Woolgrowers to vote on levy

17 Aug, 2006 07:00 PM
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WOOL growers will have to vote for a levy of more than two per cent in the next wool poll if they want Australian Wool Innovation's activities to include more marketing and promotion.

WoolPoll voting kits will be mailed to growers in mid-September, asking them to tick their levy preferences between zero and three per cent to fund AWI's research and development, product marketing and grower services for the next three years.

At the launch of WoolPoll 2006 in Sydney last week, poll chairman John Keniry said any increase in funding above the current 2pc levy would be directed totally to marketing.

However a vote to keep the levy without an increase would mean "a vote for the status quo", he said.

Dr Keniry said he didn't support any particular outcome as WoolPoll chairman and insisted his job was to "separate the poll from the politics".

But he did make it clear that, despite all the controversy and calls for AWI to boost its role in marketing, that would only be likely if growers voted for the levy to be increased.

"But keep in mind that AWI has tagged a higher proportion of its revenue for marketing compared to 2003," he said.

Dr Keniry has a $1 million budget to promote this year's WoolPoll and encourage more farmers to vote in the poll.

He said growers should vote as though there were no merger talks between AWI and Australian Wool Services (AWS).

He urged wool producers not to lodge a protest vote against maintaining the levy for AWI, which was attacked by wool processor Laurence Modiano at the recent World Merino Conference.

With plans afoot to merge AWI with Australian Wool Services (AWS), some growers are also worried their funds will be used to pay a $27 million debt owed by AWS in the United Kingdom.

"Every year there is a WoolPoll there is always some issue that arises within the wool industry which enters the WoolPoll debate," Dr Keniry said.

"This year AWI and AWS have created the issue themselves with a proposed merger of the two.

"As far as WoolPoll is concerned, that's out there, and voters should continue as though it hasn't happened.

"We have to have a wool poll ‹ it's a requirement of law.

"Growers have to make a decision about how much money is spent on marketing and research."

In 2003, 55 per cent of eligible wool growers cast their votes, which Dr Keniry said was a great achievement compared to similar polls conducted by Meat and Livestock Australia which receive about a 10 to 11pc response.

But this year he wants more wool growers to have their say, and will take a road show across Australia canvassing AWI's strategy for 2007 to 2010.

Projections based on average annual wool production and prices show that a vote for a 3pc levy would mean an $82 million annual income to AWI .

An increase to 2.5pc would generate $71m, while a vote to stay at 2pc would mean an income of $60m.

A 1pc levy would equate to a $38m income, and a 0pc levy vote would effectively mean AWI would have to pay out its existing contracts "and turn out the lights".

Meanwhile, wool industry peak body WoolProducers has poured cold water on recent speculation over the introduction of an international wool agency, to be funded by an additional tax on Australian growers.

WoolProducers president Robert Pietsch said he would not support a tax on growers for funding an international company to generically promote wool.

Mr Pietsch has also rejected calls by Mr Modiano for a $10 to $15 tax on wool bales in Australia.

"Another tax on growers, who are already doing it very tough with low prices and continued poor seasonal conditions, is not something that we support," Mr Pietsch said.

"There is a mechanism for collecting levies in Australia for demand building activities and innovation, which is the upcoming WoolPoll.

"That is where Australian woolgrowers will determine the amount they wish to invest.

"As an industry, woolgrowers are focused on ensuring they are making the best possible investments with levies.

"WoolProducers will continually lobby and work cooperatively with industry-owned companies to deliver a balanced portfolio of activities, ranging from on and off farm innovation through to demand creation.

"An international body collecting levies in Australia, which Australian growers have no control, is not being considered."

But WoolProducers had recently supported the introduction of a short-term $1.50 per bale levy to help fund the Australian Wool Services (AWS) test marketing campaign project (TMP) in the Unites States.

AWI chief executive officer Dr Len Stephens said the process of integration with AWS was now under way, following the details outlined in the memorandum of understanding.

"The two issues must be kept separate in order to provide a clear and definite outcome on levy rates for research, development and product marketing in the Australian wool industry," said Dr Stephens.

"WoolPoll must proceed under the Wool Services Privatisation Act 2000, which states that a recommendation must not be made later than the third anniversary of the previous recommendation.

"This means we must go to the Federal Government with a clear recommendation by December 2006.

"There is no provision to waive this, and therefore we must continue to seek levy payer involvement in the WoolPoll process.

"WoolPoll will give growers clear choices regarding investment of levies.

"However it is important for woolgrowers to understand that no AWI shareholders or any parent company will be exposed to the pension fund liability.

"As a result, shareholder levies will not be used to cover the pension fund, but rather both companies will work cooperatively to solve the liability."

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