Meat industry hit by $6.3 million cuts

Funding for the promotion of sheep meat and beef has been cut by $1.35 million and the future of shearer and woolhandler training is in limbo after Meat and Wool New Zealand slashed $6.3 million from its budget this week.

The budget cuts and 23 redundancies announced by the producer board last week were in response to farmers voting by referendum earlier this year to end their annual payment of about $6.5 million in wool levies.

Meat and Wool New Zealand (MWNZ) chairman Mike Petersen said he had no choice but to adjust the budget, and he was blunt with his reasons.

"These are the implications, and I made it clear that any income stream cut will have repercussions across the sector."

Farmers have contributed $300,000 a year in wool levies to MWNZ to help pay for the training of 2000 shearers and shedhands.

The Government contributed a further $900,000 but Mr Petersen said it was made clear if industry did not contribute, the Government would not either.

The wool industry has said it might replace MWNZ's funding, which ends next April, and Mr Petersen said it was time for them to match words with action.

Wool Exporters Council executive manager Nick Nicholson said his executive had not formally discussed the matter.

"We have said publicly that if there was a need or a hole in the system, we would certainly be having a look at it."

But, Mr Nicholson said he had read reports of farmers asking whether they should be funding shearer and shedhand training at all, raising questions about what value, if any, they saw in it.

Some MWNZ projects to be cut had come to the end of their term and could have been renewed, but would not while funding has been reallocated, which means projects not directly linked to wool have been affected.

Mr Petersen said reduced lamb promotion spending accounted for a third of the budget for Europe, and the United Kingdom has gone along with $350,000 from beef market development.

Previously MWNZ said it hoped meat companies would pick up any market development funding shortfall, but Meat Industry Association chief executive Tim Ritchie said that would be for individual companies to decide.

MWNZ would save $5 million from ending or not renewing research projects, wool technical and enterprise activities, scholarships, promoting agricultural careers and cutting back on research extension programmes.