The Foundation for Research Science and Technology (FRST) recently opted not to support a funding application from a wool consortium for up to $1.5 million for such research, taking to nearly $13 million a year the total amount of money lost to the wool sector each year following the farmers' decision.
This included $6.5 million of matching government funding.
The failed FRST funding application was yet further fallout from the no-levy vote, following the ending of farmer contributions to shearer and woolhandler training and Meat and Wool New Zealand slashing $6.3 million from its budget.
Wool Research Organisation of New Zealand (WRONZ) chairman David Douglas said it appeared FRST's rejection and farmers voting not to continue paying a levy were linked.
He said the $6.4 million in levies attracted $5 million in matching Government funding and $1.5 million from FRST for activities such as shearer training and research.
"If the wool levy and FRST funding had been successful, the industry would then have had $6.5 million of Government funding on top of grower levy funds of $6.4 million.
This is a total loss of $12.9 million not now available to the wool industry each year."
Mr Douglas said AgResearch was contracted to do research for WRONZ, and he described the funding refusal as a significant blow to researchers and to a wool industry dependent on science to once again become economically viable.
AgResearch food and textiles manager Warren McNabb said the science company was sitting tight until it determined thefull impact of the loss of funding, which might not become clear until next year.
Most at risk was research into carpets and upholstery.
That included how to make carpets more environmentally friendly by developing biodegradable backing, dyes and insect treatment.
Prof McNabb said the loss of funding was not good news for wool biology and textile capability.
"If does put them [the sectors] in a difficult situation, It puts AgResearch in a difficult situation in terms of going forward," he said.
Prof McNabb believed most farmers saw merit in retaining wool research capability and may have voted down the levy for other reasons.
"I still think there is genuine interest in having research and development capability to service the industry," he said.
Mr Douglas said while there had been criticism that some work by WRONZ did not have a commercial outcome, that had been addressed by gaining input from commercial entities.
"We were changing our direction towards research and development projects being taken to market," he said.
WRONZ was an incorporated society, with 80% of its capital funded by grower levies and the balance from industry and Government grants.
It had $31 million invested, all the proceeds of which had been earmarked for research and development, Mr Douglas said.
Farmers faced some tough decisions about the future of wool, which he believed required a commercial solution.
Mr Douglas said he had not given up on wool, and believed farmers needed to show some unity by selling the bulk of their crossbred wool under one entity to get sufficient economies of scale to drive research and development and marketing.
"So long as farmers are divided, the Government is not going to support us."