Farmers refuse to pay wool levy

New Zealand's sheep farmers have dumped one of the last reminders of the former Wool Board and baulked at continuing to pay a levy for "industry good" work supporting the national wool clip.

Their decision will trigger a restructure of the Meat & Wool New Zealand industry board which evolved from the old farmer-controlled Meat Board and Wool Board. Existing funding will run out on April 18 next year.

"When the board meets this week, we will be looking across all current and planned activity areas to consider the implications," said Meat and Wool New Zealand chairman, Mike Petersen.

Meat and Wool NZ must hold a referendum every five years under the Commodity Levies Act. The recent referendum asked farmers to agree to the organisation's plans for the next five years.

The plans included research and development, skills and education, market development, information and analysis and market access. The referendum followed three months of consultation, including 70 meetings around the country.

In the case of wool, farmers were asked to approve a reducing levy, first dropping to 4c/kg and then 3c/kg in 2012.

It would have been spent on core activities directly benefiting farmers: on-farm research, monitor farms and extension, shearer and wool handling training, Sheep Improvement Ltd (SIL), and the collection of wool sector data by the Meat and Wool New Zealand Economic Service.

"In spite of this reduction the wool levy failed to get support and we will respond accordingly," Mr Petersen said.

Some farmers had questioned the stance from Meat & Wool New Zealand that `No' means no, and suggested that there could be new proposals presented to farmers.

"We made it very clear right through the referendum process that under the Commodity Levies Act (CLA) the vote was for the levy in its entirety, and a `No' vote would mean the levy proposal would stop all investment in that area.

"Many suggested this stance was a ploy to try and convince people to vote yes, but this is simply the reality of life under the CLA," Mr Petersen said.

"We absolutely respect the democratic process and the right for farmers to decide on investing in their industry for the next five years." Rejection of a $6.4 million levy on wool, and a smaller one on goatmeat was driven by smaller farmers.

The two levies and the big ones for sheepmeat and beef were all approved on a weighted vote, in which farmers were able to vote in proportion to the numbers of livestock they farm.

Sheep and beef farmers voted on both a weighted basis and a one-farmer, one-vote basis to continue their investment in sheepmeat and beef, but the wool and goatmeat levies were lost on the one-farmer, one-vote count.

The lack of support for the wool levy not cuts only $6.4 million from Meat and Wool New Zealand income in the 2010/11 year, but another $5m that it could have leveraged from other funding sources for these activities. The goatmeat slaughter levy would have provided $58,000.

Mr Petersen said the referendum result sent a clear message to Meat and Wool New Zealand.

"There is a significant amount of dissatisfaction with past investments and we need to do better".

Mr Petersen said there had been "solid support" for the continuation of sheepmeat and beef levies.


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