to improve Agri-Food Production reproductive efficiency and precision breeding techniques to accelerate genetic gain. Key stakeholders and partners: Dairy NZ, Ministry for Business, Innovation The project is part of a wider programme of and Employment, CRV Ambreed, Max-Planck work that includes the sheep reproductive Institute for Molecular Genetics, LIC, Animal research and gene editing work housed Breeding Services within the SSIF Reproduction project. This dairy cattle project includes work carried out FY19 funding: in the MBIE/DairyNZ partnership program $1,625,207 ‘Pillars of a competitive and responsible dairy system’. The aim of this work is to develop Project timeline: strategies to improve reproductive performance 2015 – 2020 Animal Science

17 Forage Science

The group’s goal is to increase the resilience of pasture-based agriculture by improving the performance of forages within pastures. This is being achieved through the application of genetics, investigation of management approaches, and the discovery of microbes for biocontrol of pasture pests.

Research activities are focused on delivery of Another key role of the group’s work is to impacts for the pastoral sector and that includes increase our understanding of new and existing increasing genetic gain by integrating across biosecurity threats (weeds, pests and diseases) genomics, genetics, phenomics and germplasm to develop new or improved mitigation and resources, and focusing the forage improvement management options and policy advice. pipeline on pre-breeding/trait discovery, genomic selection and GM forages. Our Forage Science teams: • Forage Genetics Our research also ensures we increase our • Soil Biology understanding of soil biology to develop new • Plant Functional Biology practices and products which will enhance • Plant-Fungal Interactions pasture production and the nutrient and water • Biocontrol & Biosecurity use efficiency of forages. It will also allow us to • Plant Biotechnology investigate the biology of interactions between endophytes and their hosts to discover or to

Forage Science Forage develop novel endophytic microbial species.

18 Forage Science SSIF Project highlights FY19

Project Better border security

Scope Novel analytical and modelling systems will The vision of the Better Border Biosecurity (B3) be available for defining levels of risk posed by research collaboration is to be a world-leading the various threats and models will be available source of science-based solutions for border for assessing their likely impacts should biosecurity challenges by 2022, supporting they establish. This will enable significantly and protecting the competitiveness of export improved prioritisation of biosecurity responses industries and unique terrestrial ecosystems. to potential incursions.

The strategic priority of B3 is to add value to SSIF Platform: New Zealand’s biosecurity system through Agri-Food Production research. The goal of B3 is to develop new knowledge, tools and approaches to ensure Key stakeholders and partners: that harmful organisms are excluded to, Ministry for Primary Industries, Environmental and implemented by key end-users and Protection Authority, Dairy NZ, Department of stakeholders. Conservation, Forest Owners Association

By 2022, the major disease, weed and pest FY19 funding: species of threat to New Zealand will be better $1,977,000 known, their risk quantified and optimal points for intervention defined both off-shore and at Project timeline: the New Zealand border. 2012 – 2019 Forage Science Forage

19 Project High Metabolic Energy forage commercialisation

Scope Industry co-funding will progress four lines High Metabolisable Energy (HME) forages of HME ryegrass to US-based field trials and contain a genetic modification (GM) technology animal nutrition trials. These trials will assist that enhances photosynthesis by 20%, leading the industry to determine if New Zealand-based to 50% increased plant growth rates. This field and animal nutrition trials will occur from technology has already been validated in the 2021 by building a data package of information field in soy bean and in the glasshouse in to help define the value proposition for New five plant species. HME forages also contain Zealand. The SSIF supported programme will increased foliar lipids (increased from 3.5% to now shift the emphasis it has had over the 7%), leading to 10% increased metabolisable last 2 years (of gearing up for overseas field energy and improved nutritional quality. The trials), to now preparing commercial-ready increased metabolisable energy (ME) is carried HME forages for New Zealand-based field through during the ensiling process meaning and animal nutrition trials scheduled for the an increased value of silage and bailage. spring of 2021. The SSIF programme will also progress a second technology that enables the The potential benefits of HME forages in a enhancement of plant root systems. pastoral grazing system have been assessed via a multidisciplinary approach using biophysical This has been designed to be dovetailed with modelling, various in-vitro assays and growth the HME technology and act synergistically to room testing. They include potential increased improve overall plant performance. Packaging farm revenues of $900 per ha for dairy and this new technology with HME will extend for sheep and beef, a reduction in the total patent life to 2035, adding an additional six nitrogen load on pasture of 6-7% (resulting in years onto the potential licensing revenues reduced nitrate leaching and reduced nitrous (and increasing the opportunity for industry oxide emissions), and a 15-23% reduction in to gain a return on investment). methane emissions. SSIF Platform: The plants have a measured 9% increase Agri-Food Production in actual water use efficiency which should improve responses to drought. Due to success Key stakeholders and partners: in the Ministry of Business, Innovation and Dairy NZ, PGG Wrightson, Grasslands Employment (MBIE) Endeavour funding Technology Ltd, Ministry for Business, application in 2016, where AgResearch was Innovation and Employment awarded $10M over 5 years and industry stakeholders committed significant co-funding, FY19 funding: the Company is now in a position to fully $1,900,000 implement the 2015 HME Forages Business Plan scientific programme. Project timeline: 2013 – 2019 There are now two parallel and closely interrelated programmes.The MBIE and Forage Science Forage

