Meat and Wool New Zealand announced yesterday the results of a referendum showing farmers no longer wanted to pay levies on wool.
This puts at risk $6.5 million invested to fund the training of 2000 shearers and woolhandlers a year, wool research, the dissemination of information to farmers, a genetic improvement programme and the collection of data.
The result has sent a shockwave through the fractured $800 million wool industry, which has been split by animosity and mistrust in recent years.
Agriculture Minister David Carter said the outcome created difficulties and he wondered if farmers fully realised the ramifications.
The Council of Wool Exporters said it was surprised.
Farmers also voted to no longer collect a levy for the goat industry, but to continue paying a levy on sheep meat and beef.
Meat and Wool New Zealand chairman Mike Petersen said his organisation would now go through some restructuring, including a change of name to reflect an end to its wool functions once the power to collect the levy expired next April.
The decision reflected farmer frustration at the continued erosion of wool returns.
Income from wool as a percentage of gross income fell from 40% in the late 1980s to close to 14% now, due to competition from other fibres and a decade of no promotion.
Most at risk from the wool vote was the $500,000 farmers paid towards training shearers and shedhands.
Elders Rural Holdings managing director Stuart Chapman said it might have to come from a levy on wool sales.
Both Mr Chapman and Wool Partners International chief executive Iain Abercrombie said the referendum was a mandate for their marketing companies to provide a commercial solution to the fibre's ills.
Mr Abercrombie said the wool levy was seen as a hangover from the Wool Board days and this was an opportunity for commercial companies to show leadership.
Mr Chapman said customers required quality wool which meant maintaining the training of shearers and woolhandlers.
That could be funded by industry from a charge on wool sold.
"If farmers expect premium prices, they will be expected to come up with a quality product.
"Our specifications and requirements will remain high," he said.
Mr Petersen said legally there was no way farmers could vote to continue paying a levy for activities such as shearer and woolhandling training and not for generic promotion.
"No means no," he said.
Some research funding was also at risk, as it was funded by the wool levy and attracted government funding on a dollar for dollar basis,Meat and Wool had proposed investing in wool marketing and Mr Petersen believed it could have leveraged a $5 million investment to $20 million with contributions from Elders, Wool Partners International and the Government's Primary Growth Partnership.
Mr Petersen said the vote could mean the acceleration of research that reduced or removed wool from parts of a sheep carcass, as in some cases it hindered meat processing.
"A logical extension would be the acceleration of research into the removal of wool."
Voting turnout was 39%.
