Auctioning Of Wool

Press, Volume CIV, Issue 30711, 29 March 1965, Page 10

Auctioning Of Wool

Recent criticism at meetings of Federated Farmers of the auction system of selling wool has been prompted by the sharp drop in wool prices this season. Wool sold at the January auction, according to the useful new price index of the Government Statistician, fetched only 72 per cent of the January, 1964, prices, or 74 per cent of the average for 1963-64. Not surprisingly, a fall of this magnitude has led to a variety of suggestions on how to improve the marketing of wool. None of these suggestions for new marketing systems could, if given effect, reduce the excessive stocks of wool held in some consuming countries since the end of last season, or reduce the Bank Rate in Britain; and these are two major factors in the wool market this season.

Farmers should be careful, in urging radical reforms, lest they throw away the considerable benefits they have gained in the last few decades. The floor price scheme operated by the New’ Zealand Wool Commission has been so successful that its main features have been copied in the scheme now proposed for Australia. Facilities for storing, classing, displaying, and auctioning wool in New Zealand have been greatly improved in recent years. The move towards smaller, but more frequent, sales in each New' Zealand auction centre has brought benefits to growers as well as to buyers. Improvements in each of these fields can, and no doubt will, be made; but no-one can say that the trade has not moved with the times. Destructive criticism and hare-brained schemes are more likely to restrict than encourage progress. (

Responsible woolgrowers realise that the adoption in Australia of a floor price scheme similar to those already in existence in New Zealand and South Africa could lead to better marketing, within the framework of the auction system. Mutuallysupporting commissions in the three countries could well create the bulk reserve supply suggested by one speaker at the last meeting of the meat and wool section of North Canterbury Federated Farmers. Farmers who are critical of low wool prices should reflect that it is not low prices but excessively high prices which harm their interests in the long run. Responsible criticism of present institutions will be directed at high prices rather than low prices; intelligent planning will aim at reducing extremes—the highs as w'ell as the lows—and wise changes will modify existing institutions rather than scrap them.