20 Project Epichloë endophytes for the future farm

Scope not currently controlled by commercial strains. This project aligns fully with Pasture Endophyte This project will provide strategies to solve the Innovation (EI), a commercial project that is globally-important issue of endophyte seed funded by Endophyte Innovation EI (a joint transmission during seed production and venture between Grasslanz Technology and storage, a solution to which is a key priority PGG Wrightson Seeds) that directs research for all the major players in the seed industry. towards the discovery and commercialisation Together these objectives will improve pasture of Epichloë endophytes for safe durable productivity and resilience by both reducing forage resistance against insects. This SSIF insect predation and improving plant access programme aims to discover new Epichloë to water and nutrients through healthier root endophytes. It will also undertake the systems. Commercialisation of new endophytes fundamental research required to achieve and technologies will proceed through a stretch goals in endophyte utility by resolving fully functional pipeline that progresses issues associated with endophyte transmission seamlessly through EI under the leadership and the discovery and regulation of novel of Grasslanz Technology. bioactive endophyte secondary metabolites. SSIF Platform: Lastly, the impact of endophytes on plant Agri-Food Production development, where we are seeking to evaluate the role of the plant shoot apical Key stakeholders and partners: meristem (SAM) in coordinating the growth Seed and livestock industry, farmers and and development of the endophyte during the breeders lifecycle of the host plant, will be investigated. These aims are interlinked and collectively seek FY19 funding: to accelerate development of next generation $2,000,000 pasture Epichloë endophytes that target insect pests above and below ground, and in Project timeline: particular, major pests (e.g. grass grub) 2013 – 2022

Project Weed ecology and management in pastures and forage crops

Scope SSIF Platform: This project will provide the scientific basis Agri-Food Production for developing long-term cost-effective management of weeds in sheep and beef Key stakeholders and partners: pastures, dairy pastures and dairy support Foundation for Arable Research, Regional forage cropping systems in New Zealand. councils, Dairy NZ, Crown Research Institutes, Ministry for Primary Industries, Agrichemical It will achieve this through novel population companies, Ravensdown and bio-economic/farm system modelling and empirical research, with a focus on herbaceous FY19 funding: weeds including key groups such as the thistles, $1,222,000 grasses and buttercups. Project timeline: 2012 – 2020 Forage Science Forage

21 Project Climate change and the pastoral sector – impacts and adaption

Scope informed choices in areas where the timescale This programme of work will see us provide and the nature of the activity mean they may be forewarning of the impacts of climate change influenced by climate change. on soil, plant, animal interactions in pastoral agriculture and to develop adaptations that SSIF Platform: will enable agriculture to ameliorate or take Agri-Food Production advantage of the changing environment. Key stakeholders and partners: This activity includes future-proofing key Lincoln University, BOC, Ministry for Primary technologies (e.g. nitrogen fixation and Industries, Ministry for the Environment biological control systems) so they remain effective under climate change. FY19 funding: $740,000 Furthermore, the work aims to provide the information necessary for decision makers Project timeline: (farm, regional, national scales) to make 2015 – 2022

Project Map and Zap

Scope of laser mounted on the drone could hone A recent study led by AgResearch concluded in and damage the weed. Suitable laser from available research that the known costs technology already exists and is extremely of weeds to New Zealand agriculture was at accurate. Progressing this technology for this least $1.685 billion a year, but that the true purpose would be successful and could also cost from all weeds was likely to be much avoid damaging the useful plants around higher. Environmentally-friendly tools are the weed. being urgently sought for the early control of these weeds. Key stakeholders and partners: University of Auckland, University of Michigan, This project will involve mounting specialist Redfern Solutions Limited cameras on the drone or UAV (Unmanned Aerial Vehicle) that can first identify weeds FY19 funding: based on their unique chemical signatures $1,000,000 from Ministry of Business, and how they reflect light, and precisely map Innovation and Employment their locations using GPS. From there, smart spraying (rather than systemic and non- Project timeline: targeted use of chemicals), or the right kind 2017 – 2020 Forage Science Forage

22 Forage Science Forage

23 Farm Systems and Environment

We find mitigations for environmental impacts and climate change. We improve dairy, beef, lamb and deer production systems through innovative research on soil and water management, pasture fertilisation and farm nutrients, which reduces negative impacts on critical ecosystems.

The Farm Systems and Environment Group Our Farm Systems and Environment teams: is concerned with improving production • Farm Systems systems through innovative research to create • Environmental Research more profitable and sustainable farms • Environmental Sciences and agribusiness. • Modelling • People and Agriculture Collectively, our research provides the capacity to understand complex interconnected agricultural issues of interest to both the industry and the public. Our work includes increasing the understanding of how to reduce nutrient losses to water and greenhouse gas

Farm Systems and Environment Systems Farm emissions from farming systems.

24 Farm Systems and Environment SSIF Project highlights FY19

Project Hitting targets for deer industry profitability

Scope SIF Platform: The primary objective of this project is to assist Agri-Food Production the New Zealand deer industry to achieve its aspirational targets for improvements in animal Key stakeholders and partners: performance and on-farm profitability, as DEEResearch, Landcorp, Deer Industry NZ, espoused in its Productivity Improvement Alliance Group, Passion to Profit Programme Programme (now embedded in the Passion- 2-Profit PGP project), over the next 10-year FY19 funding: period, by providing science-based outputs to $1,333,000 improve productivity outcomes.

Project timeline: and Environment Systems Farm 2012 – 2022 25 Project Digital agriculture

Scope This will position AgResearch as a leader in the The overall objective is to test whether adoption of digital technologies to create value biological and environmental variability for pastoral agriculture. can be harnessed using digital agriculture technologies to produce food more sustainably SSIF Platform: and enhance the resilience of the agricultural Agri-Food Production value chain (with a more volatile climate and more demanding consumer base). We will Key stakeholders and partners: address this by starting to establish a long-term Broad industry application digital agriculture platform, beginning with ‘Use Cases’ (with SSIF support). FY19 funding: $1,000,000 These Use Cases will demonstrate the potential value of digital technologies to the sector, Project timeline: while simultaneously developing capability 2017 – 2019 within the organisation.

