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New Zealand Wool Industry Moves in the Right Direction

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In a long overdue move NZ wool growers and industry leaders have started the debate for a compulsory wool levy. Australian farmers have maintained their wool levy and have been reaping the benefits in high demand, and therefore high prices for Merino wool. Australian Wool Innovation (AWI) has invested millions of dollars into developing wool products using Merino wool and therefore increasing both demand and prices. Crossbred wools have not kept pace in innovation and development, and marketing. New Zealand farmers have been ill-advised to drop the levy and drop all marketing and product development opportunities.

 

Although some might argue that the Merino and Crossbred markets are different the reality is that when you are competing with synthetics and do nothing to combat this heavy competition the result is declining demand and declining prices.

 

The proof is in the pudding. When China developed double-sided fabric that mostly consumed NZ wool, the price for NZ wool went sky high. As soon as this market waned the price dropped 40% overnight. If there were other products to step in and take its place the drop would not have been so dramatic.

 

If the New Zealand wool industry is to introduce a wool levy they should look at the AWI as a model.  While not all may agree with AWI’s wool levy spending you cannot deny that some amazing projects have been the result of their work and influence.

 

At least it appears that the debate for a levy has started in New Zealand as the Federated Farmers Meat and Wool Council voted last week to support a compulsory wool levy on wool producers. There was a clear preference for any such levy to be applied on the context of a robust business plan.

 

In an article published in Otago daily Times Waikoikoi farmer Blair Robertson said ”We’ve had lots of different levies over the years for the industry and at the end of the day farmers saw very little return,”.

”Going forward we have to make sure the money gets to where it needs to be – marketing and promoting wool products to end customers.”

He said in the past bureaucracies had grown around the sector which chewed through millions of dollars while providing very little in return.

”Farmers need to be actively involved in moving the industry ahead,” he said. ”We can’t just stand by and let people who don’t fully understand all the issues involved make decisions on our behalf.”

The Council also voted in favour of the Federation advocating for WRONZ (Wool Research Organisation of NZ) for additional research and development to be funded for strong wool, and greater transparency on funded projects.

Source: Otago daily Times

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