Thursday, July 7, 2022

Farmers asked to fund wool promotion

Members of the global Campaign for Wool are prodding New Zealand to firm up its contribution, just as talk surfaces again of farmers being asked to directly fund wool promotion. Tim Fulton reports.

New Zealand’s representative for the Campaign for Wool, Stephen Fookes, says some of the partners feel this country isn’t getting the best value from its involvement.

While NZ is doing its bit to create awareness of wool, particularly strong fibre, it is not actually showcasing what it produces, he says.

In contrast, Australia, South Africa and the United Kingdom invest in their own targeted promotions as well as the global campaign. Australia is also showing interest in co-operating with NZ in jointly promoting “Australasian” interior textile products.

Federation of Wool Merchants president Shaun Ryan believes it’s time for farmers to chip in again.

NZ has raised $1.8 million in voluntary royalties in the first three years of the campaign. About $1m of this has gone into the global fund, with the remainder spent locally, mostly on last year’s Shear Brilliance promotion in Wellington.

The funding is generated by merchants and brokers through wool-testing centres but unlike many other contributing nations, NZ growers aren’t financing it directly and neither are the exporters.

Ryan understands campaign founder and patron Prince Charles made it clear on his recent visit here that some member countries want NZ to clarify its future commitment to the programme.

Ryan sees signs of the campaign taking hold, such as lamb wool being traded at a premium to ewe fleece. He suspects this reflects the campaign is improving the perceived value of apparel fibre and suggests it’s realistic for NZ producers backing the campaign to contribute 1c/kg at point of sale, or about $1.50 per bale.

NZ wool merchants currently put 0.25c from a kilo of wool toward the campaign, while brokers pass on 0.50c. NZ-based exporters that contributed initially have since withdrawn because not all exporters were involved.

Farmers voted by a slim majority more than three years ago to end the compulsory grower levy for wool research, training and infrastructure.

But the wool levy question is not yet old hat. Beef + Lamb New Zealand has asked for an independent analysis of the impact of the 2009 wool levy vote in response to a successful remit to last year's annual meeting.

B+LNZ chairman Mike Petersen says the organization itself isn’t carrying out the review, as the board

decided this review should be undertaken and overseen by a separate review group. Derek Daniell, the proposer of the remit is the chair and it is anticipated that a couple of members of the Wool

Levy Review Group will present the findings to the annual meeting at the Wanaka Show on March 8.

Time for a clean-up

One of the difficulties in financing New Zealand’s global campaign contributions has been the onus on brokers and merchants to keep up the payments.

Campaign affiliates have been funding it piecemeal from a number of places but ideally the collection system would be centralised, Campaign for Wool’s New Zealand representative Stephen Fookes said.

Until recently merchants were funding the campaign out of their own pockets, assisted by brokers and a group of exporters who were taking out a royalty at the scouring and dumping stage.

Those exporters later withdrew, however, after deciding it was inequitable to continue if only part of their sector was involved.

While merchants and brokers have increased their contributions to compensate, it was felt that the system was becoming too messy.

“We’ve had a number of discussions with the brokers, merchants and government on the most appropriate funding system. And it’s still up in the air because there’s some suggestion to reintroduce a wool levy.”

Whatever the result there, Fookes believes it needs to be recognised that other major countries provide agriculture significant support.

However, he also hopes the first quarter of 2013 will bring progress in the wool industry’s attempt to streamline itself.

“We’ve got too many committees, we’ve got too many groups. We actually need restructuring and amalgamating. That’s where our concentrated effort is.”

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