Project Forages for reduced nitrate leaching

Scope FY18 marks the fourth year of the FRNL This project supports the DairyNZ-led programme which runs between October programme ‘Forages for reduced nitrate 2013 and September 2019. Solutions will be leaching’ (FRNL). The research target within delivered to create nutrient load ‘headroom’ in this programme is to reduce nitrate leaching freshwater catchments which can then facilitate losses from dairy, arable, beef/sheep and mixed sustainable economic development in the end- farm businesses by 20% from current levels by user industries. AgResearch’s contribution to delivering (by 2020) proven, adoptable pasture RA2 is now complete and the ongoing focus in and forage crop options for end-users in all of RA1 is model development and reporting of the these industries. experimental data collected in previous years. Thereafter, the focus is on model development Farmers are proficient at managing pastures and testing. and crops, and capable of implementing change in their forage base/crop rotation. Forages SSIF Platform: offer a realistic path toward meeting the twin Agri-Food Production challenges of increasing productivity while reducing environmental impact. Overall, the Key stakeholders and partners: FRNL programme will provide new scientific Dairy NZ, Beef and Lamb NZ knowledge for forage options that reduce animal urinary nitrogen (N) excretion, sustain high FY19 funding: levels of production, assimilate more N from $263,450 soil to reduce leachable nitrate loads, optimise forage crop phases of arable rotations, and Project timeline: are readily integrated into farming systems. 2013 – 2019 Farm Systems and Environment Systems Farm

26 Farm Systems and Environment Systems Farm

27 Food and Bio-based Products

Our science has a strong focus on agri-food and bio products and agri-technologies, to support the development of a new generation of livestock and plant-derived products.

Our breadth of expertise sees us working We provide the underpinning research and in areas ranging from new foods to fashion. development capabilities for a diverse range of The role of the Food and Bio-based Products consumer materials from meat and dairy foods, group is to create the knowledge and tools wool carpets and fabric, health and beauty to develop high value foods, ingredients and products, as well as to the development tools products from pastoral-based agriculture. and machinery to support these industries.

We focus on the production and supply of high- Our Food and Bio-based Products teams: value premium consumer goods that are the • Dairy Foods end result of the agricultural value chain, with • Food Assurance and Meat Quality the outputs tailored to global market and • Food Nutrition and Health consumer preferences. • Proteins and Biomaterials

Food and Bio-based products Food • Textiles

28 Food and Bio-based Products SSIF Project highlights FY19

Project Meat Futures – profiting from global food trends

Scope ethical and quality standards, monitoring, Today’s food industries face increasing tracking and sanctions. More people want the challenges around exporting products into best and can afford to buy it. The opportunity both existing and new markets. Meat Futures for New Zealand is to differentiate itself from seeks to provide research outcomes that will alternative proteins and meat. enable New Zealand’s red meat industry to minimize the impact of increasing non-tariff SSIF Platform: trade barriers and capitalise on opportunities Premium Agri-Foods, Products and Services created by ever-changing market requirements and global food trends. Key stakeholders and partners: Rezare Systems, Auckland University of The global economic and political power Technology and Otago PhD Studentships, shift to the east is creating huge demand Meat Industry Association Partnership and opportunity for the development of high Programme and IIF quality, safe products tailored to meet Asian consumer preferences. This is resulting in FY19 funding: greater expectations of safety, quality, integrity $1,262,000 and traceability of food by consumers. This demand is driving culturally different Project timeline: and more stringent global food regulations 2015 – 2022

with stricter policies in terms of food safety, and Bio-based products Food

29 Project Unlocking value from the whole carcass

Scope Red meat proteins and co-products are a SSIF Platform: rich resource that can be captured for wider Premium Agri-Foods, Products and Services application and higher value for New Zealand in foods beyond traditional whole meat Key stakeholders and partners: formats. Unlocking Value from the Whole AFFCO, ANZCO, Alliance, Taranaki Bio Carcass aims to maximise the value for New Extracts, Auckland University of Technology, Zealand red meat through a whole-of-carcass Biomolecular Interaction Centre/ approach, where nothing is wasted and every University of Canterbury, University of Waikato part of the carcass is originally utilised in consumer products. FY19 funding: $1,154,000 This will be achieved through transformational research that will overcome current science Project timeline: knowledge and technical barriers to enable the 2013 – 2021 development of new high-value ingredients with proven functionality and benefits.

Project Integrated wool science

Scope around fibre traits of whole fibre, whole fibre This project is a balanced portfolio of research constituents or proteinaceous mixes from aimed at delivering short to long term outputs deconstructed wool are aligned to the MBIE of strategic importance within the established research partnership, New Uses for Wool. wool industries and emerging sectors seeking new high value uses for wool and its proteins. SSIF Platform: Research objectives will deliver science Premium Agri-Foods, Products and Services outcomes from longer term, potentially transformational fundamental science, through Key stakeholders and partners: to shorter term agile and responsive applied Unilever, Proctor and Gamble, Kao Corporation, science of “here and now” strategic John Marshall, Australian Wool Innovation, importance to industry. National Science challenge, Texus Fibres, Cavalier Bremworth Carpets Ltd, Godfrey-Hirst The objectives align to recommendations Carpets Ltd, Interweave, Designer Textiles, within the Textiles and Bio Products (TBBP) Chemcolour, Armadillo Merino, John Marshall Roadmap to ensure New Zealand wool is competitive in the areas of sustainability, fitness FY19 funding: for market, new products and processes, $2,000,000 personal and health care, and intrinsic benefits. Elements of Objective 3 are linked financially Project timeline: to the National Science Challenge, Science 2013 – 2022 for Technological Innovation, while elements of fundamental research in Objective 1 Food and Bio-based Products Food

