<table border=0 cellpadding=2 cellspacing="0"><tr><td>
<pre>Hello All

In a recent message, a question was posed to members of the group. "Can
anyone show where a levy in any other industry was of any benefit?" Well,
here are a few examples from the Australian wine industry. Their research
has been funded by a levy on grapegrowers administered by the Grape and
Wine Research and Development Corporation (GWRDC).

Before I provide the examples, I would ask those who are undecided or open
minded about the proposed levy the following questions. The Australian
olive oil industry has its own issues and challenges. Do you think that
some other country, or the IOOC, will come to our aid and fund solutions to
our problems or which benefit our market opportunities? Furthermore, do you
think that larger companies will fund research that will benefit the whole
industry rather the that research that will most benefit them, or indeed
release their findings for the common advancement of the industry? If you
answered no to either of the following read on:

Here are some examples of where levy money made a difference to the bottom
line of the people who contributed to it.

1. Development of partial root-zone drying irrigation: An ingenious method
of irrigating vines that results in half the water use but with no
reduction in yield or quality.

Result: Better use of valuable water resources allowing more vines to be
grown using the same water allocation, or simple old fashioned cost and
environmental savings.

Question: Could this work with olives as well? Which individual or
organisation has the scientific expertise and is prepared to put up the
years of effort and meet the associated costs to find out?
------------

2. Deficit irrigation: This research discovered the irrigation schedules
that maximised wine quality with little or no reduction in yield.

Result: The majority of Australia's grape growers now intentionally hold
back irrigation at a certain time during the grape's development to produce
fruit with greater colour, tannin and flavour.

A question to olive growers. Do you know when to irrigate your trees to
obtain the best quality olive oil, rather than the best looking trees? The
grapegrowers know that the best looking vines usually don't make the best
wines.

-----------
3. A comparison of the technical performance of bottle closures: A detailed
scientific comparison of the ability of the multitude of different closures
(cork, screw-caps, plastics, hybrids etc) to keep wine free from oxidation
and closure related taints. Results: Obvious.

------------
4. Understanding the reason for random oxidation of wines. Some bottled
wines within a batch will inexplicably oxidise while large numbers of
others in the same batch remain fresh.

Result: A routinely used wine additive that has been used for decades was
shown to be the likely cause. Winemakers are now reconsidering its use
which should result in fewer oxidized wines in the marketplace. Why so
important? The huge, Tesco and Sainsbury supermarket chains in the UK
ruthlessly drop inconsistent products. No questions asked, and no excuses
accepted or even expect. Question: Do you think they treat olive oil
differently?

--------------
5. Assessing oxidation in unopened bottles: A modification of a common
piece of lab equipment has been derived which allows it to 'see' inside
unopened bottles of wine to assess its level of oxidation. It works
regardless of the bottles colour or darkness.

Result: Wine companies are successfully using the machine to screen bottles
that may have undergone random oxidation so that they can be pulled from
the market. Benefit: as in 4.

----------------
And finally in past years the levy has (amongst many other outcomes):

6. Helped relax EU practices considered detrimental to export. For some
years the levy helped fund a team of professional negotiators to travel
overseas to negotiate the relaxation of what was seen by local exporters as
trade restrictions.

Result: A mutually beneficial arrangement giving broader and fairer access
in both directions. Australia is now a success story in the European and
British marketplace.
------------------

These are just a few examples of what has been achieved in the last 3-5 years.

Remember that in this world, no one helps anyone that doesn't help
themselves. The Australian Federal Government supports this policy by
matching levy research funds dollar for dollar. In addition, other funding
bodies usually only fund on a top up basis, i.e. match $ for $ (or in some
cases $2+for $) but only if some other funding body has contributed first.

But forget the rest....... if in some time in the future research funds are
desperately needed to solve an impending major industry wide problem, don't
bother begging our Federal Government, Universities, and Ag Departments for
assistance (as we do now). They will simply say that they have something
better to do, and someone else has given us the money to do it. Vis a vis,
we had our chance!



Richard Gawel
Recognose Pty Ltd


[Non-text portions of this message have been removed]
</pre>
</td></tr></table>

<table border=0 cellpadding=2 cellspacing="0"><tr><td>
<pre>Hi Richard,

You asked "do you think that larger companies will fund research that
will benefit the whole industry rather the that research that will most
benefit them, or indeed release their findings for the common
advancement of the industry?"

Is it not the case that anyone conducting R&D would have a problem
gaining a tax deduction for that expense whereas a levy would be wholly
deducted as a cost?

Roger Farquhar
</pre>
</td></tr></table>

<table border=0 cellpadding=2 cellspacing="0"><tr><td>
<pre>--- In OliveOil@yahoogroups.com, Roger Farquhar <rogfarlandsc@o...>
wrote:
>
>
> Hi Richard,
>
> You asked "do you think that larger companies will fund research
that
> will benefit the whole industry rather the that research that will
most
> benefit them, or indeed release their findings for the common
> advancement of the industry?"
>
> Is it not the case that anyone conducting R&D would have a problem
> gaining a tax deduction for that expense whereas a levy would be
wholly
> deducted as a cost?
>
> Roger Farquhar

Hello Roger

You would have to ask a professional accountant about that. The
circumstances under which R&D expenditure is tax deductable has
changed a number of times in recent years. But it is my understanding
that if it is legitimate research which clearly demonstrates an
attempt to increase the profitability and competitiveness of the
company then it is an allowable business expense.

Whatever the case may be, I know of a number of substantial research
projects that have been privately funded by wine companies that have
produced results that have been considered strictly proprietary. The
general business principal here is: we thought of it, we did it, we
paid for it, so why should we share it?

Richard Gawel
</pre>
</td></tr></table>