Where is the Wool Industry Heading?Thursday, Apr 12, 2001
Woolgrowers are being buffeted by accusations from both sides of a ‘vested interests’ argument.
The questions that woolgrowers need to answer in spite of all the rhetoric and pages of reports are:
(1) Have woolgrowers been well served by the existing structure?
(2) If not what structure would do it better?
(3) If change is necessary, how should it be managed?
Question 1 seems to have been answered with an emphatic no from growers plus the reality for all to
see of market prices being way below cost of production in historical terms.
Question 2 has been answered by a series of strategy reports on which growers have considered and voted
for executive action.
Question 3 from all accounts has seen the executives sent out on a difficult task fraught with subversion
and distrust to create a new market model – not an easy undertaking in a supportive environment
but, as appears to be being realized, it is infact a tough battle that will take longer
with real casualties now occurring and resolve may be starting to waver.
To continue the battle analogy there appears to be a desperate need for reinforcing troops, right now,
to stiffen the resolve of the front line troops. Just because the objective has not been achieved
on the first push by the few scouts sent forward does not mean that the objective is impossible
and not worth the effort because of a few well placed enemy strong points being confronted
The retention of a nineteenth century structure for wool sales and marketing for the benefit of the
few traders is crass stupidity. But what is worse the traders are using the market model of many poorly
informed growers selling by auction to a few well-organised and informed buyers. Classic market
imperfection in action. The periods between peaks of a sellers market are growing longer and longer
because the buyers have become better and better at managing the market in their interests.
Sheep and wool production has too important a history to allow it to be destroyed by a few disruptive
buyers and exporters whose focus is only on the welfare and protection of their investment at the
expense of the producer’s survival.
Trade and trading systems have changed dramatically in the past 50 years but wool trading has been successfully
sheltered from the new systems of market management that has evolved as a result of the
deregulation of other major auction based commodities.
Woolgrowers cannot allow the abandonment of the process of change mapped out by growers because it appeared
on initial encounter to be ‘too difficult’.