Last year Professor Chris Franco, leading a collaborative research group of scientists from Adelaide's Flinders University and CSIRO Plant Industry in Perth , was awarded the Eureka Prize sponsored by the Grains Research and Development Corporation for developing a natural seed coating that could suppress fungal diseases.

It's a great story, because Professor Franco works in a medical school and initially, he and his team at Flinders were looking for a source of compounds that could be used to develop pharmaceuticals.

The bio-active compounds are produced by actinomycete endophytes, bacteria that look like fungi and which naturally occur in plants - particularly in this case, wheat. After finding them in wheat, the logical question for the team was why and the logical answer was that they played a beneficial role in the life cycle of a plant.

It's taken a lot of trialing and research, but the team has found that these bacteria provide many benefits to plants. The compounds they produce can not only suppress fungal disease via an antibiotic effect, but they may also play a role in switching on a plant's genetic resistance to disease.

They have an advantage over other beneficial micro-organisms that usually exist in the rhizosphere, that immediate vicinity of plant roots, because being inside a plant rather than outside means they're not competing with other organisms.

In lab tests on a weed from the mustard family, Arabidopsis thaliana , it was found that these bacteria boosted disease resistance in the plant all on their own. Professor Franco says they effectively prime the plant and increase resistance to diseases such as take-all by a factor of up to 100.

They've also found that 30% of the 100 or so different types of actinomycete endophytes promote plant growth. It is suspected this is due to their production of indole acetic acid.

Developing these bacteria into effective inoculants is the next step in the process. Trials in Western Australia , New South Wales , Victoria and across South Australia over the past three years have produced some startling results. At Alford in SA, treated wheat in soil infected with take-all yielded 40-50% more than the untreated wheat. Trials also revealed an increased yield trend in wheat grown in uninfected soil.

Seeds treated with actinomycete endophytes require no special equipment and can be used in normal cropping practices. They're unaffected by herbicides or fertilisers. They offer a natural sustainable alternative to chemical use. The potential is definitely there for an inoculant that can serve as an effective weapon for growers in the constant battle against fungal disease, but even for growers who don't have such problems, there may be a clear yield advantage in using it.