AUSTRALIAN wool growers should get a vote on how their levy funds are spent, in the 2018 WoolPoll, former Australian Wool Innovation director and past WoolPoll chair John Keniry said today.
Dr Keniry said wool growers should be able to vote on the proportion of levy funds to be spent on research and development vis-a-vis marketing in the 2018 WoolPoll.
He has also suggested that if there was no government intervention in AWI after recent events involving its chairman Wal Merriman, growers had the opportunity to vote “zero or low” in the 2018 WoolPoll.
WoolPoll is a one-person one-vote ballot held among AWI shareholders held every three years to choose the wool levy for the next three-year period to fund wool research, development and marketing activities by AWI. Growers vote on five levy options, including a zero option, which have been approved by the AWI board after suggestions from industry and the panel.
Dr Keniry’s levy proportion idea is expected to be supported by some wool growers, but newly appointed 2018 WoolPoll Panel chair, South Australian grower Sydney Lawrie does not support it.
“That’s definitely not up to me to give them that opportunity.
“It’s really not for me to comment on; it’s got absolutely nothing to do with what WoolPoll is actually about at this stage; WoolPoll has nothing to do with voting on that.”
Sheep Central asked if the AWI board had the ability to give its shareholders a say on levy split or if the directors had discussed varying the mix. An AWI spokesman replied that “there will be a range of decisions to be made by AWI and the WoolPoll Panel in 2018 – with the overall objective of ensuring the integrity of the poll process that enables wool growers to determine the levy rate they pay for RD&M.”
AWI announced this week that Mr Lawrie had been appointed “to chair the independent 2018 WoolPoll Panel” and “will first set about establishing an independent panel of wool growers from across Australia.”
AWI said it will be calling on wool grower representative groups and state farm organisations to nominate three growers for the WoolPoll Panel, including a grower under 40 years and a female. This recommendation from previous panels has encouraged fresh ideas and ensured panel members are linked into a range of grower networks, AWI said.
The panel will also include a representative from the Australian Government and AWI, and will work closely with organisations and networks to ensure the broad range of wool grower interests from across the country are represented in WoolPoll 2018, AWI said.
Opportunities to improve WoolPoll – Keniry
Dr Keniry was the original WoolPoll chairman and said there was an opportunity to vastly improve WoolPoll in 2018.
“One of the message that he (Mr Lawrie) could take on is that the voters should be given a vote on what proportion of expenditure should be on research and development vis-a-vis marketing.
“That’s always been a serious deficiency with WoolPoll; that growers have never had the opportunity to vote on the split,” he said.
“I think there are a lot of people like me who think the split in favour of marketing is now too high.”
AWI’s marketing spend has grown from zero in 2000, to the current levy expenditure of 40pc to research and development and 60pc to marketing.
“That split has gone to 60:40 without people every having a choice; they’ve only ever had a choice to vote on the levy, not the split.”
Dr Keniry said there is also an opportunity to improve the quality of information and its presentation in the WoolPoll 2018 booklet sent to growers, which will effectively be an invitation to invest in AWI.
“The quality of the last few WoolPoll booklets in terms of the quality of information, has, in my opinion, been pretty poor.
“If you compare it with the capital market, the WoolPoll booklet doesn’t provide anything like the discipline and the quality of information of companies raising capital,” he said.
“At the end of day, you’ve got the choice to vote zero, which is the equivalent of putting the company’s prospectus in the bin, because you don’t think it is any good.”
WoolPoll is an opportunity to make views known
WoolProducers Australia chief executive officer Jo Hall said as a grower owned corporation AWI must enable growers to set the direction of key industry decisions, including the proportion of their levies that they want invested in R&D and marketing.
“AWI actively promoted the ability of levy payers to vote ‘zero’ in WoolPoll if they are unhappy with the company or board’s performance.
“This places growers in the untenable position of having to weigh up the value of investment in industry research and development against the performance of the board,” she said.
“However, as one of only two genuine ways that growers get to have a meaningful say in the direction of their company, if wool growers are not happy with how their company is working for them, they must make their views known.”
Victorian wool grower John Pola also supported growers having a say on the R&D and marketing levy spend mix.
“At the moment, marketing, it’s all falling into place isn’t it” But in five years’ time they might have to do a fair bit of marketing to keep it going.
“It’s our money, we should be able to tell them what we want to do with it,” he said.
“I suppose if I want something and I don’t get my way, because everyone has voted some other way, then I’ve got to fall into line.
“But I think we should get a vote on all of this, because as I say, ‘It’s my money Jack and that’s all there is to it’.”
Stud breeders have chaired WoolPoll since 2009
Dr Keniry said he wasn’t surprised that with Mr Merriman, the co-principal of the Merryville Merino stud, as AWI chairman, stud breeders would be put into positions that he sees are important.
Since Mr Merriman was elected AWI chairman in 2008, every WoolPoll Panel has been chaired by a stud breeder – Victoria Downs stud principal Will Roberts in 2009, 2012 and 2015, and Mr Lawrie, a co-principal of the Collandra North stud in South Australia next year.
“The WoolPoll chair has always been appointed by AWI and when I was chairman, that’s what happened,” Dr Keniry said.