30 Project Food provenance and assurance

Scope SSIF Platform: Food Provenance and Assurance covers Premium Agri-Foods, Products and Services research from “fork-back-to-farm” to ensure that New Zealand’s exports are safe, of superior Key stakeholders and partners: quality, ethically produced, have defendable Meat Industry Association Partnership provenance and produced in Programme, Ministry for Primary Industries, ways that are attractive to consumers and New Zealand Food Safety Science and Research underpins the “New Zealand Brand”. Centre, Catalyst China Network

This includes food safety, milk quality as FY19 funding: well as opportunities to create value through $1,000,000 New Zealand provenance and protecting country of origin. Project timeline: 2014 – 2020

Project Food nutrition project (aligned to High Value Nutrition National Science Challenge)

Scope SSIF Platform: The aim of the Food Nutrition SSIF project Premium Agri-Foods, Products and Services is to carry out research that is distinct from, but complementary to, the National Science Key stakeholders and partners: Challenge High-Value Nutrition (NSC HVN). PSAF and Yashili, Bright Dairy Foods, HVN Challenge, Fonterra, University of Auckland, It specifically aims to determine cause and a2 Milk Company, Grasslanz, Dairy Goat effect of food-health relationships pre-clinically Co-operative, ANZCO by defining their underlying biomarkers and mechanisms of action in relation to FY19 funding: gastrointestinal interactions in two key areas; $1,895,000 to improve brain development and function in early life, and to improve functional resilience Project timeline: (cognition, stress, mobility) with ageing. 2014 – 2022 Food and Bio-based Products Food

31 Building our future

AgResearch is part way through implementing a significant infrastructure programme which will change the way its researchers work and collaborate with key partners.

At the heart of this organisational DairyNZ, Plant and Food Research and transformation is the construction of two Manaaki Whenua. In the new facilities at a combined cost of $133m; organisation Food HQ is the conduit for food one in Lincoln and the other in Palmerston and beverage-based science, with partners North. These facilities are each jointly owned that include AgResearch, Massey University, by AgResearch and the two universities it is Plant and Food Research, Fonterra, ESR, partnering with. , Riddet Institute, BCC, Palmerston North City Council and the Smaller regional research centres will Manawatu District Council. be maintained at Ruakura and Invermay focusing on regional science issues such The Hub concept has been embraced by as land use, water use and farm systems. the wider agri-sector, with PGG Wrightson Around 200 AgResearch employees will moving one of its teams to a new building relocate to the new Palmerston North and currently under construction on AgResearch Lincoln campuses as construction of facilities land on its Lincoln campus. This desire for completes in 2019-2020. industry to be physically close to the research that supports it is a key indicator of the future Development of these science ‘hubs’ brings success of the Hub concept. The growth together science capability internally and of these partnership organisations will across the sector, allowing for a more therefore be well supported by the physical effective and collaborative approach to collaborations AgResearch has embarked tackling national science issues. on with Lincoln University and Massey University. This is part of a broader approach to collaborative research. AgResearch is already In Lincoln, the Lincoln University AgResearch part of two virtual communities – Blinc Joint Facility will begin construction this year Innovation and FoodHQ – which play key and will provide the two owners with a state- roles as brokers to the larger partnerships. of-the-art work space, purpose built to create These two organisations present as the open, collaboration working arrangements. front-door for companies wanting to utilise With industry partner DairyNZ as a key a range of research services without the corporate tenant, this new facility leads complexity of multiple arrangements. Blinc the way for new collaborative opportunities Innovation offers a channel into land-based in the sector.

Building our future research from AgResearch, Lincoln University,

32 Lincoln University and AgResearch Joint Facility Lincoln

Food Science Facility Palmerston North

In Palmerston North the new Food Science and innovators in one location, and form Facility will bring together food science a strengthened focal point for food science capability from Riddet Institute partners, in New Zealand. AgResearch and Massey University, in a new purpose built food science facility on Massey Both new facilities will embrace new ways University grounds. of working, with activity based work spaces providing new opportunities for growing This new facility brings together leading collaborations and building on partnership expertise in food composition, structure and relationships. digestion, food processing and preparation, and human health and nutrition, including This links directly to our Statement of Core notably world-leading capability in Purpose, which asks AgResearch to enhance gastrointestinal biology. the value, productivity and profitability of New Zealand’s pastoral, agri-food and agri- It is anticipated that this co-location of food technology sector value chains to contribute to science talent will provide the food industry economic growth and beneficial environmental with direct access to world class scientists and social outcomes for New Zealand. Building our future

33 Taking our research to the world

AgResearch partners with organisations around the world to carry out a wide range of research programmes. These span the breadth of AgResearch’s scientific capability and reinforce the success of global relationships. 266 57 51 30 30 Collaborations Countries Collaborations Collaborations Collaborations with USA with China Australia

R U S S I A

C A N A D A

U N I T E D S T A T E S

C H I N A

B R A Z I L 10 + collaborations

A U S T R A L I A 6 – 10 collaborations

2 – 5 collaborations

1 collaboration

Countries we collaborate with, in alphabetical order: Algeria, Argentina, Australia, Austria, Belgium, Netherlands, Nigeria, Norway, Peru, Philippines, Brazil, Canada, Chile, China, Colombia, Costa Rica, Poland, Russia, Saudi Arabia, Scotland, Singapore, Cote d’Ivoire, Denmark, Ecuador, England, Eritrea, Spain, Sri Lanka, Sweden, Switzerland, Syria, Taiwan, Ethiopia, Finland, France, Germany, Hong Kong, Thailand, Tunisia, Turkey, United Arab Emirates, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, United States of America, Uruguay, Wales

Taking our research to the world Taking Japan, Kenya, Malaysia, Mexico, Mongolia, Morocco,

