Study Group Proposes N.Z. Purchase Of Wool

Press, Volume CVII, Issue 31530, 18 November 1967, Page 1

Study Group Proposes N.Z. Purchase Of Wool

The purchase of all wool produced in New Zealand by a wool marketing authority is the principal recommendation of the Wool Marketing Study Group of the Wool Board and Wool Commission made in its final report.

The group was established nearly three years ago to examine the causes of price fluctuations under the present marketing system and report on any method of containing these, and to report on methods of wool marketing. The aim of the proposed system of appraisal and acquisition of the clip is to stabilise prices to the grower only, to facilitate his forward planning. The group has concluded that it is not feasible for sheepfarmers alone to attempt to induce stability in wool prices beyond that level. According to the group’s recommendations the auction system would be retained as the main channel of disposal of the clip, with the authority having power to operate a reserve price. It is intended that there should be a place for private dealers in the scheme. The difference between the cost of purchasing wool and the proceeds of its sale in

the case of the latter being the smaller—would be met from a stabilising fund which, it is intended, would be selfbalancing in the long run. To aid in the formulation of payout prices and the operation of a flexible reserve price, the establishment of a market intelligence system is proposed. Reducing Costs

The report contains proposals for improving the presentation of wool for sale based on objective measurement. The expectation is that in addition to making wool more attractive to buyers this would also reduce marketing costs. Steps are already being taken in this direction.

The training and registration of wool classers is also suggested. The report suggests the establishment of a committee between the Wool Board, Wool Commission and the Government to study the proposals, discuss them with other interested organisations

and, if necessary, to draft the necessary legislation. In the course of the group’s investigations a survey was made of 263 overseas manufacturers. (Detail!, Page 8)