Organisation - July 4, 2015

In-crowd at work in the top sector

Text:
Albert Sikkema,Koen Guiking

Since 2012 the top sectors Agri & Food and Horticulture and Propagation Materials have been responsible for allocating part of DLO’s budget. This means researchers have to set up public-private research projects together with businesses. This complicates research funding, with the effect that it is now mainly established market leaders that get the projects.

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Wageningen UR’s research institutes (DLO) get about 140 million euros a year from the ministry of Economic Affairs. About 55 million of this is for statutory research tasks, about 21 million for policy support research and 16 million for maintaining the institutes’ knowledge base. In this case the client is always the government. A further 47 million euros is allocated to two top sectors: Agri & Food and Horticulture & Propagation Materials. Decisions on how the funding is used in these top sectors are made by the government in consultation with the business world and DLO.
Until 2011 this was a matter between the DLO and the ministry. By putting these decisions in the hands of the top consortia for knowledge and innovation (TKIs), the demand for knowledge within the business world is linked directly with government-funded research institutes. The idea behind this was that society would benefit from more innovations. Of the 47 million, the Agri & Food (A&F) top sector has 31 million a year to spend on public-private projects with DLO. The Horticulture and Propagation Materials top sector (T&U) gets 15.5 million euros. The 47 million is being made available in stages, as the funding of multi-annual projects is phased out. This year 37 million of the top sector funding will be allocated, and in 2016 the full 47 million will be used. Companies wanting to embark on a public-private project in a top sector must cooperate with DLO.

Agri & Food has already approved 89 public-private projects, and Horticulture & Propagation materials 95 projects. What kinds of proposals are these, and who decides which research gets the funding? We investigate that here with a random sample, looking at the 56 approved projects in A&F in 2013. In the A&F top sector, the theme of Sustainable Livestock got the most funding, with 13 projects. Most kinds of livestock – dairy cows, pigs, chickens, sheep and goats – were represented in the proposals that were submitted and honoured. Under the auspices of the top sector, livestock research has expanded. The same goes for the biobased research at Food & Bio based Research. Numerous projects have been approved in the field of biorefinery, which aim at extracting more value from plant resources and waste products of the agro-industry. Balancing this growth, there have been big savings in plant based research and consumer research. Although the agricultural economics institute LEI has bagged a number of projects under the theme ‘Market and chain innovations’, it hardly gets any consumer research anymore. That is not something companies are willing to invest much in.
The research proposals submitted have to fit within the top sector’s ‘innovation agenda’. This is established by theme committees which include members from DLO, TNO, universities, businesses and the government. They establish what the big research questions and innovation needs in agriculture and horticulture will be in the next few years. Any  research proposals have to match this framework. Coordination is in the hands of a ‘theme coordinator’ at DLO, who writes the texts, says Charon Zondervan, programme manager at Food & Biobased Research. ‘I wrote the descriptions of two themes for the Agri & Food top sector myself.’

The government is pulling out, both as financier and overseer.

In practice, then, the DLO institutes still have a lot of say in the direction taken by top sector research. Geert van Peet, senior researcher at Livestock Research, wrote the innovation agenda for the theme of sustainable livestock. ‘In writing the innovation agenda I keep in mind what is of interest to the business world, but also which themes the government considers important. That is why there is so much emphasis on welfare and health research in the livestock sector.’ DLO’s own interests are not forgotten either. Van der Peet: ‘Companies also have to collaborate on long-term issues, otherwise the research gets too fragmented.’

Once the innovation agenda is ready, the top sector looks at how much DLO budget is available that year, and a call goes out. Companies can submit proposals jointly with DLO. The companies then cover roughly 50 percent of the project costs. There is a lot of interest in this system.  Nevertheless, only one in five proposals submitted in the last few years were approved. The companies are keen but DLO’s top sector budget is limited, so the top sectors have to be very selective. Which projects survive the selection process? In 2013 the A&F top sector invested chiefly in projects submitted by large consortia. Four market leaders in the field of livestock breeding formed the Breed4Food programme together with Wageningen researchers, with the aim of developing robust chicken, pig and cow breeds. The livestock feed industry did the same in the Feed4Foodure programme, the poultry sector pooled its resources in Poultry4Food and the veal sector in Vealsystems4Food. The fours in the names point to the join nature of the projects. This concept was partly the brainchild of Leo den Hartog, R&D director at feed producer Nutreco and special professor of Sustainable Animal Nutrition at Wageningen University. This combination put him in an ideal position to act as go-between, between the business world and the academic institution. Den Hartog became a member of the board of the A&F top sector on Nutreco’s behalf. In Wageningen he faced the question of how the animal nutrition research could be organized. To work this out, he and the professor of Animal Nutrition and the director of Livestock Research invited four large animal feed companies: De Heus, For Farmers, Agrifirm and Nutreco. They decided to club together to fund research.

