Growers Must Not Pay Levies to Companies

12 August 2001

PR124/01

Federated Farmers: Growers Must Not Pay Levies to Commercial Companies

"Woolgrowers have said "no" to paying compulsory levies to commercial companies," said Murray Taggart, Chairman of Federated Farmers' NZ Meat & Fibre Producers, in response to the Wool Board's latest proposal for a strong wools marketing company.

The Wool Board is recommending that growers pay a $5 million per annum levy to WRONZ to undertake R&D for the new strong wool marketing company Wool Interiors Limited. Wool Interiors will be jointly owned by growers and WRONZ, with growers contributing the Wools of New Zealand marketing arm and WRONZ contributing intellectual property, and R&D expertise.

"Growers should not be compulsorily levied to fund WRONZ's R&D for its joint venture company, Wool Interiors. There is absolutely no reason for a commercial company to be funded by compulsory levies," said Mr Taggart.

"Cavalier Corporation doesn't receive a levy to fund its R&D - why should Wool Interiors?" questioned Mr Taggart.

"The Wool Board itself has said that Wool Interiors is to be a commercial company - surely commercial principles should apply. If WRONZ needs extra funding to supply R&D to Wool Interiors it should go about it in a commercial manner. For example, Wool Interiors could fund R&D from its revenue, just like a commercial company would. Requirements over and above that could be funded by a share issue," said Mr Taggart.

"Growers would also like to know why they can't individually hold their shares in Wool Interiors directly?" asked Mr Taggart.

"It's high time the Wool Board started listening to real farmers who want a commercially driven wool industry, and who want to be able to make decisions for themselves," concluded Mr Taggart.

ENDS

For further information: Murray Taggart (025) 249-9494 or (03) 312-5769 Maxine Yule (04) 473-7269

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