Wool's future

New Zealand's economy may have been built from wool off the sheep's back, but the present perilous state of the industry means its contribution could be consigned to history.

It is a widely held view that the strong wool sector, which supplies fibre for carpets and upholstery, has one last chance to remain a credible export industry, let alone regain its former status Strong or crossbred wool made up 89% of the clip last year and earned $570 million in export receipts.

A recently released report by the Government-commissioned Wool Industry Task Force - the fifth such review of industry viability in 40 years - said the sector still had a future and the growth of discerning consumers meant its time had come, but to take advantage of these opportunities the industry required unity, a commercial model linking retailers and consumers, and greater promotion of wool's natural, sustainable and ethical production attributes.

Such a strategy is not new. New Zealand fine wool producers, honey exporters, the kiwifruit and wine industries and some meat companies utilise similar attributes to market their products.

However, there is no sign it will be widely adopted by the crossbred wool industry, which has a poor history when it comes to sector-wide co-operation.

The Council of Wool Exporters and Meat and Wool New Zealand have always had a tense relationship. Exporters have blamed the levy-funded body for the state of the industry, saying it has had too much control.

Wool Partners International, an exporting and marketing company jointly owned by farmers and PGG Wrightson, and its competitor, Elders Primary Wool, have also at times been bitter rivals.

The challenge facing the new centralised body recommended by the task force to represent the sector is so immense that many in the industry question whether it can succeed.

It has to unite what has become a largely dysfunctional sector and encourage commercial solutions and win back farmers who, because of low returns, largely view wool as a by-product of meat.

Farmers have lost faith because revenue has fallen by two-thirds in 20 years, potentially compromising the quality of what has been recognised as the best wool in the world: they baulked at the large sums the former Wool Board spent annually on promotion for questionable return; voted to disband the board in 2004; then last year elected to stop paying wool levies which funded research and development, shearer and wool-handling training, and product promotion.

The results of this dysfunction include a generation of consumers ignorant of wool's natural and sustainable qualities, and the absence of new people joining the industry bringing with them fresh and innovative thinking.

Agriculture Minister David Carter has told the sector to put its prejudices and animosities aside and has vowed he will not let this report be "dropped like a stone" as others have.

His words will have to be followed with action to have any credibility.