34 The Margot Forde Germplasm Centre is Plant introduction and germplasm collection New Zealand’s national gene-bank of are important parts of the work of the Centre. grassland plants and also hosts the In recent years, collecting expeditions have New Zealand Indigenous Flora Seed Bank. been sent to areas of special relevance to Plant germplasm consists of seeds of New Zealand. genetically diverse plant populations that are conserved for use in plant breeding and to Databases ensure the survival of groups of plants. A database is maintained of all seed holdings The roles of the Centre are to obtain and samples issued. germplasm, to conserve it, replenish it and distribute it for research and product The public part of this database is available development. on the Internet. Seeds from this part of the collection are freely available to bona Collections fide researchers worldwide. Associated Collections provide the foundation for research includes DNA analysis to maximise pasture, turf and soil conservation, plant the conservation of genetic diversity and breeding and research in New Zealand, as to identify useful wild species that can be well as the conservation of New Zealand’s crossed with economic species. indigenous species. They also have important international conservation roles. Endangered Species Seed-bank The Centre hosts the New Zealand The grassland collections are very important Indigenous Flora Seed Bank on behalf of the because New Zealand’s export economy NZ Plant Conservation Network. This is a is based predominantly on pasture, and collection of seeds of populations of native almost all pasture plants are native to species that are endangered in the wild. other countries. Pasture species must be By storing seeds, these populations can be changed as problems arise, e.g. new pests, conserved for long periods and the seeds climate change, etc. The Germplasm Centre provide insurance against future loss in their thus provides the biological economy with native habitats. insurance against future problems arising from environmental changes.

The Centre holds The collection seeds from about includes over 100 countries 140,000 seed representing 2,500 samples species from 500 stored at 0°C and 30% genera and over relative humidity (RH) 70 plant families. to prolong viability.

For longer-term Under these Seed stocks storage, lower conditions, grass are replenished temperatures seeds will live for using (-20°C) are used 20-30 years specialised and this requires and legumes facilities. very dry seed. 20-50 years. Margot Forde Forage Germplasm Centre Forage Margot Forde

35 Māori Agribusiness

At AgResearch we recognise that our partners are distinctive because their whakapapa, values and ownership structures propel Māori businesses towards something different – a supply chain (including the farm and the consumer) that is based on shared principles (hereafter referred to as a ‘shared principles value chain’); Whakapapa, Rangatiratanga, Kaitiakitanga, Whanaungatanga and Manaakitanga.

This is a novel, uniquely Aotearoa business ethos Not unlike many New Zealand farmers, that aims to move Māori Agribusinesses beyond our partners have identified that they want business as usual, while at the same time building ownership of product from the paddock opportunity for New Zealand at large. to the plate, to have a direct relationship with As AgResearch innovates alongside Māori their national and international customers partners developing new indigenous fibre and and to increase the transparency within the meat values-based supply chains, we have supply chain, therefore spreading the risk formed three key Māori Agribusiness research and the wealth. themes to underpin their R&D needs. But where we at AgResearch add value is Māori Agribusiness Research Themes: recognising that unique to Māori Agribusinesses • decision making are their aims to produce food and engage with • resource use the whenua in a way that is in keeping with • value chain. cultural values, that maintains and even restores health and mauri to their land and waters and to Increasing numbers of our Māori Agribusiness be able to leverage the value of the ‘Māori Story’ partners are asking AgResearch to co-develop from their product. research and development projects that will help them extend their business operations and This is an exciting area of development and we interests beyond production into processing look forward to growing our partnerships and

Māori Agribusiness Māori and marketing. connection with the Māori Agribusiness sector.

36 Māori Agribusiness Project highlight FY19

Project Te Maru Ataata

Scope Investment area: Utilising the Poutama engagement framework Vision Mātauranga Capability Fund and AgInform farm system model to broaden the shadow of collective influence across Key stakeholders and partners: fragmented Māori land blocks. Te Tumu Paeroa, MBIE

The goal is to make significant and lasting FY19 funding: impacts for Māori through building the $207,000 capacity of landowners and trustees to enhance resource stewardship and unlock Project timeline:

the potential of their whenua-based assets. 2014 – 2022 Agribusiness Māori

37 Vision Mātauranga

“To unlock the innovation potential of Māori knowledge, resources and people to assist New Zealanders to create a better future.”

He nui whakaharahara te mahi a AgResearch AgResearch has a significant part to play ki te whakatutuki i ngā whakakitenga in the delivery of Vision Mātauranga to mātauranga ki te motu nei, ko te matua kia New Zealand, particularly in the support of tautoko ai i ngā huatau tiketike, i te oranga its indigenous innovation, environmental whenua me ngā whāinga taumata angitu o te sustainability and indigenous knowledge mātauranga iwi tiketike. growth goals.

Ki te whakatutukitia, kia toru ngā kaupapa To achieve this, three priorities have been mātua hei pou whirinaki kia taea ai ngā identified to better enable the delivery of kōwhiringa auaha te whakataki: opportunities for innovation;

• tāria te raukaha kia whakatutukitia te • build capacity to engage with and whakawhiti whakaaro, te whakawhiti deliver research outputs to Māori rangahau me Ngāi Māori

• whakawhanaketia ngā tātai hononga • develop meaningful relationships ki a Ngāi Māori with Māori

• whakawhanaketia ngā rautaki rangahau • develop research programmes that kia whai i ngā hiahia nō Ngāi Māori. meet the needs of Māori.

Ko tō mātou wero kia kāpia te anga Our challenge is to bridge a communication kōrerorero nō te rāngai ahuwhenua nei ki a gap between Māori and the sector and to Ngāi Māori, kia whakawhanaketia hoki ngā develop long term relationships. hononga motuhake.

Kia tika ai ngā hononga ki a Ngāi Māori, mā It means a re-focusing of the way we partner mātou anō ngā whāinga o Ngāi Māori e whai. with Māori entities – ways that are more E mate kāinga tahi, e rua kāinga rua. in-tune with the way Māori make decisions. Two strategies are better than one.

