The third year of the Cotton Catchment Communities CRC (Cotton CRC) has seen a transition from the start-up phase to a phase of consolidation. Much of the success of the Cotton CRC to date has been the result of the vision and capabilities of the previous CEO, Mr Guy Roth. I would like to thank Guy for his hard work with the Cotton CRC and particularly for the support and assistance provided to me through this transitional period. In addition, I would also like to congratulate the staff of the Cotton CRC for their contribution, commitment and professionalism. My key focus has been to ensure we consolidate and continue the excellent work already undertaken in the 300 current and completed projects that the Cotton CRC manages. These projects are geographically spread across the key cotton growing regions, as well as the Kimberly region in Western Australia, the Burdekin region in North Queensland and Geelong in Victoria. The clear success of the projects is due to the collaborative research and extension efforts across the twelve participant organisations, 36 affiliate organisations and external research groups. Ongoing drought has had a considerable impact, not only on cotton production, with the smallest crop area planted in Australia for 30 years, but also on the available human capital residing in the regional communities. With little or no inflow into water storages or natural flow in rivers, public attention has been focused on the use of water for irrigation in the Murray Darling Catchment. Water use remains a strong focus of the Cotton CRC and existing projects in the farm and catchment programs focus on research in this area. With the recent addition of the $5 million National Water Commission water storages project, we now have research that spans the catchment down to the farm scale, including groundwater, riparian health, deep drainage, evaporation, plant physiology and farming systems. Having a greater understanding of water use and management practices will be important to the industry given the potential uncertainties, especially in relation to climate change. Education and training continues to be an important dimension of the Cotton CRC. There are currently 38 PhD students conducting research across a broad range of projects in the industry. Additionally, the Cotton CRC supports The University of New England Cotton Production Course, the CSIRO Materials Science and Engineering Cotton Field to Fabric course based in Geelong and the new Aboriginal Employment Strategy Schools- Based Traineeship project at the Australian Cotton Research Institute, Narrabri. A primary focus for the Cotton CRC during 2007–08 has been reviewing the existing Best Management Practices (BMP) program. The Cotton CRC has contributed significantly to collaboratively support and resource the new BMP strategy for the industry. This occurs not only through our investment in research but also adoption. BMP is pivotal to providing a driving force for taking appropriate research through to best practice and then effecting practice change. The premium status of the Australian cotton crop in the global market continues to be under threat. The uptake of biotechnology and the rapid improvement of fibre quality from competitor countries are impacting on the ability of Australia’s marketers to secure a premium in the market place. Cotton germplasm producing extra long staple (ELS), bred by CSIRO, has been trialled successfully in the 2007–08 season. New elite ELS varieties are in advanced stages of production and will become available over the next three years. Existing processing technology does not allow the full utilisation of the additional length that these varieties generate. The Cotton CRC has reacted swiftly to divert resources in the Product program to address this issue and build knowledge and technology for the future. Looking ahead to the next twelve months, the Cotton CRC has recently developed several key projects that will further support extension and the uptake of research. These include the appointment of the Farming Systems Scientist (Michael Braunack) through CSIRO, our Research Economist (Janine Powell) through the NSW Department of Primary Industries and an Education Officer (Trudy Staines) through CSIRO. These positions will assist the Cotton CRC with the crucial link of taking the science and delivering it to the industry and community audiences alike. I would like to thank DIISR, the Cotton CRC’s participant and affiliate organisations, the Board of Directors, our research scientists and their teams, the extension and management team, collaborators and, importantly, the Cotton CRC staff for their support, hard work, and focus on our vision of Adding $1 billion of additional benefits to the industry and the catchments and communities in which it operates. Whilst I have had the opportunity to catch up with many people associated with the Cotton CRC, I look forward to meeting those I have not yet had the chance to meet at the upcoming Science Forum and Third Year Review in October.