Research and Development

WoolProducers seeks temporary halt to wool and sheep levies

Terry Sim, June 29, 2020

Merino ewes and lambs.

PEAK grower body WoolProducers Australia wants wool and sheep transaction levy collection halted for 12 months from August this year to help producers recover from the COVID-19 pandemic.

WoolProducers today released findings of an online survey of growers gauging the initial impacts of the COVID-19 pandemic on its growers.

Key findings include that most wool growers believe COVID-19 has reduced income, made farm input and labour access difficult, and the decline in wool prices meant many had withheld or withdrew their wool from sale at auction, leading to reduced cashflows.

The body has recommended a number of short, medium and long-term assistance measures to the Federal Government, including suspending wool and sheep transaction levies for 12 months from 1 August 2020, with a government contribution to Australian Wool Innovation and Meat & Livestock Australia to make-up for the resulting shortfall levy income.

WoolProducers president Ed Storey said the global response to COVID-19 has obviously impacted nearly every facet of how the world operates, and the wool industry is no exception.

“Respondents to the survey estimated an average 32.6 percent financial loss to their businesses during this time and further, over half of the respondents are currently not offering wool for sale,” he said.

The survey feedback from 195 growers from all wool-growing states showed that about 56pc were holding wool for sale either on or off farms, further evidenced in May this year when the national wool auction offering hit a new low.

“The current environment and operations of the wool industry due to the pandemic, both domestically and internationally have the ability to potentially affect the viability of wool-growing businesses in the short, medium, and long term.

“WoolProducers have therefore identified a number of actions that government can undertake to assist Australian wool growers during this difficult time,” Mr Storey said.

The short-term activities are designed to help with immediate cash-flow and support services, including more effective communications regarding currently available government support measures. The medium to long-term recovery policy requests are aimed at trade diversification and other activities to mitigate trade exposure risks.

“Wool growers have repeatedly proven that they are resilient, and we have faced adversity many times before.”

“WoolProducers would like thank those who participated in the survey as it has helped us better understand what is happening on ground and how we can best advocate these needs to government,” Mr Storey said.

WoolProducers’ COVID-19 impact report assistance proposals are consistent with assistance measures suggested to facilitate bushfire and drought recovery.

WPA chief executive officer Jo Hall said WPA had not yet had any feedback from the Federal Government on the COVID-19 assistance proposals. The Federal Government was sent the COVID-19 report late last week.

She expected the Federal Government would have to agree to contribute any shortfall in levies to AWI and MLA before collection could cease for the proposed 12 month period.

“Yes, especially because we know particularly in AWI’s case that they are already, because of the reductions in wool prices and volumes, suffered quite a hit to their budget.

“The asking for the cessation of the transaction and wool levies is to assist cashflow impacts,” she said.

“It’s just a short-term measure to assist with growers’ immediate cashflow situations, because many of our producers are also coming out of drought as well, so they already have limited cashflows.”

Sheep Central has sought comment from the Minister for Agriculture David Littleproud, the Department of Agriculture Wat and the Environment, AWI, MLA and the Australian Wool Growers Association.

A copy of the full report can be found here or at the WoolProducers Australia website here.

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Comments

  1. Chick Olsson, June 30, 2020

    Excellent ideas from WoolProducers. All levy cessation is a key to economic survival. Well done, Jo Hall and Ed Storey

  2. Russell Coad, June 29, 2020

    It makes a lot of sense that the levy be withheld at this time. As the AWI CEO admitted, 60 percent of the wool levy is being spent on marketing and promotion into the retail market which does not currently exist because of this pandemic.

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