Purpose of report
To explore a vision for grower representation in the New Zealand wool value chain.
Background
Wool was once New Zealand’s most valuable export product – it was to our economy what dairying is today. Currently, however, the New Zealand wool industry is weak and fragmented to the point of being dysfunctional. This is not a judgement of the individual businesses involved, but rather a symptom of the commoditization of a product along a convoluted supply chain.
In 2009 New Zealand sheep farmers voted, by a slim margin, to discontinue the wool levy paid to Meat and Wool New Zealand.
Four years on it has been established that wool growers are now ‘under-represented’ in a number of areas.
This representation – what works, what doesn’t and what would it look like for New Zealand wool growers – is the focus of this report.
Key Factors for Success
Successful industry representation has several defining features.
- The first is elected representatives simply doing what they commit to do.
- Great industry representation is PROACTIVE.
- Elected representatives are approachable and respectful of their industry members.
When all these factors combine, the result is an overwhelming sense of positivity. While all the participants are fully cognisant of the issues and challenges facing the industry, they are confident that everyone is pulling in the same direction. In the case of New Zealand wool, the following must also apply:
- Grower, Government, key decision-makers, media and community acceptance of the true value of the New Zealand wool industry.
- Combined grower and Government funding.
- Awareness and adoption of research outcomes.
- A cohesive and progressive wool industry throughout the value chain.
- Enhanced awareness and thus improved global market position for woolen textiles – with an emphasis on New Zealand wools.
- Financially and environmentally sustainable land use.
Recommendation
- New Zealand wool growers need to be focusing forward as an industry – to be looking to realign the value chain that begins with us, the producers.
- Collective producer investment in industry representation and R&D provides cohesion and in turn, strength to growers.
Proposal
- Levy set at an initial 0.03c per kilogram from growers at first point of sale.
- Matched by Government investment to make up a total 0.06c per kilogram of greasy wool sold.
- Based on figures estimated by the Beef + Lamb Economic Service the total greasy wool sales for this year (2012/ 2013) will be 172,600 tonnes
- Doing the basic maths results in a total Wool Levy income of $10,356,000 per annum.
Allocation
There are several factors that must be built into this programme.
- Equivalent of Government contribution must be allocated to Innovation, Research and Development to avoid any criticism of industry protection (World Trade Organization requirements).
- There must be surety around funding for the Campaign for Wool.
- A small, effective team of dedicated people will be pivotal in the success of this programme.
Sandra Faulkner
