High times after wool’s volatile past

High times after wool’s volatile past


Wool
Australian Wool Innovation chairman Wal Merriman. Photo: Andrew Meares

Australian Wool Innovation chairman Wal Merriman. Photo: Andrew Meares

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In 1989, the Australian wool market collapsed and burdened Australia woolgrowers with the ownership of a 4.7 million bale stockpile and a debt of $2.8 billion.

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In 1989, the Australian wool market collapsed and burdened Australian woolgrowers with the ownership of a 4.7 million bale stockpile and a debt of $2.8 billion.

A decade after the reserve price scheme was abolished, Australian Wool Innovation was established in 2001 as the industry research and development body. 

AWI is funded by a compulsory levy paid by 49,964 woolgrowers, which is currently two per cent of greasy wool sold, and receives matching R and D funds from the federal government.

Last financial year AWI collected more than $60 million in grower levy funds and $14.7m in federal government funding.

AWI is owned by the 23,463 registered shareholders who are located in NSW, 38pc, Victoria 24pc, South Australia 17pc, WA 16pc, Tasmania and Queensland with both 3pc.

Record wool prices influenced a year-on-year net asset growth from $89m to $106m in financial reserves. Expenditure of the company is 60pc marketing and 40pc R and D.

This means for a bale which costs $1820 - which was the national average value of a bale sold last week - growers pay $36 to AWI, of which $14 is spent on R and D, and $22 on marketing projects. Growers nominate how much of their wool cheque is paid to AWI during the triennial WoolPoll vote.

AWI has 82 staff based at its Sydney head office and 80 more scattered across the globe. While most RDCs sit under the Primary Industries Act, AWI is under the Wool Services Privatisation Act, which does not require a legislated oversight body.

The story High times after wool’s volatile past first appeared on Farm Online.

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