Floor Prices and Wool Promotion: Some Further Hidden Costs?

This paper focuses on some emerging and recurring issues of wool promotion policy. In particular it examines the implications for wool promotion of recent developments in raw wool marketing policy. The issues analysed are the relationship between International Wool Secretariat (IWS) promotion and wool stockpiles held by statutory authorities, market development for wool, the integration of IWS activities with those of statutory wool marketing authorities and the future organisation and control of IWS. These issues are real and significant ones even if largely unsuspected by the majority of woolgrowers. Indeed, unless they are satisfactorily resolved, serious strains could arise within the partnership that forms the IWS. The eventual outcome could be the disintegration of a co-operative promotion programme, initiated forty-two years ago. Even if this does not happen, promotion funds may well be applied to inappropriate uses and the overall effectiveness of wool promotion substantially reduced. Prima facie, the introduction of a price stabilization programme for Australian wool in 1970 would not have been expected to have a major impact on the promotion programme except, perhaps, amongst those who believed that more stable auction prices would either greatly potentiate the promotion programme or render it redundant. It was not long, however, before a number of major interactions made themselves apparent.