Ka whai a AgResearch i te mātauranga me We are ensuring that AgResearch has ngā pūkenga o te ahuwhenua Māori ki te the knowledge and skills to deliver on whakapuakihia nā te mahi whakaako, nā te AgResearch’s Māori specific impacts through whaiaro whanaketanga. learning and development initiatives.

E ai ki te whakataukī, Mā ngā pakiaka As the Māori proverb, ‘With the right tū ai te Kāhikatea i te uru”, ki te roots, the Kāhikatea can withstand tākaia ngā kōeke katoa o tō tātou the storm’’ explains, if we wrap whakahaerenga e ngā tautokotanga ourselves with the right support at tika, ka kitea ngā hua papai nō tātou. every level of the organisation we will

Vision Mātauranga Vision have impact and visibility.

38 Vision Mātauranga Vision

39 Our people

Successful delivery of our research outcomes can only be achieved by ensuring that we have the right science capability at the right time.

AgResearch has a strategic priority to support AgResearch’s own workforce planning process workforce planning, talent management includes a rolling capability assessment (including succession management and model, the identification of key people and retention planning) to ensure that our future critical roles, the development of a robust science knowledge and experience meets succession planning and retention strategy and emerging science priorities. We are not the execution of a development programme alone in recognising these challenges, and a which supports our high potential people and collaborative approach is being taken by the our emerging talent. The latter will ensure the seven Crown Research Institutes who will enhanced capability of these groups to ensure develop a report to be delivered to the that there is growth opportunity when more Minister of Research, Science and Innovation complex roles present themselves. by 30 September 2018.

AgResearch staff:

340 Female 295 Male

Our Values represent the attributes that are innate to those who will drive the success of our organisation. Our people

40 Curiosity Fund

The Curiosity Fund is one of the mechanisms by These will be larger awards and may be spent which AgResearch invests its Strategic Science over two financial years. Any AgResearch science Investment Fund. The Fund is intended to be staff member may apply. Researchers up to and a seed fund to enable AgResearch science staff including R7 level, technicians and non-science to explore and investigate inquisitive ideas and staff can apply for the main fund an as of FY19, thoughts that could lead to change (impact) and/ R7, R8 and R9 Scientists can apply for Curiosity or innovation that helps build AgResearch and its Plus. Collaborative proposals are strongly stakeholder’s futures. encouraged.

Twenty projects of up to $40,000 each are This fund supports and encourages innovation - available with funds to be spent in the financial from the exploration and investigation of an idea, year for which it is awarded. As of FY19, additional concept, thought, or technique that may lead funds called Curiosity Plus will be available for to the creation of a new solution, product, way projects which are investigating discovery, of doing something, and potentially lead to the

‘riskier’ science questions. harnessing of innovation and/or impact. Curiosity Fund

4141 Outreach Telling the AgResearch story

Without a comprehensive programme of storytelling, the benefits of AgResearch’s impactful science cannot be widely appreciated or easily linked to the success of New Zealand Inc.

Through their work our scientists are 2 Science New Zealand – 25 years of CRI’s ambassadors for this organisation and event, Wellington. Over 30,000 people their innovations and collaborations spark attended during the 3 day event. other relationships and work programmes. 3 South Island Dairying Development Centre To support them we host, display and (SIDDC) Open Day. Over 200 students trumpet our science through public-facing from Canterbury attended this event. events and information portals, most significantly those which align best with 4 Breeders day at Invermay Campus. our two key strategic pillars of reshaping Approximately 80 breeders attended this New Zealand’s agricultural future with smart, open day. sustainable systems and creating high value food and bio products. 5 Year 13 Open day. In conjunction with DairyNZ, Waikato University and LIC. The outcomes of this work is measured by Around 40 Year 13 students were shown six-monthly market research to determine agricultural science in action. growth in public understanding of AgResearch’s significance to the agricultural sector and 6 National Fieldays, Mystery Creek. Profiling therefore, the success of this country’s economy. our science to over 133,000 people over four days. 1 Public Awareness Campaigns. Educating New Zealand on the impacts of AgResearch science projects. Media channels include web, social media and cinema advertising.

1

Kids explain Cool Science www.coolscience.co.nz Outreach –Telling the AgResearch story AgResearch the Outreach –Telling

