Minister Urges Wool Growers To Carefully On R&D
26 October 2000
Minister Urges Wool Growers To Carefully On Research And Development
The wool industry needed to be certain it had got its sums right when making decisions on funding for off-farm research and development investment, Agriculture Minister Jim Sutton said today.
"Wool growers deserve straight answers to some vital questions if they are to make properly informed decisions about their industry's research and development at next week's watershed Wool Board AGM."
Mr Sutton said he was not convinced the McKinsey plan provided the level of investment necessary to respond to the ever-increasing competition from substitute fibres such as synthetics and cotton.
"At the end of the day, the decision on farmer-funded R&D is in the hands of wool growers. But they need to be aware of the full implications of deciding to reduce their R&D investment."
It was important that all wool growers realised reducing the industry's investment in off-farm R&D significantly - as a result of the McKinsey proposal for a levy on wool of just 1 per cent - was likely to reduce the Government's contribution to R&D in the wool sector significantly as well, Mr Sutton said.
"Government policy is that R&D should be a partnership with industry. Government investment in any mature industry is dependent on the industry's own willingness to invest."
"If industries aren't willing to maintain their investment in R&D, then why should the taxpayer?"
Funding for off-farm wool R&D comes from three main sources: private commercial funding ($6.9 million to WRONZ last financial year); government funding through the Foundation for Research, Science and Technology ($4 million to WRONZ last financial year); and levy funding via the Wool Board ($3.8 million to WRONZ last financial year).
WRONZ is the Wool Research Organisation of New Zealand, the wool industry's major provider of off-farm research.
Under the McKinsey plan, levy funding for off-farm R&D would be cut by about half to just $2 million a year. The plan relies on private manufacturers and marketers picking up the shortfall. But if that did not occur, the Government's contribution to wool industry research would be likely to fall significantly.