Wool levy could be back

05:43, May 19 2014

Sheep farmers are being asked to vote in favour of a referendum to reintroduce a wool levy that would fund $4.6 million of industry good activities each year.

The wool levy was stopped after farmers rejected it in a close vote in a referendum in 2009 that caused Meat & Wool New Zealand to be renamed Beef + Lamb New Zealand.

Farmers have, however, watched wool research and development shrink and there is increasing pressure for a levy to return.

The referendum is to take place on October 10 and will ask sheep farmers to fund a new industry body by approving a levy of between 2 and 5 cents for each kilogram of greasy or slipe wool at sale.

This would generate $4.6m based on 3c a kilogram for the 154,000 tonnes of wool produced in New Zealand each year. About 17,000 sheep farmers will be eligible to vote.

A Wool Levy Group (WLG) has been formed to run the referendum led by chairwoman Sandra Faulkner with a board of WRONZ chairman Derrick Millton, Federated Farmers president Bruce Wills and his meat and fibre chairwoman, Jeanette Maxwell, Primary Wool Co director Hamish de Lautour, Cavalier Corporation chief executive Colin McKenzie and Wairere Rams owner Derek Daniell.

Faulkner said the new industry good body would represent all wool producers and provide a much-needed voice for the sector.


"Sheep farmers can help shape the direction of the wool industry by voting 'yes' in a referendum to reintroduce a wool levy to fund industry good activities of benefit to farmers and the wider wool industry," Faulkner said.

"We have a great opportunity to create momentum off the back of improving prices for wool."

Farmers were represented beyond the farm gate by Merino NZ, Primary Wool Co-op and Wools of New Zealand which were doing a great job, but about half of farmers did not belong to these companies, she said.

A farmer levy would mean that an industry good body would be consistently funded and work in the best interests of all wool producers, she said.

A positive vote by voter numbers and weighted sheep numbers is needed for the referendum to be presented to the Ministry for Primary Industries before regulations can go ahead under the Commodities Levies Act.

Faulkner said the average value of raw wool exports increased by 38 per cent since 2010 and the industry was worth $700m.

"New Zealand is the world's third-largest wool exporter, supplying 45 per cent of the world's carpet wool.

"There are 30 industry good bodies in New Zealand, yet wool is the only primary sector which is not represented.

"We can make a difference if we maximise our opportunities to shape a great future for our industry but we need a vehicle to do this."

The referendum follows work by the Wool Levy Review Group established in 2012 to investigate collective farmer investment.

The research found there was a case to establish a industry good organisation for activities such as promoting wool, investing in research and development and linking with government bodies.

Farmers voted in favour of the proposal at the Beef & Lamb annual meeting in March.