Following extensive debate and deliberations, the NWGA decided to investigate the possibility of establishing a development fund for the wool industry.
This is being done against the background of the current decline in external development funds, economic pressure on existing industry assets and investments, as well as challenges in development partnerships. The proposed fund will enable the industry to be more self-sufficient, whilst maintaining current quality standards and development initiatives.
An industry fund can only be implemented if it carries the support of wool producers. This fund will assist with the funding of those projects that will benefit the total value chain. Should such a fund be implemented by the wool industry, it will create a sense of ownership of every Rand that will be collected. This is in contrast with a statutory levy that is subject to many rules and regulations and prescribed by law. With a statutory levy, the wool producer does not have full control over the funds that are collected.
The SA Wool and Mohair Buyers’ Association (SAWAMBA) will give consideration to administer the fund in the same manner as the wool promotion contribution.
A development fund of such a nature will be set for a period of four years to fund specific identified projects that are in the interest of the total wool industry. Thereafter, future funding and projects will be reconsidered depending on the circumstances and support. Comprehensive business plans and an audit will specify and control the utilisation and management of the funds. It is envisaged that the following projects be funded by this:
- Shearer training, to retain this skill in South Africa.
- Maintenance of monitor farms in support and research on healthy predation management practices (currently 29 monitor farms countrywide).
- Improved communication for the industry through the circulation of Wool Farmer publication to all interested parties in the value chain (including producers).
Cost to the producer
In order to execute the above projects, approximately R5.8 million per annum is required, which is a drop in the ocean if one considers that the total value of the clip that was exported in the 2016/2017 marketing season, amounted to more than R4.29 billion. (It comes down to a contribution of 0,135% by wool producers to the total value of the clip).
The SAWAMBA levy will only increase by 7c/kg – from 15c/kg to 22c/kg – to enable a fund for wool promotion (national and international) as well as the establishment of projected projects. Wool Trust funds will continue to be utilised for approved development projects, advisory services, research, statistics, and information and promotion, as approved by Cape Wools SA (CWSA).
The amount that will be collected will include a collection fee of R150 000 to allow CWSA to manage and audit the fund. – NWGA press release