BIG wool growers protesting at Australian Wool Innovation’s governance record have played a key role in voting to reduce the compulsory levy on gross clip proceeds by 25 percent to 1.5pc in WoolPoll 2018.
AWI announced today that growers have voted in favour of a wool levy of 1.5pc to fund research, development and marketing from 2019-22, going against the AWI board’s recommendation for 2pc for the first time since WoolPoll began in 2003.
The result was determined by a count of preferences overseen by Link Market Services and endorsed by the WoolPoll Panel and the Department of Agriculture and Water Resources.
Of the 13,506 votes received, following the allocation of three rounds of preferences, 52.82 per cent voted in favour of a 1.5pc wool levy.
Although WoolProducers Australia said its decision to advocate to lower the current 2pc levy to 1.5pc was not a protest decision or linked to governance concerns, major wool growers and the Australian Wool Growers Association of Australia this week said the actions of former AWI chairman Wal Merriman and the recent critical review of AWI’s performance and governance motivated their support for 1.5pc.
AWI chief executive officer Stuart McCullough said that on first preferences, 88.28pc of wool growers had voted for a levy option of either 1.5 per cent or 2 per cent, demonstrating continued support for AWI’s role investing in research and development, and marketing, on behalf of wool growers.
However, significantly, before preferences were allocated, 44.77pc of votes were for 1.5pc and 43.51pc were for 2pc. The 2018 results also show support for a levy of 2pc or more, at 46.74pc before preferences, was the lowest in the history of WoolPoll and has dropped 31pc since the 2015 figure of 67.86pc.
Click here to see the voting results before preferences.
Click here to see the voting results after preferences.
WoolPoll result is clear message to director Merriman
Large wool growers contacted by Sheep Central who indicated they had voted 1.5pc or lower in the ballot commented on the performance of AWI chairman Wal Merriman, the findings of the review and Senate hearings critical of AWI as factors in their decisions. The Ernst&Young review made 82 recommendations on AWI’s performance and governance, with their implementation still being debated by AWI, Minister for Agriculture and Water Resources David Littleproud and grower bodies.
AWGA president Robert McBride said the 1.5pc WoolPoll result was a clear message to former AWI chairman Wal Merriman to retire gracefully from the board.
“It was a clear message to Wal Merriman to retire gracefully instead of undergoing a protracted battle.
“This has gone on long enough, the wool growers of Australia want closure,” he said.
“We respect Wal’s 10 years of service, but it is now time – the wool growers of Australia have spoken loud and clear.”
AWGA director said wool growers were clearly unhappy with AWI’s performance and all senior management positions at the company should be under review.
Mr Olsson said AWI director David Webster should now be called to explain his “scare-mongering” comments about the impact of a 1.5pc WoolPoll result. Mr Webster told Fairfax that a rising wool usage “trend line”, starting from about 2012 and the most sustained growth in demand for wool in Australia’s history, “would almost certainly stall” if a majority of wool growers voted for 1.5pc over the 2pc option.
WoolProducers 1.5pc advocacy not a protest – Halliday
WoolProducers president Richard Halliday said growers have had the opportunity to have their say on what amount of levy they wish to pay for the next three years, and they have determined that 1.5% is appropriate.”
“WoolProducers strongly believed that 1.5pc would provide ample money for AWI to conduct their current business as well as invest in relevant new areas.
“The last three financial years has seen expenditure by AWI of between $70 and $88M per year and the industry got to a good place with that level of investment,” he said.
“It is important to note that whilst we continue to have concerns around the governance of AWI and their response to many of the recommendations in Review of Performance, these issues were never a factor in our decision to support 1.5pc,” Mr Halliday said.
WoolProducers believes that now that growers have made their decision and the levy has been set, AWI’s focus must continue to be implementation of the review recommendations.
“The review recommendations were made independently to improve the governance and operations of AWI, so they must now get on with implementing them in the quickest way possible”.
“WoolPoll can no longer be considered to be a distraction so AWI must forge ahead to modernise the organisation in the interests of all wool growers.” Mr Halliday said.
AWI to be prudent in balance sheet management
Mr McCullough said AWI has listened to wool growers and had heard their message that they believe a 1.5 per cent levy is the appropriate levy rate to be paying at this time on their wool sales.
“Let me assure wool growers, we are committed to investing your levies effectively and efficiently to deliver results for all wool growers.”
Mr McCullough said AWI would continue to be prudent in managing its balance sheet and would adjust its operations to match available funding as part of the next three-year strategic plan, which commences in 2019-20.
He said the company would endeavour to ensure no loss of momentum in the marketing of wool in Australia and overseas and would continue its targeted investment across sheep health and welfare, reproduction, vertebrate pests, genetics, fibre advocacy, farm automation and software development.
“We recognise confidence in the market and volatility along with other challenging conditions woolgrowers are facing and we are committed to continuing to explore new and innovative ways to make wool growing easier and more profitable for the benefit of wool growers,” he said.
“As wool growers adjust to the seasonal conditions, so will AWI adapt to the democratic choice of our levy-payers. In doing this we will make certain our operations are transparent and lean.”
AWI chairman Colette Garnsey said the board was appreciative of the strong level of participation in WoolPoll 2018 and the level of support for the continuation of the levy.
“I am encouraged that the vast majority of wool growers see the value in AWI’s work and are prepared to contribute towards our R&D and marketing efforts on your behalf,” Ms Garnsey said.
“Let me assure all wool growers, we are committed to building resilience into our research, development and marketing investments. AWI will continue to put the interests of wool growers first.”
Mr McCullough thanked the WoolPoll Panel and its chairman Sydney Lawrie for their contribution and for encouraging participation and ensuring the voting process was conducted in compliance with the regulations.