Reality of 'no' vote sets in

There is no turning back the clock. Meat & Wool New Zealand is restructuring and wool is out of the frame - at least for now, its Central South Island director David Douglas says.

Mr Douglas was one of a group of 35 wool-industry representatives who met in Wellington earlier this month at a summit arranged by Agriculture Minister David Carter to discuss the future of the industry.

The meeting comes after farmers decided in a recent referendum they would no longer pay a levy to fund the wool-related activities of the producer organisation.

As an outcome of the meeting, a small taskforce of industry leaders will work to develop a marketing strategy for cross-bred wool and to find ways to increase the prices paid to farmers for the fibre.

The taskforce is to report back to the group early next year.

After the meeting, Mr Carter told the Otago Daily Times he had not ruled out the possibility of asking farmers to vote again on paying a levy, but this decision would not be made until the taskforce had begun its work.

While there was hope answers could be found, Meat & Wool NZ had begun the process of winding up its wool-related activities, Mr Douglas said.

"We are not holding off.

"The decision has been made - if that changes at a later date, then, so be it," Mr Douglas said.

"We have to assume there will not be another levy."

In the recent Meat & Wool NZ referendum, all of the levy streams were approved in a vote on a weighted basis, but the wool and goatmeat levies were defeated on a one-farmer, one-vote test.

Mr Douglas said wool-related activity, which could be stopped immediately, had ceased.

However, in some cases the organisation was bound by contracts and required time to manage an orderly exit from these.

And so a wool levy of 3c a kilogram would continue to apply until April 18, 2010, when the existing levy order ran out.

Mr Douglas said some people were only now realising the true consequences of the "no" vote.

If the vote had been to continue collecting levies then the money collected and spent by Meat & Wool NZ in the first year would have been $6.4 million and this would have leveraged a further $5 million from the government, Mr Douglas said.

There had been suggestions others could fill this gap, but this was "mischievous", he said.

"Who will come up with that kind of money?" Someone had to front up with the cash before April, he said.

The dilemma for commercial companies, who might consider it, was they had to provide a return to their shareholders first.

"There have been proposals, and there will be more, from commercial companies and organisations to tax farmers.

"The question that must always be asked is - where does the oversight and the accountability lie? "[And] The Minister of Agriculture cannot go to Cabinet and ask for support [for wool] when farmers themselves won't fund it."

Mr Douglas said Meat & Wool NZ held 70 meetings throughout New Zealand before the referendum.

However, it was apathy that influenced the final outcome, he said.

"Sixty-eight per cent of the weighted votes in the area I represent, which starts at Glenorchy and finishes at the Rangitata River, voted to continue a wool levy."

These were votes from farmers who relied on sheep and beef farming as their primary source of income, he said.

Under the Commodity Levies Act 1990, each levy proposal must pass on both a weighted or stock-unit test, and a one-farmer, one-vote test.

But farmers paid levies on numbers of stock slaughtered or kilograms of wool sold.

Mr Douglas said Meat & Wool NZ had not spent a lot of money on public relations and that had cost it dearly.

As an example, to be more efficient Meat & Wool NZ contracted out some of its activities to organisations like AgITO and Tectra, and farmers failed to see the connection between those services and their levy payments, he said.

"In doing so our brand was not recognised and farmers didn't know what we were doing."

As well, Meat & Wool NZ had not managed to shake off a troubled past and had become "tainted" by the failures of others, despite making a "clean break" when the old Wool Board was disbanded, Mr Douglas said.

"Our name does not help the false perception some people have."