In­crease the levy

Lo­cal wool pro­ducer chal­lenges lower con­tri­bu­tion sup­port

Southern Riverina news - - NEWS -

Fin­ley farmer Bruce Atkin­son be­lieves more can be done to sup­port the wool in­dus­try through an in­creased pro­ducer levy.

Mr Atkin­son said he was dis­ap­pointed to learn last week that vot­ers had given the most sup­port to a levy of only 1.5 per cent.

With the levy dic­tat­ing the amount of fund­ing Aus­tralian Wool in­no­va­tion will re­ceive for the next three years, he said the fig­ure should have been at least two per cent.

The Aus­tralian Wool In­no­va­tion (AWI) is re­spon­si­ble for re­search into wool, as­sist man­u­fac­tur­ing and pro­motes the prod­uct.

Mr Atkin­son said a 1.5 per cent levy may only have short term ben­e­fits fi­nan­cially to wool grow­ers.

‘‘I’m not sure if that (a 1.5 per cent levy) is the cor­rect way to go long term and that has a big ques­tion mark over it,’’ he said.

‘‘If we have this wrong then we have to wait an­other three years be­fore we can re­view the levy we pay.

‘‘It’s not the end of the world but if there’s enough dis­con­tent for 1.5 per cent then there will be a big push for two per cent and it will prob­a­bly get up.

‘‘It’s not a die in the ditch out­come though, and while wool prices are high we’re prob­a­bly de­riv­ing enough rev­enue with 1.5 per cent.

‘‘But who’s go­ing to say wool prices will re­main where they are?’’

Mr Atkin­son said with only a 1.5 per cent levy, the in­dus­try could miss out on vi­tal wool pro­mo­tion, which he strongly sup­ports.

‘‘The 1.5 per cent may ap­pear to gen­er­ate the same amount of rev­enue as the two per cent given the in­crease in value of wool — in dol­lar terms it would be a sim­i­lar num­ber af­ter what it was his­tor­i­cally.

‘‘But there are lot less wool grow­ers con­tribut­ing, so in ac­tual fact it could well be a de­crease in rev­enue to AWI.

‘‘The two per cent would help the AWI gen­er­ate suf­fi­cient funds to run the pro­grams it does.

‘‘I wouldn’t like to see it starved for re­sources sim­ply be­cause wool grow­ers weren’t con­tribut­ing enough.

‘‘Ef­fec­tively 1.5 per cent may not con­trib­ute as much to the rev­enue and we don’t know what the fu­ture of the (wool) price will be.

‘‘Con­ceiv­ably AWI won’t have the re­sources we ex­pected and be able to per­form the func­tions we ex­pected, so there is a risk it will be un­der re­sourced.

‘‘Wool is a niche, pre­mium, dis­cre­tionary prod­uct so peo­ple need to be en­cour­aged to buy it.’’

Prior to the de­ci­sion made at WoolPoll 2018, the AWI was pro­mot­ing two per cent as the levy rate.

Mr Atkin­son said he be­lieves some in­dus­try dis­con­tent with AWI op­er­a­tions may have af­fected the re­sult.

‘‘There’s been quite a con­certed drive to change the com­po­si­tion and what AWI does so there’s been dis­con­tent to­wards AWI.’’

Mr Atkin­son said there has re­cently been a small de­cline in wool prices, he be­lieves it’s come from ex­ter­nal fac­tors af­fect­ing most com­mod­ity trade.

‘‘Pretty much most com­modi­ties are drop­ping ex­cept for coal. There’s in­sta­bil­ity in world trade at the mo­ment which is a big fac­tor.

‘‘The Chi­nese are heav­ily in­volved in the wool in­dus­try and any­thing that will up­set them with up­set Aus­tralian wool grow­ers.

‘‘I think world trade in­sta­bil­ity is sort of con­tribut­ing to the de­cline in wool value.’’

The wool levy is ex­pected to come into ef­fect from July 1, 2019.

Kristin King was one of three win­ners in this week’s Fin­ley Christ­mas Shop­ping Bo­nanza draw.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.