Agmates Editor Steve Truman writes:
Sheep numbers in Australia have plummeted to their lowest level in more than 80 years. The once mighty wool industry is in virtual collapse - despite producers pouring hundreds of millions of their dollars into research and marketing.
Australian Bureau of Statistics has reported that sheep and lamb numbers were at 85.7 million head in the 2006-07 financial year, the lowest since 1924. Sheep population peaked in 1990 with 180 million sheep within the Island nation. Thats a decrease of 94 million in 18 years.
The only time in our nations history that sheep numbers have been lower were in the first decade of the 1900’s during the federation drought and then before that back in the 1870’s.
This decline is despite wool growers paying up to 4% levy monies for Wool industry promotion and research.
Goulburn Wool & fat lamb producer and Australian Woolgrowers Association Director Chick Olsen had this to say.
“In my opinion, the industry R&D approach to levy expenditure over the past 5 years has provided very little return for the $300 million spent in ” on farm” areas.
Indeed, on farm costs in areas such as farm labour costs, shearing, workers comp, insurance, fertiliser and other farm inputs have all risen considerably, despite the millions poured into research trying to find ways to reduce our input costs.
Many wonder how we have benefited from this huge expenditure of growers money. With over 10,000 growers leaving the industry, and a virtual collapse of wool prices over the past 4 - 5 years, it is no wonder there has been a confidence crisis in our industry” …. Read full article here.
Agmates questions are:
1. Who is accountable for this appalling waste of sheep farmers money?
2. How does any organization spend hundreds of millions of dollars of farmers money, only to achieve such devastating outcomes.
3. This is an outrageous! How do they get away with it?
__________________________________________________________________
A1 Organic Sheep, Wool and Fat Lamb Farm For sale 28,900 acres
__________________________________________________________________
Have your say! Join others in the Agmates community for an online discussion of the sheep and wool industry by leaving your comment.
Dear Steve,
What is outrageous is the timing of this article! Chick is now a Board member of AWI and wrote this article in May last year as part of his campaign for election to the AWI Board. They are politically charged comments that I, for one would dispute especially in the areas of workers compensation and labour costs.
To rehash this article now with the appearance that it is current opinion is outrageous and seriously questions the corporate responsibilities of Board members.
G’day Duncan,
Mate you are correct, the comment from Chick was made 12 months ago and perhaps I should have noted that in the article - I certainly did not want to give the impression that it was a recent statement. Indeed I just assumed that readers would click through to the AWGA web article which is clearly dated the 9th of May 2007 at the top of the article.
Never the less, the point of the article was and the comment illustrated that wool growers have paid hundreds of millions of dollars in producer levies for an industry that has suffered massive decline.
Sheep numbers at an 84 year low - in fact the only time they were lower was during the Federation drought 1901-1906 and before that 1870’s (another drought). 10,000 farmers have abandoned the wool growing industry since the collapse of the Wool Floor price scheme.
I’m not at all clear on what you mean by “to rehash this article now with the appearance that it is current opinion is outrageous and seriously questions the corporate responsibilities of board members”.
It was Chicks observations just 12 months ago that $300 million of growers levy money had been spent on on-farm R&D with no result - Why would that be any different now. Is it not a fact of history.
Still with you being a passionate wool grower I’d be interested to know what efficiencies you believe that $300 million has bought about in Workers Comp & Labour Costs for you as a wool grower?
Great to hear from you and hope your season is being kind to you & the sheep. Cheers - Steve
Hi Steve,
Unfortunately we’re having a terrible run of seasons due to the seven years and counting, drought. And it’s this drought that has been the main contributor to sheep number reductions. In my area alone (Hay, NSW) sheep numbers have halved since the start of this decade…
So I’m not sure why AWI seems to being blamed for all the industry woes over the past 20 years or so, given that it has only been in existence since 2001. Chick conveniently forgot to mention the first two years of AWI’s existence, the so called AWI Mark 1 that AWGA threw its support behind, that spent tens of millions of $’s on some questionable “on farm” projects (details contained in an independent auditors report that I have a copy of).
I disputed the area of workers compensation for the simple reason that schemes are a State responsibility. Premiums are set by State authorities which reflect the relative health of their Schemes. For instance, in NSW in the late 1990’s and early part of this decade shearing premiums especially, were over 15% because Workcover had a debt of well over $2 billion! But in Queensland where the Scheme was better run, the premiums were closer to 5%. The only influence AWI could have on premiums was to look at R&D on improving work practice OHS hence the funding towards the development of Upright Portable Shearing Platforms. At least one is now on the market. AWI has also been spending considerable amounts on national facilitation and funding of shearer and shedhand training in all states that previously had been in disarray. Definately money well spent with thousands of new shearers and shedhands undergoing training.
Steve, I could go on but I’m trying to be positive about a wonderful product that many of us love to produce. Chick is now a Board member of AWI and any current criticisms of R&D expenditure that he may now have would be kept well and truly within the Board as proper corporate governance decrees.
G’day Duncan,
Let me 1stly say, I have the greatest respect for yourself and all dedicated wool growers. I grew up and have spent most my adult life in the industry (as a Stock Agent) and know that most wool growers are passionate about the fibre and the industry.
I just have come to the conclusion that it is a ‘mongrel’ of an industry. In my almost 2 decades as a stock agent I have seen drought, low prices, escalating fixed cost and debt reduce good honest hard working and committed men that I admired to tears.
My last ‘wool branch’ posting was at Broken Hill. I left there in 2001 and came back to QLD vowing to never go near a sheep again.
It was just soul destroying during the late 90’s to sit in an office week after week with wool grower clients who were in tears because the bank was foreclosing on them.
These were good people, husbands and wives, who had given their entire life to hard work, scrimping and saving, incredibly good sheep men and women, salt of the earth people.
I’d go through their budgets with them, doing costs of production, it did not matter if they were shearing 10,000 or 20,000 sheep, it was a simple sum - the more sheep they’d shear the more money they lose.
I’ve had hundreds of ‘client’ farmers over the years in cattle areas who did not work as hard (as you of all people would know, sheep are bloody hard work), had enjoyed a better lifestyle and over 2 decades had been able to set their next generation up on another property. Yet here were these great people who’d worked harder, sacrificed more and yet were losing everything. It was heart breaking and just not fair. They deserved better.
I’d had similar experiences in the early 1980’s as a 20 something stock agent at Quilpie and Cunnamulla in QLD with 50 & 60 year Woolgrowers coming to us their agent to virtually pleaded for an extension of an overdraft so they could fix their station work four wheel drive.
So I’m being very open with you here, I have a huge problem with the hundreds of millions, possibly billions of dollars that wool growers have paid in levies to the old Woolmark company and all of its successor.
I cannot see that enormous amount of money paid by these great people has benefited growers at all. I was hopeful as most people in the industry were that with the cleaning out of the Wool stock pile we’d see those that were left standing prosper in a ‘rationalized’ market. That hasn’t happen.
I only wished the bureaucrat’s that have overseen the frittering away of this fortune were half the people dedicated wool growers are. If they were they industry would be the gem in Australia’s rural industries crown.
Cheers mate - Steve