Farmers accept fibre has minimal worth

By Philippa Stevenson

Farmers know that wool has become a costly by-product of sheep farming but have yet to deal with the political hangover of the good times, says a former farmer leader.

Bill Garland, a former Federated Farmers meat and wool chairman, said that "in the real world farmers have recognised the demise of wool."

On farm, they had focused increasingly on meat, making huge productivity gains, while wool returns had slumped to about equal those from pelts and hides.

"And there is no producer board for pelts."

He said the industry had yet to make the same reality check of the political structure - the Wool Board - as it had of wool.

Mr Garland, of Waikato, is a member of the Business Development Group, which instigated the latest investigation of the industry, to be done by consultants McKinsey & Co and funded by the board at a cost of $1.7 million.

He said that despite synthetic fibres' inroads against traditional wool products, big opportunities still existed for wool "and we really need to have a decent look at wool research and its support structure on behalf of farmers."

Mr Garland said growers' levies would still need to be collected but could be spent in the most productive way without the industry's present costly structure.

In Canterbury, another former farm leader, Edward Orr, said that after a year-long study of the industry he also believed that "the Wool Board, as it stands, must go."

"Its statutory power to compulsorily levy growers must be abolished. During my investigation I was unable to find any reason for the existence of such a large and costly organisation, which gobbles up millions of dollars of growers' money with little if any return to levypayers."

Mr Orr, the immediate past Federated Farmers meat and wool section chairman, said growers needed to involve themselves with wool's end-users because current management, including blending good and poor wool types, forced it into the commodity bracket.

He commended the approach of Merino New Zealand, the strategy of which was to position Merino wool at the high end of the market.

Meanwhile, the present Federated Farmers leadership has endorsed the principle of the McKinsey study after a presentation by the consultancy.

The company principal Andrew Grant, who has toured the country in the past week talking to growers, said the 75-year-old American-based company had served more than 100 of the world's top 150 businesses.

"We feel we have been given a mandate that if the facts say the Wool Board should not exist going forward, we're going to say that."