THE Federal Government is preparing to slash $60 million from the budgets of Australian agriculture's 15 top research and development corporations, according to the Opposition.

Federal Opposition agriculture spokesman John Cobb said Government sources had informed him the pressure was on to cut $60 million from the Federal Government's $207 million contribution to the RDCs.

Agriculture Minister Tony Burke dismissed the claim and accused Mr Cobb of mounting a scare campaign.

"I don't know who Mr Cobb's source is for this information, however, as members of Parliament know, budget decisions are announced on budget night," Mr Burke said.

But Mr Burke has been openly critical of the RDCs.

In December, he lashed out at RDCs, warning he did not want taxpayers' money "spent on duplication, on obscene executive salaries, or on agri-political activity".

At the time, Mr Burke said the Government's concerns would be addressed by a Productivity Commission review of the RDCs' performance.

Last week, Mr Burke and assistant Treasurer Nick Sherry released the terms of reference for the review, which will examine the "appropriateness of current funding levels and arrangements for agricultural research and development".

The inquiry will also examine the "potential overlaps across governments and programs".

Mr Cobb said the commission's terms of reference should ring alarm bells throughout rural and regional Australia.

He said the review would be "a Trojan horse" that would lead to less investment into vital practical and productive agriculture research.

But Mr Burke defended the Government's record, saying it had announced an additional $50 million to the existing $46.2 million for climate change research for on-farm testing of emissions reduction options.