42 2 3

4 5

6 44 Financial results nominal surplusesareprojected. its campusdevelopmentsandworks throughtherelocationofstaffaspartFFP. From there At asurplus-before-taxlevelthegroupisforecastinglossesthroughtoFY2022asitcompletes following thebuildprogrammes. shows theoperatingrevenuefromFY2018throughtoFY2024,shownormalisedposition The financialresultsshowmodestgrowththroughouttheforecastperiod. Financial Performance Indicators Financial Performance forthe6yearsended30June2024 performance Overview ofprojectedfinancial 2018 –2023 Financial results Equity Ratio Capital Renewal Adjusted Return onEquity Forecasting Risk% Operating Margin Volatility (FC/TC) Interest Coverage Quick Ratio Revenue Growth Operating MarginperFTE Operating Margin Ratios Total Equity Surplus (deficit)beforetax EBITDA Cashflow Operating revenue Type Financial year Cash attheendofyear of theyear Cash atthebeginning Total netcashflow Effect ofexchange ratechanges financing activities Net cashflow from investing activities Net cashflow from operating activities Net cashflow from (28,943) (277 (585 0 0 (0) 0 0 (45,815) (12,727) 4,1 246,794 249,019 144,061 (1,837) 07)(.% 66)(.% 16)1.8% (1.6%) (3.7%) (6.6%) (1.5%) (0.7%) 28)44 3.3% 4.4% (2.8%) 15)05 06)(.% 1.5% (0.1%) (0.6%) 0.5% (1.5%) 63550505050500 500 500 500 500 46,315 59,043 16,016 Actual Actual 18 54 10 47 44 65.7% 64.4% 64.7% 61.0% 75.4% 81.8% 56 85 63 77 70 32.8% 37.0% 27.7% 26.3% 28.5% 25.6% $000s 7,446 2018 2018 33 . 14 03 . 12.6 3.8 (0.3) (1.4) 1.0 (3.3) 200 . . 05 01 . 3.7 1.0 (0.1) (0.5) 1.0 1.1 1.7 (284 (646 15,876 (66,446) (72,824) 150,392 Budget Budget (3,089) 635505050500 500 500 500 46,315 37959,588 23,789 1591,8 10,955 10,980 11,529 $000s 3,219 2019 2019 0.9 Projected Projected 1,3)(,4)(2,854) (6,841) (12,732) 3,2 3,0 230,647 232,702 237,628 5,8 5,1 165,466 158,312 155,385 $000s ,5 ,0 02716,443 10,247 7,605 6,857 2020 2020 0.8 Projected Projected (23,481) $000s The followingtable 1.9% 2021 2021 . . 0.9 0.9 0.9 Projected Projected (019 (9,274) (10,189) 13,408 $000s .%3.3% 4.5% 2022 2022 5)(7,169) (59) Projected Projected 232,957 170,984 19,307 $000s 3,209 4.9% 2023 2023 Net Cash/(Debt) Position ($100m) ($80m) ($60m) ($40m) ($20m) $20m $40m $60m $0m Actual 2018 Budget 2019 Budget 2020 Projected 2021 Projected 2022 Projected 2023 45 Financial results 46 Non-financial targets 1.9 InternalStakeholder 1.7 1.6 1.5 1.4 1.3 . tkhle nweg Securea2percentannualincreaseofresponsesthat Stakeholder Knowledge 1.8 1.2 ExternalStakeholder 1.1 Indicator ID 2018 –2023 Non-financial targets AgResearch-specific indicatorsofEnd-UserEngagementandScience Relevance Indicators Core Operating DIndicator ID . n srclaoainRevenue perFTEfromcommercialsources Endusercollaboration G.1 . eerhclaoainPublicationswithcollaborators(Percentage of Research collaboration G.2 . Technology & G.3 . Sciencequality G.4 . iaca niao eeu e T,bsdo vrg Tsoe h er 257k$235k $225.76k Revenue perFTE,basedonaverage FTEsover theyear. Financialindicator G.5 stakeholders Revenue from Engagement Engagement knowledge transfer aiirt ihorCpblt Vr aiir aig>40% rating Contribution toStakeholder Strategy–“Goodor“Better” Familiarity withourCapability –“Very Familiar” rating Dealing withUs–“Preferenceto Work” rating satisfaction rating Satisfaction withourService–“Very Good”or“Better” e) international revenue; f) Māorirevenue e) internationalrevenue;f) c) commercialrevenue;d)IP a) totalrevenue;b)netscience agriculture throughscienceandtechnology?” “who isresponsibleforimproving NewZealand’s “AgResearch”identify tothemarket researchquestion: / InteractionPlan. Consistent implementationofagreedScienceService or “Better”satisfactionrating Stakeholder Relationship measure –“Very Good” Services Plans. Consistent implementationofagreedStakeholder Definition Definition international authors). authors ord)withacombinationofNewZealand and b) withotherNewZealand authors, c)withinternational publications witha)only AgResearch authors, Commercial reportsperscientistFTE. 2014 calendaryear). publications ineachjournal. The referencefigureisforthe during theyear, weightedbythenumberof AgResearch assessed bySCImagoinwhich AgResearch staffpublished of 2-yearcitationsperdocumentforscientificjournals Impact ofscientificpublications. (The average value Y9tre FY17result FY19 target $84.30k d) 21% c) 26% b) 39% a) 14% 1 2.7 >90% >60% >70% f) $0.29m f) e) $4.10m d) $9.79m c) $54.29m b) $107.50m a) $145.39m - 9% Achieved - >60% FY17result Achieved FY19 target $90.0k 21% 26% 39% 14% 2.6 2.6 83% 25% 57% 68% f) $0.393m f) e) $1.8m d) $10.46m c) $44.39m b) $104.1m a) $146.01m 7% 53% DIndicator ID AgResearch-specific Operating IndicatorofDeliverytoAgResearch-specific Operating VisionMātauranga 4.1 Indicator ID performance AgResearch-specific financial 3.1 Indicator ID AgResearch-specific workforceindicators 3.3 Health&Safety 3.2 2.1 Financial Target Staff engagement olbrto ihMoiCultivate collaborationtosupportMāoriagribusinessby Collaboration withMāori Definition Definition Definition Operating Profitbudgetachieved. Increase EngagementIndex(EI)by5points. with >75weightedmeanscore. AgResearch increasesintheengagementsurveyquestions, Employee perceptionofHealthandSafetywithin No notifiableinjuriesand<2events. co-developing fundingproposalswithstakeholders. Y9tre FY17result FY19 target FY17result FY19 target civdAchieved Achieved 70 >75 <2 0 Y9tre FY17result FY19 target 6 61 75.6 0 - 47 Non-financial targets 48 Miscellaneous items Miscellaneous items • • These include: Quarterly Reports throughout theyear: with thefollowing documentsandinformation AgResearch provides ShareholdingMinisters financial year Shareholding Ministersduringthe providedtothe Information tobe the yearending30June2019. It isforecastthatnodividendswillbepaidin retention ofimportantcapabilities)exist. commercialisation, capitalexpenditureandthe opportunities (includingreinvestment, of adividendwhennosoundinvestment surplus cashtoshareholdersintheform The Company’s policyisthatitwillreturn if any Principles indeterminingtheannualdividend, the 2017 Annual Report. material changesinaccountingpoliciessince at www..co.nz. There have beenno Policies isprovided on AgResearch’s website as appropriate. A fullStatementof Accounting other applicablefinancialreportingstandards Financial Reporting Standards(NZIFRS)and the NewZealand Equivalents toInternational Statement ofCorporate Intent,complywith the financialinformationpresentedinthis (NZ GAAP). The financialstatements, including Accepted Accounting PracticeinNewZealand 1992, thePublicFinance Act 1989andGenerally Act 2013,theCrown Research Institutes Act Companies Act 1993,theFinancialReporting in accordancewiththerequirementsof AgResearch’s financialstatementsareprepared AgResearch’s accountingpolicies •

