New Zealand's Farmers Reject Wool Levy

by Mary Swire, Tax-News.com

04 September 2009

The New Zealand government has argued that the decision by the country’s farmers not to support the continuation of a wool levy will create difficulties for the industry.

"I respect the democratic process and the right for farmers to decide,” Minister of Agriculture, David Carter stated “but I am concerned that the ramifications of this decision have not been fully realised. The result of the referendum on the Meat & Wool New Zealand levy gives a clear go-ahead for the meat sector, but effectively leaves the wool industry without a mandated industry-good body at a time when this is desperately needed.”

"For example, it will now be difficult for the wool industry to access funding from the Government's Primary Growth Partnership initiative," Mr Carter continued.

"As Minister of Agriculture, I am concerned that the wool industry now finds itself in such a vulnerable position.”

David Carter added that, while he is willing to assist, the onus is also on industry leaders to work together to find a solution.

The wool levy has been allocated to pay for "industry-good" developments. The farmers' rejection of the levy, plus the government funding that their industry board, Meat and Wool New Zealand, could have accessed - a total of more than NZD11m (USD7.5m) - is expected to have consequences for several on-going projects, including stock and technological improvement, the taking of genetic and production statistics, on-farm research and training programmes for employees in the industry.

The Commodity Levies (Wool) Order 2004 expires on 18 April 2010. Current arrangements will continue until then, the government has announced.

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