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Breed4Food, in which four breeding companies collaborate with Breeding and Genetics at Wageningen UR, was created in a similar way. In each case, it is one or more market leaders who take the initiative. The Dutch dairy organization and LTO instigated the ‘Sustainable Dairy Chain’ programme, for example. And for the biorefinery of waste products, the sugar cooperative Cosun formed three consortia, all of which had their proposals approved.
The market leaders and sector organizations know their way to the top sector. Moreover, this ‘establishment’ also has the time and resources to invest in collaboration with government-funded research institutions. And often over a long period. They already have various links with researchers and they have people who can write project proposals. They also know their way around the complex rules for grants and they know what the top sectors have in mind with their innovation agendas. ‘If you have been on the theme committee, you understand the underlying discussions,’ says Van der Peet. ‘Friesland Campina was involved at all layers of governance. That works, because then you understand the game.’ Ate Oostra, former director general at the ministry and currently chair of the Metropolitan Food Security platform, endorses Van der Peet’s insight. ‘Previously, a research plan would be made and everyone could sign up. Now the top companies get the money. No one bothers to try to get the small companies on board anymore. You’ve got to be part of the in-crowd.’

This attitude hits small and medium enterprises particularly hard. They have fewer connections with researchers and do not have grant experts on their staff. Van der Peet: ‘Small and medium enterprises submit proposals too, but most of them are for valorization research, to check whether a particular housing system really does reduce antibiotics use, for instance. But the top sector does not support that sort of research. It is not allowed to become a source of backdoor state support for individual companies. The research has to be something the entire sector will benefit from. In which case, small and medium companies often say, ‘that’s too broad for us, we are stopping.’ The big question in the years to come will be how players in this sector can join forces in knowledge consortia. All in all, it seems as though it’s the big companies and the leading researchers in DLO who steer the research in the top sectors. Where is the government then? It is pulling out, both as financier and as overseer. While the erstwhile ministry of agriculture had a substantial agenda, the current ministry of Economic Affairs opts for a more procedural and service role. According to Zondervan, the ministry adopts too passive a stance in formulating knowledge agendas, and social priorities get squeezed out. ‘Nowadays, for instance, companies largely decide the research agenda related to overweight and food safety, whereas these are important topics for the government too.’ Van der Peet notices that ‘the government consistently avoids making the decisions.’


Promised fortunes

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When the top sectors were launched, the then minister of Economic Affairs Maxime Verhagen made lavish promises. Participating companies would get great returns on investments in knowledge and innovation, enabling DLO to do a lot more research. The ambition of the A&F top sector was to have 300 million euros’ worth of public-private research projects available in 2015. In 2014 the total was 140 million: 80 million euros from the government and 60 million from the business world.
The main reason behind this is government budget cuts. The government dismantled the fund for economic structural support (FES), which allocated half a billion euros in research funding per year. The Hague also abolished the production boards, which spent about 30 million euros a year on research by DLO for farmers and market gardeners. This meant investment money disappeared from the business sector. In the top sector that should be seen as virtual ‘money’ because what the ministry really does is to link research capacity (staff ) at DLO to research capacity in companies, and a bit of money. The top sectors’ TKIs have bank accounts but there is not much on them. In 2014 the A&F top sector had projects on the go to the tune of 64 million euros. Of that, 50 million was research capacity and only 14 million was research funding in euros. So the main activities of the top sectors are channelling demand and administrating the research funds.


But this passivity is going to cause friction. The government has much less funding to spare for policy support research; nor do policy issues fi t well in the top sectors. If a minister promises to have extra research done on an urgent social issue, he draws a blank. Unless the proposal is submitted to the top sector in good time, and the business world contributes. This brings us to the final decision making process on who gets money from the top sectors. There are two assessment rounds. In the first round, a committee (with representatives of the government, the company and DLO) evaluates what are called ‘pre-proposals’, sifting the grain from the chaff. In the second round an ‘independent external committee’ evaluates the proposals. This committee approves some of the proposals - 70 percent in 2014. But not all of the approved projects end up receiving funding: 60 percent did so in 2014.

It is not made known who is on the external committee and its advice to the Top sector board is confidential. We do not know whether the Top sector board accepts the committee’s advice. In any case, the top sector board sends a list with the proposals to be honoured to the ministry of Economic Affairs, which takes a month to draw up the definitive list. ‘Up to now the minister has always followed the advice of the top sectors on the use of DLO capacity,’ says a spokesperson for the ministry. Quite what the considerations are in consultations between external committee members, the Top sector board and the ministry is not known. Oostra: ‘Companies are never told by the top sector why a project was or was not accepted. They set the course, but it is not transparent.’

Illustration: Geert-Jan Bruins


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