business plans. comparisons ofsuchachievements with on financialactivitiesforthe quarter C C Financial statements omment onresearchachievements and omparisons withbudgetsand comments • • each financialyear. Init,theBoardsetsout: Ministers withinthreemonthsoftheend AgResearch isdeliveredtotheShareholding An Annual Report oftheoperations Annual Report • • • • • This includes: Half-Year Report • • • •

(financial andnon-financial). achieving annualperformancetargets Companies Act 1993 Research Institutes Act 1992andthe principles setoutinSection5oftheCro during theperiodinaccordancewith A statementthattheCRIhasoperated A statementofresponsibility performance fortheperiod C period ofthepreviousfinancialyear C year (including accountingpolicies)forthehalf Unaudited financialstatementsandnotes a goodemployer A reporton A statementofresponsibility statements The auditors’reportonthese financial financial period C for thefinancialyear Audited consolidatedfinancialstatements C • • •

ommentary onprogresstowards ommentary onoperationsandoverall omparative figuresforthecorresponding omparative informationfortheprevious , withintwomonthsofthehalfyear beginning oftheyearinSCI);and including budget(asestablishedatthe position attheendofperiod the financialyearandtheir AgResearch anditssubsidiariesduring financial resultsoftheoperations as maybenecessarytoshow the policies andsuchotherstatements contingent liabilities, accounting Statements ofcommitments comprehensive incomeandcashflo Statements offinancialposition, AgR A reportoftheoperations esearch anditssubsidiaries AgResearch’s performanceas , consistingof: , ws, wn • • not acquire: Research Institutes Act 1992, AgResearch will As requiredbysection13(1)(d)oftheCrown or otherorganisation or otherwiseacquiressharesinany company for,of thegroupsubscribes purchases, any followedbefore member tobe Procedures Companies Act 1993. Crown Research Institutes Act 1992andthe Public Finance Act 1989,Section17ofthe annual reportingprovisions inPart V ofthe The Annual Report willcomplywiththe • • • • • than $5millioninvolving: transactions withavalue equivalent toorgreater written consentforany transaction or seriesof than $10million. The Boardwillobtainprior other assetswithavalue equivalent toorgreater (buildings, land andcapitalequipment) acquisition, disposalormodificationofproperty series oftransactionsinvolving afullorpartial Shareholding Ministersforany transactionor The Boardwillobtainpriorwrittenconsentfrom •

An interestinacompan An interestinan or o Shares thatgiveitsubstantialinfluencein Shareholding Ministers. A responsetoan SCI performance indicatortargetssetinthe A reportagainstfinancialandnon-financial A corporatesocialresponsibilityreport the investment transaction), and the investors shallbevalued atthetimeof interests atafuturedatethe directionof clauses thatcompel AgResearch tosell transactions whichinclude“drag-along” ownership ofanother entity(provided that ownership ofasubsidiaryorsubsidiary’s T external company orbusinessunit part, ofsharesorinterestsinasubsidiary The acquisitionordisposal,infull shareholding Ministers. shares, writtennoticetothe except after venture, orotherassociationofpersons, or ransactions thataffectacompany’s ver acompany y partnership,joint y directiongivenbythe y otherthaninits , intangible propertyrights. fair value. AgResearch doesnotrevalue its book value maynotreflecttheircurrent market andotherfactorsindicatetheirstated every threeyears, ormorefrequentlywhere its land,landimprovements andbuildings value. The BoardnotethattheGrouprevalues a reasonableapproximation ofthecommercial under NZGAAPwhichtheBoardconsidersis forecasted Groupequitypositondetermined million. This value isbasedsolelyonthe value oftheGroupisapproximately $230 The Board’s estimateofthecurrentcommercial Current commercialvalueof AgResearch been soughtfromtheGovernment. At thedateofthisSCI,nocompensationhas fromtheCrown compensation seeksActivities forwhichtheboard Ministers and AgResearch fromtimetotime. with noticerequirementsagreedbetweenthe activities below thisthresholdinaccordance related topropertyandcommercialisation in writingbeforeenteringintoany transaction The BoardwilladviseShareholdingMinisters •

effect onthecompany’ sciencecapabilities. core businessorthatmayhave amaterial scope ofthedefinitioncompan Other transactionsthatfalloutsidethe y’s 49 Miscellaneous items 50 to createvalueforNewZealand. needed, andusethecollectiveexpertise Partner theinnovationthatis toidentify 51 Financial Statements 52 Financial Statements www.agresearch.co.nz 3809 3489 T +64 9053 Mosgiel 50034, Bag Private 176 9092 Mosgiel Alley, Puddle Centre Invermay Agricultural T Hopkirk T Grasslands 4442 North 11008, Palmerston Bag Private 4410 North Palmerston Tennent Drive, Institute Research Hopkirk and Centre Research Grasslands 2836 7856 T +64 3123, Bag Private Hamilton 3240 10 Hamilton 3214 Road, Bisley Centre Research Ruakura 3321T +64 8800 4749, Bag Private 8140 1365 7674 Lincoln Road, Springs Lincoln Centre Research and Office Corporate 224 NZBN: 038 966 9429 Limited AgResearch +64 6351+64 8600 6356 8019+64