Growers will be invited to buy shares equivalent to $1 for each kg of greasy wool they supply to the new farmer-owned wool holding company, Wool Grower Holdings (WGH).
A prospectus for WGH, a joint shareholder with PGG Wrightson in Wool Partners International, was expected to be released next month, but it was understood the $1 shares could be paid off over five years at 20c/kg per year.
The number of shares available to each farmer would be based on the annual volume of greasy wool they produced, but a meeting of the WGH board this week was expected to confirm details, including whether there would be a maximum cap on the number of shares owned.
WHG chairman James Aitken declined to reveal details of still-to-be-finalised prospectus.
Ensuring growers were not disenfranchised by large sheep flock owners was an issue, but Mr Aitken said Meat and Wool New Zealand figures showed 80% of livestock was owned by between 25% and 30% of growers.
Farmers influencing decisions depended on the number of farmers who voted, and Mr Aitken said the way to drive change was for farmers to take ownership, and to stop having several New Zealand companies competing for business solely on price.
Carpet manufacturers had told him the wool contributed between 10% and 15% of the retail price.
They realised to maintain wool quality and volume they needed to pay more and would, but asked why should they when competitors could buy it cheaper from other wool sellers.
Getting support for WGH from farmers was a challenge and it was offering a carrot of three benefits for shareholders: shareholders would get first chance to supply premium-paying contracts, they would be eligible for dividends and they would share in trading profits should the price of wool increase.
Wool Partners International (WPI) chief executive Iain Abercrombie said the wool marketing company had been surviving on a $10 million loan from PGG Wrightson to WGH, which it had used to buy half the shares in WPI, and operating revenue from handling about 45% of the country's wool clip.
There had been a positive response from farmers to the company's marketing strategy, which aimed to link users with growers and to make a greater use of contracts.
Equally, manufacturers were approaching WPI wanting to work more closely.
Federated Farmers meat and fibre chairman Bruce Wills said he had been surprised at the positive reaction of farmers towards investing in a wool company.
"Farmers know the status quo is well and truly broken and they certainly have an open mind about proposals from WPI and WGH."
He said there would be some caution, but because wool was worth so little and the previous selling systems had performed so poorly, they could be receptive.
Relationships soured last week as WPI and Elders Primary Wool accused each other ineffective branding.
Romney New Zealand waded into the scrap saying Meat and Wool New Zealand was favouring WPI and should not invest more money in wool marketing, it having proven ineffective.
Its chairman, Hugh Taylor, said WPI had not offered attractive contracts or proven it could increase the price, whereas Elders was taking a more promising route by branding Romney and Perendale wool, and backing that with traceability and the New Zealand story.
By putting marketing money in to WPI's Wools of New Zealand brand, Mr Taylor said, Meat and Wool was propping up WPI.
This prompted a warning from Meat and Wool chairman Mike Petersen that the body would invest in joint marketing if the warring factions stopped fighting.
If they did not, he said, the bulk of the $5 million promised for two years of marketing would also not be made available to the industry.
Mr Petersen said restructuring the wool industry had four principles: unifying growers, consolidating the clip for marketing, targeted marketing and promotion and greater collaboration of the New Zealand industry.
Many of those principles were not currently being met, he said.