By Desmond Dawson
Last April the federal government commissioned the Wool Industry Review Committee on sloppy terms of reference; the August reply has been accepted by government, the Australian Wool Industry Commission and, with reservations, by the National Party and woolgrowers This could finalise the woolgrowers' move to market slave, paying all the way.
In creating the Australian Wool Corporation the woolgrowers produced a huge agenda-setting bureaucracy over which their influence was largely theoretical. While times were good, it didn't seem to matter.
By June '89 the AWC had raised the reserve price indicator to 870-900 cents; by December '89 the supply/demand problem was very obvious, but with $1700 million of growers' reserve to spend, all it offered was optimism. But in June 1990, through the intervention of the Labor government, a reserve price of 700 cents, stock reduction and wool quotas were introduced.
In February '91, all were abandoned. Come December '91, the bureaucracy had been regrouped into four parts — "the road to recovery", said Wool News. It "was an opportunity to meet the changing demands of marketing wool and the intensive competitive world of the 1990s".
Not for long. The boards of each part were peppered with industry gurus from BHP, Nestles etc, and it wasn't long before growers got some stick. By January '93 a completely independent industry-owned International Wool Exchange for selling wool was created, absorbing the grower-owned auction system.
The WIRC report, the so-called Garnaut Report, means: the debt and interest payments guarantee of the Australian government is pushed into the never-never of 1999; the AWIC is dissolved, and a minimal role for the AWC is absorbed into the new Wool Research and Promotion, WRAP. The Australian Wool Realisation Commission, whose duty was to sell the stockpile, becomes Wool International, and this is to be privatised in 1997. By deft moves the assets of the AWC, or what's left of it, end with Wool International.
The Garnaut Report is economic rhetoric based on the conditions every transnational would like to have. It expects a climate of trade freedom, underpinned by GATT, Asia Pacific Economic Cooperation and negotiated bilateral deals. To spread the risk of ownership of wool, it would embark on wool futures and bonds: just great for woolgrowers' interests!
What concerns woolgrowers is the fixed sell-off of the stockpile, the certainty of which does not offer much certainty for the sale of current production.
Until now the Australian woolgrower has been the crux of the world wool industry, pouring huge sums into research, development and promotion. If this is progress, it hasn't sold more wool.
Regarding profitability and social justice, the Garnaut Report just scratches. One finds the usual bureaucratic answers to failing agricultural enterprises: the necessity of lowering costs, more promotion etc; and meaningless phrases like linking farm output with the marketplace, farmer with consumer, flexibility, greater certainty and business smart farmers.
But woolgrower beware: transnationals make wealth from monopolised, cheap commodities in excess supply.