Lack of trust problem, grower says

Otago merino farmer John Perriam, who says strong wool growers can learn from the experience of...
Otago merino farmer John Perriam, who says strong wool growers can learn from the experience of forming the New Zealand Merino Company. Photo by Stephen Jaquiery.
One of the architects of the formation of the New Zealand Merino Company says a lack of trust is holding back reform of the strong wool industry.

Tarras farmer and Wool Partners Co-operative director John Perriam told Otago strong wool farmers last week that their fibre was every bit as special as merino, the problem was in the way it was marketed and the lack of connection between growers and users.

"I do not see a difference looking at merino wool and looking at strong wool. They all have the same marketing properties but very different end uses."

Strong wool faced the same reform challenges as merino, but uniting growers made that transition easier.

"The big problem the industry has got is a lack of trust."

Speaking to about 50 growers at a Wool Partners Co-operative (WPC) prospectus meeting in Balclutha last week, Mr Perriam recalled how fine wool growers had watched $2.4 billion in levies being invested in the International Wool Secretariat, yet prices were falling and their industry was facing demise.

"That was when we felt we had to do something."

It was a bitter battle as there were many vested interests who he said used their "destructive power" to prevent growers creating their own marketing company; but it was a battle they won.

The vineyard owner and investor compared strong wool to a "clean-skin bottle of wine", with all its attributes hidden because there had been no branding or recognised story behind the product.

Merino faced the same problem and realised growers had to capture more of the value chain by linking users and retailers, a gulf that had been occupied and protected by an enormous bureaucracy he said farmers had created themselves.

Today more than half of merino wool is sold under contract and the product is linked to independently verified ethical, animal welfare and environmental production standards, what Mr Perriam called the story behind the fibre.

Merino wool growers know where every bale of wool sold under contract goes and what it will be made into.

"That has given the industry a lot of pride."

It was not correct to say the proposed changes for strong wool had been tried before, he said, because programmes around Fernmark and Woolmark were developed off a compulsory levy system.

"Out of that tends to grow a big bureaucracy which keeps growers away from the end user and you also find a gravy train develops."

A system was needed which was commercially focused and which had the ability to cut deals where the benefits were fed directly back to growers.

He said WPC met that threshold, and its structure would have the support of merino growers.

It was a marketing company "not a trader or ticket-clipper".

"The real influence is going to come down the track in creating relationships further down the value chain."

WPC was not out to remove or shaft existing players in the wool industry, but they also needed to change from being gate keepers as at present to working alongside the co-operative.

 

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