Tuesday, 26 September 2000 Media Statement

Ministers sound warning on wool research funding

Sheep farmers will put the future of their industry at risk if they accept a proposal to cut levy funding for wool processing research, say the ministers of agriculture and science.

The McKinsey report includes a proposal to reduce levy funding for wool processing research and development from $3.5 million to $2 million a year.

"This proposal assumes that wool processing companies will take more responsibility for this research, rather than sheep farmers," said Minister of Agriculture Jim Sutton and Minister of Research, Science and Technology Pete Hodgson.

"There is no certainty that this will happen. Processors may decide to move to competing fibres whose producers demonstrate a greater commitment to ongoing improvement."

"The Government will not use taxpayer funds to compensate for reduced R&D investment by the wool industry. Such a well-established industry cannot reasonably expect the Government even to maintain its investment if it reduces its own commitment to R&D."

"Sheep farmers will be seriously short-sighted if they do not ensure off-farm R&D is sustained to ensure the market value of their product. Even a temporary reduction in industry funding for wool processing R&D could significantly disrupt long-term R&D programmes.

"The industry cannot afford to take this risk. Consumer confidence in the products of their industry could decline very quickly if processing technologies do not continue to keep pace with changing consumer demands and expectations.

"There is plenty of demand for the public funds available for R&D. The Government wants to work with those that have a belief in their own industry. If the wool industry cannot demonstrate that it believes in its own future, it can hardly expect others to support it."

ENDS

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