The Federal Government also had a role in appointing Mr Keniry as chairman of the first WoolPoll Panel in 2000. He was also panel chairman in 2003 and 2006. Mr Keniry said the WoolPoll panel’s independence from AWI was not required under the Statutory Funding Agreement.
“But if AWI wants to dominate it (the panel), it seems to me because they are paying the bills and basically having a saying as to who is on it, then they obviously can have a very large amount of influence.
“It’s delusional to think that they are completely independent, because they are not, and they don’t have to be under the statutory funding agreement.”
When asked if he was selected for the 2018 WoolPoll role by Mr Merriman, Mr Lawrie said he hadn’t spoken to the AWI leader since the Royal Adelaide Show in September.
“I didn’t know anything about this at all, the chairman’s position, until about a month ago.
“I don’t see myself just as a stud breeder, I see myself more as a wool grower and a person running a business and that’s why I am stepping up to take the opportunity,” he said.
“Wool grower groups will get to put forward their representative and we are going to get people from a wide range, hopefully some under 40 years and some females and have a really good mix from all different parts of the wool-growing industry,” he said.
“I’m looking forward to putting together a group that is very independent who can have their say and get people out to vote in the upcoming WoolPoll.”
WoolPoll 2018 to be under scrutiny
Dr Keniry said the 2018 WoolPoll would be conducted under closer scrutiny than before.
“My view is that enough has happened that there should be some sort of government intervention in AWI.
“But if that doesn’t happen, then my opinion is, the opportunity to make something happen will be to vote ‘zero’ or low at WoolPoll and force the issue,” he said.
“Importantly, with WoolPoll there are no proxies, and it usually gets a very good turn-out – usually 60-70pc of the votes are cost — so this is a really good opportunity for the growers to express a view on AWI.”
Dr Keniry said if a zero vote was successful, it would be similar to the 12 months without a levy after the Australian Wool Research and Promotion Organisation was disbanded and AWI was established.
“If there is a zero vote, there are two possibilities: one is that the government will say they voted for zero, so there just won’t be an AWI, and then there would be no statutory funding agreement because there is no government funding and it doesn’t have to collect any levies.
“Or they could take the view that the growers are dissatisfied so now we better look at a restructure and start again with another organisation and WoolPoll, like they did in 2000,” he said.
“It’s not as if it has never happened, we’ve been there before.”
WoolPoll chair role is a great opportunity
Mr Lawrie, with his wife Therese and young family, owns and manages a sheep and cropping enterprise at Tumby Bay on South Australia’s Eyre Peninsula. His farming operation includes around 4000 sheep and 7000 acres of wheat, canola, barley, peas and oats.
He sat on the 2015 WoolPoll Panel which unanimously suggested a 1.5pc option be included, but this was ignored and the five options were zero, 1 percent, 2pc, 2.5pc and 3pc; unchanged from previous polls. AWI said Mr Lawrie has actively supported the next generation of wool growers as a committee member of AWI’s National Merino Challenge, is on the Eyre Peninsula Stud Merino Breeders Committee and the Tumby Bay Silos Committee.
Mr Lawrie said being WoolPoll chair was a great opportunity for him as a young wool grower and he hoped to increase the voter turn-out in 2018.
“I just think it is such as important process for wool growers – I’m really looking forward to it.
“The important thing about WoolPoll is that growers actually do get to determine their levy rates for research, development and marketing.”
WoolPoll voting packs will be sent to eligible growers towards the end of September 2018, with votes to be returned by November 2.
The last WoolPoll says it all for me. It was recommended that they include 1.5% as an option by the industry. Then proceed to offer:
Remind me why Australian Wool Innovation is entitled to ignore the will of the growers?
I still think the best way to improve the industry is to create competitive tension for levy funds. That is, every few years when the WoolPoll is voted on, growers have three options as to where they could direct their funds. They could continue to direct it to AWI if they think that’s where the money is best spent, or they could choose to direct it to some other organisation that potentially might spend they money in a way that is more aligned with the growers needs.
The problem is the small amount that AWI does direct to on-farm R&D is not producing results. The focus seems to be wild dog control and extension; hardly things that will give us the productivity gains we need in what is a very labour intensive business. I think a zero levy to AWI and a research levy directed to MLA would be more likely to give us some useful outcomes.
Having sat on three WoolPoll Panels, all of what Dr Keniry says is correct. Over the years the board of AWI has exerted more and more control. First of all, the AWI staff person — who was in attendance to provide answers to any questions panel members might have — was replaced by a board member and then as we saw at the last WoolPoll, the board totally ignored the recommendations of the panel.
I believe change has to be more radical than what Dr Keniry has suggested. I think the federal Department of Agriculture should establish a special independent unit that conducts levy polls for all the RDCs to set levy rates. What we have now is RDCs — as receivers of the compulsory grower levies — setting their own rates.
Once growers have set the various commodity levy rates for a particular RDC, then the RDCs should go to their growers presenting various “packages” they could deliver for that rate.
We should not have to destroy what exists, in order to effect change. We should not have to sack board members to effect change. What we want is for board members to manage and oversee the expenditure of the levies. We do not want them to be in total control of the commodity.