Yes for meat no for wool – updated

Farmers voted yes and no in Meat & Wool’s referendum on levies.

They voted for the continuation of levies on sheepmeat and beef but against the continuation of a wool or goatmeat levy.

M&W chairman Mike Peterson said the referendum sent a clear message there was significant dissatisfaction with past investments and the organisation needs to do better.

Under the Commodity Levies Act 1990 (CLA), each levy proposal must pass on both a one farmer one vote test, and also on a weighted or stock unit test. All of the levy streams passed on a weighted basis, but the wool and goatmeat levies were defeated on a one farmer one vote test.

That means the peo0ple with the most stock, who pay the biggest levies were outvoted by those with fewer stock who pay less.

The wool levy would have contributed $6.4 million to Meat and Wool’s budget and the goatmeat slaughter levy would have provided $58,000. The loss of both means the organisation will have to restructure.

The loss of the wool levy will have the biggest impact. Meat and Wool will have to curtail, and possibly stop, some of its core activities. Among these are on farm research, monitor farms and extension, shearer and wool handling training, Sheep Improvement Ltd (SIL), and the collection and provision of information relating to the wool industry by the Meat & Wool New Zealand Economic Service. 

 The current levy orders for sheepmeat, beef, goatmeat and wool are in place until April 2010.

Perhaps the winner was apathy – only 39.0% (7,820 participants) bothered to vote.

The results were:

                                                              One Person: One Vote                     Stock Numbers

Sheepmeat Levy                      YES                   3,280   53.72%                   50,071   62.46%

                                                         NO                    2,826   46.28%                   30,090   37.54%

 Beef Levy                                 YES                   3,566   51.52%                   31,919   59.32%

                                                         NO                    3,356   48.48%                   21,888   40.68%

 Goatmeat Levy                        YES                      118   46.83%                       228   52.29%

                                                         NO                       134   53.17%                       208   47.71%

Wool Levy                                    YES                   2,794   45.76%                   44,193   55.13%

                                                         NO                    3,312   54.24%                   35,968   44.87%

UPDATE:

Agriculture Minsiter David Carter says the result is a blow for the industry.

Agriculture Minister David Carter says the decision by farmers not to support the continuation of a wool levy is disappointing and will create difficulties for the industry.

“I respect the democratic process and the right for farmers to decide, but I am concerned that the ramifications of this decision have not been fully realised.

“The result of the referendum on the Meat & Wool NZ levy gives a clear go-ahead for the meat sector, but effectively leaves the wool industry without a mandated industry-good body at a time when this is desperately needed.

A factor those who voted no may not have understood is that it will now be very difficult for the industry to access funds from the Government’s Primary Growth Partnership initiative.

2 Responses to Yes for meat no for wool – updated

  1. gravedodger says:

    As one who was quite involved in the great wool debate over 40 years ago and experienced the pain of being called a socialist for my views when I could not understand how fragmented industries using brokers to onsell our product in the face of competition from organisations such as Dupont I am moved to make some observations.
    I look back with a perverted sense of told you so when we see the tribulations being endured by meat and wool farmers today. We see how dairy has mainly only to deal with world commodity prices and the problems that manifest from that without having the vultures sitting on the fence waiting for an entrepreneur to open a new opportunity in a market then swooping in to undercut it and take the profit before it goes pearshaped as happens in both the meat and wool industry. History is littered with well intentioned farmers thinking they can emerge from the farm gate and compete on a world market whether that be through an individual effort or via the statuary board using compulsory levies to fund the dream. I will watch with interest the result of the Banks Peninsula crossbred wool producers efforts to secure their market with high value carpet makers.
    I accept dairy is simpler regarding product and enjoys a stronger presence in the world market when ranged against the wide range of fibre type, quality and end use of wool. Likewise meat ranges from fillet to brisket, Jersey to Charolais, in beef and the same with sheep, Texel, downs, crossbreeds, Merino and then add in cuts. Don’t get me wrong I know milk and its products have great variables but with the Fonterra model it mostly goes into one tank and that has developed to a largely good result for the dairy industry over time. The lamb industry is enjoying a mini boom but that is as a result of supply tightening not any result of a marketing ploy and the status quo will resume as soon as the crisis passes.
    I can see why the different industry sectors have voted as they have and the poor turnout is equally easy to comprehend. Too many of those participating interests have too much to gain from the fragmentation as they have succeeded with it all along. Alas the aforementioned vultures called brokers and or marketers who only deal with the current opportunity and don’t have a care for tomorrow leave the producers whose interest is more longterm to continue the slide to disaster.

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