News

Growers want AWI review to look at wool levy process and spending split

Terry Sim, February 28, 2018

Walcha sheep breeder and AWGA director Martin Oppenheimer

THE Federal Government’s independent review into Australian Wool Innovation should examine how the wool levy and AWI’s research and marketing expenditure is decided, according to Australian Wool Growers Association board member Martin Oppenheimer.

Mr Oppenheimer is AWGA’s current nominee on AWI’s Woolgrower Industry Consultative Committee and wants the power to set the wool levy and expenditure mix taken away from AWI.

He also wanted the issue of oversight of AWI examined in the review.

“The whole WoolPoll process needs to be investigated in this inquiry.

“The current situation isn’t working for the industry, where the AWI board has way too much power over the options given to wool growers at WoolPoll,” he said.

“That process should be taken away from the AWI board.”

WoolProducers also supports WoolPoll and oversight reviews

WoolProducers Australia chief executive officer Jo Hall said the peak wool grower body supported reviews into WoolPoll and oversight, but she said it has been made clear that the review is not looking specifically at these two issues.

“The review may uncover a number of matters that will lend itself to opening up those debates,” she said.

Ms Hall said WoolProducers wanted reform leading to transparency and genuine independence in the conduct of WoolPoll; the entire voting and election process, including the AWI board nomination committee; proxy allocation and declaration and shareholder access; the operations of the Industry Consultative Committee and the three-yearly review of performance.

Current WoolPoll Panel “has no power”

Mr Oppenheimer said the current WoolPoll Panel was “basically a procedural group that has no power”.

“They have no power to set the rates – they discuss the rates, so that is pretty much a nonsense.”

Before the last WoolPoll in 2015, the AWI board disallowed the 1.5 percent levy option, despite WoolPoll Panel and wool grower body support “as the current rules allow”, he said.

“And that is not working for the industry.”

“It either should be the WoolPoll Panel, or the (AWI) Industry Consultative Committee, but a more representative group that represents the whole industry and all levy payers should oversee WoolPoll, particularly setting the levy options that go to growers.”

Mr Oppenheimer said there more than 20,000 levy payers who are not registered AWI shareholders and therefore not represented by the company. AWI said at December 31 2017, there were 60,257 wool levy payers, while 24,206 of these were registered shareholders.

Levy spend split is “dysfunctional”

Mr Oppenheimer said historically, wool growers have had very little choice on how levy funds were split between research and marketing. AWI currently spends about 40 percent of levy funds on research and 60pc on marketing.

“Again that has come down to the board’s decision; it has been basically you like it or you lump it and again it is not working for the industry.”

Referring to continuing discussions between AWI and MLA over the accessing, storing and analysing of sheep genetic data, Mr Oppenheimer believed the current the genetic research spend of AWI’s levy expenditure is “dysfunctional.”

“The relationship between AWI and other industry bodies – including Meat & Livestock Australia and the Sheep CRC is dysfunctional, it’s not working.

“So it becomes even more important than ever to get the split between marketing and research to an optimum point.”

Mr Oppenheimer believed changes to the WoolPoll structure might be possible before voting started in WoolPoll 2018 in September.

Mr Oppenheimer said the current oversight systems around AWI board also were not working.

“Part of the issue is corporate governance and the board’s inability to deal with things like conflict of interest.

“They’ve clearly failed wool growers on that front, particularly in genetic research.”

He believed the ICC potentially could provide oversight on AWI.

“But the problem is that it doesn’t have any teeth; it’s a consultation vehicle only and the AWI board doesn’t have to take any notice of what the ICC says.

“The ICC can raise issues, but that doesn’t force the AWI board to act on those requests,” he said.

“WoolProducers Australia have put up some options and I think that needs to be formalised, that the ICC needs to have more powers, more teeth.”

Mr Oppenheimer believed the AWI board, led by chairman Wal Merriman, had moved away from investing in the latest cutting-edge genetic tools and serving the whole industry.

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Comments

  1. Malcolm Campbell, March 5, 2018

    It is not about the pasture of the sheep, but about their wool, so don’t pull the wool over your own eyes.
    The future of Merino is beautiful product with focussed marketing to a receptive global consumer. A new generation.

    http://www.malcolmtheweaver.com

  2. Edward Wymer, March 1, 2018

    Here we go again, governance and all that.
    The Wool Taskforce, Diversity and Innovation Report of July 1999, lists 55 major reports, starting with the Philp Report in 1962 till 1999, and it states it is far from a complete list — see page A6.1 — with many more reports since. All of them accomplished nothing.
    The only reason for a review should be obtaining higher prices, which would be brought about by better preparation, classing, testing and lotting, with the emphasis on the price relationship of wool, cashmere, mohair, and alpaca together.
    Wool buyers should be encouraged by offering them better prepared wools to bid on. Grow the best wool you can and present it properly.

  3. Chick Olsson, March 1, 2018

    The AWI only has itself to blame for this; its maverick actions of exclusivity and closed shop syndrome continue.

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