Wool industry control battle continues

05 Aug, 2017 04:00 AM
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 State farming organisations are campaigning to have WoolProducers Australia legislated as the representative organisation to oversee AWI's major expenditure decisions.
State farming organisations are campaigning to have WoolProducers Australia legislated as the representative organisation to oversee AWI's major expenditure decisions.

STATE farming organisations have banded together to campaign for greater oversight of Australian Wool Innovation’s (AWI) expenditure amid criticism there has been a “lack of progress” by the industry body.

NSW Farmers is the latest to join Victorian Farmers Federation, Livestock South Australia, WAFarmers and Tasmanian Farmers and Graziers Association in backing a representative organisation for woolgrowers to oversee AWI’s main financial decisions.

Delegates at NSW Farmers’ 2017 annual conference last week voted in support of appointing WoolProducers Australia (WPA) as the grower representative in an effort to strengthen oversight of the spending of the wool industry levy.

The vote was made on the eve of explosive comments made by Meat and Livestock Australia managing director Richard Norton who accused AWI of failing to advance on footrot and Ovine Johnes Disease (OJD) investment projects, as well as mitigating mulesing threats to the industry.

The majority of the State farming organisations are supporting WPA as the representative group, due to it representing the single biggest group of woolgrowers through its network with about 18,000 members.

Its member base is ahead of broad wool which holds about 1650, Pastoralists and Graziers Association of WA with about 1300 members, Australian Association of Stud Merino Breeders with about 950 and Australian Superfine Woolgrowers Association with about 100.

WPA chief executive Jo Hall said the move was necessary to ensure levy expenditure aligned with levy payer priorities.

Ms Hall said consultation between industry and AWI was not “robust”.

While most research development corporations (RDC) sit under the Primary Industries Research and Development Act, AWI is under the Wool Services Privatisation Act, which does not require a representative organisation.

“The lack of meaningful consultation between industry and the RDC means that industry issues are often handled in a piece-meal and reactive manner,” Ms Hall said.

“The lack of oversight in the wool industry is at odds with other agricultural industries that have oversight mechanisms.

“MLA is able to, and do, provide support to their relevant peak industry bodies when adverse issues arise or assisting industry bodies in other day-to-day industry issues.

“This is a common sense, industry-focused approach that at times contrasts sharply with AWI’s stance in this area.”

During a Rural and Regional Affairs and Transport Legislation Committee senate estimates hearing in May, AWI chairman Wal Merriman said the Industry Consultative Committee (ICC) was established because “there is such a broad church in the wool industry and different people purporting to represent different interests”.

However, Ms Hall said the ICC had a “long way to go” before it could be considered a genuine consultative mechanism.

“If AWI sees ICC representatives as the conduit between AWI and grower representative bodies, it is incumbent on them to ensure that the ICC is a robust and meaningful consultative process,” she said.

“Change can only come about if wool growers, who would like to see improvements to consultation around levy expenditure, become engaged in the issue.

“As a grower-owned body, levy payers must make their views known to implement changes to industry structure.”

However change is unlikely with amendments to the constitution requiring at least 75 per cent of eligible shareholders’ votes.

After last week’s comments by Mr Norton, a spokesperson for Federal Agriculture Minister Barnaby Joyce said RDCs must demonstrate to levy payers how investments were driving improved returns at the farmgate.

“AWI have an obligation to engage meaningfully with woolgrower peak bodies such as WPA in determining priorities for research and marketing investments,” the spokesperson said.

“Those groups seeking change would need to demonstrate the overwhelming majority of woolgrowers supported any proposal to formally recognise a particular organisation.”

AWI spokesman Marius Cuming said the company was regulated by the Corporations Act and its directors had a fiduciary duty directly to its shareholders to act in their best interests at all times.

“Woolgrowers directly decide the future funding of AWI at WoolPoll every three years and directly elect AWI board members at the annual general meeting every two years,” Mr Cuming said.

“Further oversight of AWI is achieved through Commonwealth government scrutiny, regular external audits, triennial independent performance reviews and the regular ICC meetings.

“Anyone seeking election to the AWI board can do so with the required 100 shareholder signatures.”

Mr Cuming said AWI was proud of what it had delivered for woolgrowers.

“AWI invests more than $3 million annually on extension and consultation and in doing so receives direct feedback from thousands of woolgrowers,” he said.

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FarmWeekly
Annabelle Cleeland

Annabelle Cleeland

is the national sheep and wool writer for Fairfax Agricultural Media

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