AUSTRALIAN Wool Innovation chairman Wal Merriman sitting behind a one-way mirror observing the discussion of a focus group has affronted many growers.
Dissension has been building in the bush against the AWI chairman for some time. In a way I find myself in some sympathy with Wal Merriman; he is sadly symptomatic of a much bigger problem.
I think I have known every chair of our statutory wool research and promotion organisations whatever their name, since Sir William Gunn. Mr Gunn became chairman of the organisation that preceded the wool board, the Australian Wool Bureau, in 1958.
In the late 1960s, I was a member of the Australian Wool Industry Conference and Gunn needed the block of votes of which I was one, for the introduction of the Reserve Price Scheme (RPS). Gunn told me over a very expensive dinner at the old Australia Hotel in Collins Street that he came to the wool industry because he believed it was corrupt and needed reforming.
Mr Gunn and probably every chairman since, including Mr Merriman came to the position with the very best intentions. However, in the end most were allured by the ‘honey pot’, the statutory wool tax of 2 percent of the price or amount paid for the wool, net of GST, handling, storage and transport costs. The institution they hoped to reform finally consumed them.
In my view the reason is simple, the system is flawed. How many more times do growers have to witness yet another organisational failure before the penny drops? And it’s not the chairman, nor the board that is the problem, it’s the statutory tax. This ‘honey pot’, together with the blurred area called promotion, creates a toxic mix.
The collection of statutory taxes or compulsory levies, call them what you will, should never be contemplated unless there is clear evidence of market failure.
As a wool grower and a player, albeit a very small one, in the textile trade, I believe there is no substantive evidence of market failure in respect to promotion. What’s left of our once great wool industry is predominantly in the luxury fibre market. The qualities of this luxury fibre are well understood by the brands and these brands all compete or collaborate to promote their product to the market. There is absolutely no evidence of market failure.
However, in respect to research there is clear evidence of market failure, and also probably in the area of the collection, analysis and distribution of statistical data. AWI’s is not the model anyone in the world would ever contemplate establishing if it was intended to create a robust, cutting-edge research-funding organisation, an organisation to fund creative research; the very foundation of a productive industry for the 21st century.
We could look to successful models around the world like Silicon Valley. Yes, perhaps a bit ambitious for us, but what about Cambridge University, who were jolted out of their slumber by the competition from Silicon Valley? Professor Jeremy Sanders, Pro Vice Chancellor at the University of Cambridge, said recently, commenting on the burst by the university back onto the world research stage, “hire people smarter than you, give them as much freedom and research funding as possible, stand back and reap the harvest ten years later”.
Exciting things are happening. In July, I visited the University of Leeds. Leeds was for many years one of the major British Textile centres with strong textile research activity. However, in the 1990s the Department of Textile Industries closed due to falling student numbers, reflecting the decline of British textile manufacturing. In 2000, the new School of Design was established and brought together textiles with fashion and design and created a vibrant and thriving activity.
Recently, Prof. Chris Carr has been appointed to re-establish Leeds as a global textile research centre focused on the textile technology/design interface. Prof. Carr is a man with a big vision and strong industry support. His mission is to re-establish the pre-eminence of British Textile Industry, particularly in sophisticated niche areas. This is the sort of leadership, energy and vision our industry needs now at the greasy wool end.
With Australia’s sheep flock reduced from nearly 180 million to about 74 million and only an estimated 38.5 million ewes of which about 70pc are Merinos, we too are in desperate times.
Research is essential to underpin our productivity for the future. To get serious about research our industry must withdraw from promotion and establish an organisation properly structured and funded to deliver the research results our industry so desperately needs.
Free from the diversions of promotion and ideally free of a statutory tax, our industry might also manage to escape the biggest quagmire of all; the politics that have continually dogged our industry.