Baston questions wool auctions

Rueben HaleThe West Australian

WA Agriculture Minister Ken Baston has questioned the need for the wool auction system with only one main customer.

Speaking to _Countryman _, Mr Baston said he believed industry should find an alternative to the "open cry" system because China was predominantly our only customer for wool.

The minister's comments come amid a national review on wool selling systems, commissioned by Australian Wool Innovation on behalf of Australian woolgrowers.

The key objective of the Wool Selling Systems Review is to improve the returns that woolgrowers receive.

AWI says it aims to improve the sustainability of wool growing in Australia by increasing transparency, reducing costs within the exchange of ownership process and increasing competitive tension at the point of sale.

The scope of the review is to study the exchange of ownership process between the seller and the first buyer, usually an exporter or processor, and the associated costs and processes that sit in the current industry selling system.

The focus is to determine whether the current exchange of ownership between sellers and buyers provides the optimal competition and subsequent financial returns to the primary wool producers.

WAFarmers and the Pastoralists and Graziers Association are among 68 groups around the country that have already made a submission to the review.

WAFarmers said Mr Baston's notion that we only have one customer was ludicrous.

"It's a bit like saying Coles and Woolworths only have one customer - the housewife," the group said.

"The reality is that within the majority Chinese customer base there a many different people competing against each other, which is good for our competition."

PGA Western Sheep and Beef Producers chairman Digby Stretch said he would urge caution on anyone suggesting doing away with the auction system.

"What is in the forefront of our minds is that the market should drive changes that need to happen," he said.

"The market comprises of buyers and sellers and is very fine-tuned system.

"It's worth a reminder that the last time we tried to manipulate the wool industry in this country, it ended in disaster."

Mr Stretch said the industry needed a more dynamic wool marketing to underpin the current system.

"If we improved the marketing it would be better for producers to enable them to make better decisions based on more informed forward projections for the commodity," he said.

The final date for submissions is yet to be finalised, with a final report expected to be delivered to AWI in the second half of this year.

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