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CEO Report - A Yearly Wrap From Jo

Welcome to the final edition of the WoolProducers monthly newsletter. Thank you for taking the time to read our publication and we hope that you find it interesting. If there is anything that you would like further information on, please don’t hesitate to reach out.

On behalf of the WoolProducers team, I would like to wish you all a happy, relaxing and safe festive season. This year has been challenging in many respects and we hope that 2023 is better for those who have had it tough this year.

The WoolProducers office will be closed from 23 December, through to 9 January, 2023.

As 2022 draws to a close, it’s always interesting to take this opportunity to reflect on the year that was and some of the issues that WoolProducers has addressed and advocated on behalf of woolgrowers, demonstrating our commitment to our organisation’s vision to:

“Provide the Australian wool growing industry with leadership that encourages a financially, socially, ethically and environmentally sustainable future.”

WoolProducers continues to be the only legitimate national wool industry policy body representing growers in national and international forums, along with the only national wool representative body that consistently delivers industry good outcomes.

There are many issues that we have dealt with this year, but the following is an insight into a small number of significant areas that we have covered.

This year has seen a number of challenges and opportunities for our industry, and we have worked hard to ensure the best outcomes for our growers.

As we transition out of Covid and adjust to the new normal of a post pandemic world, including market shocks, we have spent considerable amounts of time focusing on the maintenance and enhancement of market access for wool.

Throughout the year we have been working on the ‘Ensuring a Sustainable Future for Australia’s Wool Supply Chain through Domestic and Diversified Processing’, after securing a grant under the Australian Trade and Market Access Cooperative (ATMAC) Program late last year.

After a competitive tender process, we engaged the service of Deloitte Access Economics (DAE) to assess the feasibility of both domestic processing and exploring early-stage processing in new or currently under-utilised markets.

Through a process of widespread domestic and international consultation and stringent economic assessment, DAE has delivered a comprehensive report, highlighting a number of exciting opportunities for our industry.

The report outlines the potential economic and trade risk mitigation benefits of domestic early-stage wool processing while considering existing barriers in re-establishing this sector, including energy and labour costs, water availability and innovation opportunities to address these barriers.

Another element of the study assesses tariff and regulatory barriers, that may prevent domestic and diversified early-stage processing from integrating with downstream textile supply chain operations, while also exploring opportunities to split early stage ‘wet’ and ‘dry’ processing between domestic and offshore locations.

In terms of market expansion and diversification, numerous countries were found to present market opportunities, particularly India, Vietnam, Bangladesh and Indonesia.

The report sets out the next steps that we as an industry can take to improve the long-term sustainability of our industry and we are already exploring opportunities to enable these recommendations to come to fruition.

Another exciting development in terms of wool trade this year, was the signing of the Interim India-Australia Comprehensive Economic Cooperative Agreement (IA-CECA).

Under the interim agreement there will be an elimination of Indian tariffs on Australian wool from entry into force of the agreement.

WoolProducers provided a confidential submission to the Department of Foreign Affairs and Trade in December last year requesting an Australian-Indian Free Trade Agreement that was beneficial to the Australian wool industry, seeking duty-free, quota-free access for wool into this important market.

WoolProducers’ submission outlined potential benefits to the Australian wool industry under an IA-CECA, including market expansion due to the complementarity between our industry and India’s existing textile industry.

India is a significant market for Australian wool, with India in recent times being the third largest single-country importer, however, was hit hard by the Covid-19 pandemic resulting in an initial 30% drop in the value of India’s domestic textile and apparel market. India has since become more active in the Australian wool market, with an 82% year-on-year increase in volume being purchased between July, 2021 to January this year.

A healthy and mutually beneficial relationship between the Australian and Indian wool and textile industries will benefit not only the Australian wool industry, but all Australians through the significant contribution wool, and the whole of agriculture, can deliver to our nation through a strong trading relationship supported by the IA-CECA.

We look forward to the ratification of this agreement and have raised the importance of getting this done with the new Government.

WoolProducers have also been working with DAFF, to finalise the establishment of the Australia India Wool Working Group. The format of this group is based on the successful Australia China Wool Working Group and will enable industry-to-industry dialogue to achieve mutually beneficial outcomes for our respective countries.

This year celebrates 50 years of diplomatic relations between Australia and China, and I attended the official government celebration. The occasion was hosted by the National Foundation for Australia-China Relations and was marked by a gala dinner held at the NSW Art Gallery on 13 November. The evening included a video address by Prime Minister Albanese, along with speeches from the Minister for Foreign Affairs the Hon Penny Wong, Shadow Minister for Foreign Affairs the Hon Simon Birmingham, and the Chinese Ambassador Xiao Qian.

WoolProducers also participated in a meeting of the joint China-Australia wool working group in October. The Chinese industry emphasised their need to enhanced traceability of wool, stating that many of the Chinese mills are now able to utilise RFID (eID) technology and that they wanted to see eIDs introduced to Australian wool bales as soon as possible. During this meeting I provided an update on the Foot and Mouth Disease (FMD) situation in Indonesia and outlined the support that the Australian government is providing to assist Indonesia with control and eradication activities. It was emphasised that Australia remains free of Foot and Mouth Disease.

This presentation built on the weekly communications that WoolProducers were writing for the Chinese trade during the height of the global attention on the unfolding situation of FMD in Indonesia.

Speaking of FMD, the confirmation of the presence of this disease in our near neighbour in May and then detection in even closer proximity in Bali in July, set about mass panic within many parts of the Australian livestock sector. Whilst concern about this virus getting closer to our border was understandable, the frenzy that ensued was not.

Australia remains in the preparedness stage for FMD, like we have been for many decades. The government instituted a range of pre-and-at-boarder measures to assist in mitigating risks and continues to work closely with industry on these arrangements, if any criticism is to be aimed at the government in its response, it was maybe some of the actions could have been quicker. But regardless, the government took this issue very seriously and implement appropriate measures commensurate with the increase in risk, which WoolProducers were very supportive of.

Whilst the threat of an FMD incursion has certainly increased, it is worth noting that while the risk has increased following this detection in Indonesia, the chance of an FMD outbreak in Australia, according to the government is now an 11.6% chance in the next five-years – it is no means a certainty that we will have an FMD incursion.

The aim will always be to keep FMD out of Australia, but if the unthinkable was to happen, we as a nation are well prepared for an Emergency Animal Disease (EAD), and response and preparedness activities are something that WoolProducers and other industry bodies, have been working on for many years. While you can never be too prepared, we are well placed to respond to an EAD, including FMD.

What many Australians, including many people involved in the wool industry, didn’t seem to understand is that FMD has been present in approximately 77 countries around the world that we receive regular flights from every week. We have kept it out for over 130 years, and with the measures put in place we have every chance of doing so now.

In terms of Australia’s preparedness for an EAD, including FMD, there are also a range of in-country measures in place, starting with the Emergency Animal Disease Response Agreement (EADRA). The EADRA is a legally binding, contractual agreement between the Commonwealth, State and Territory Governments and industry to increase Australia’s preparedness and response capacity for an EAD.

The EADRA has been in place for 20 years and WoolProducers are the signatory on behalf of the Australian wool industry. The EADRA is a unique document in that it ensures that not only government, who will lead a response has a say, but more importantly industry, will form part of the response. This is done through the various levels of management committees that will be convened in a response.

As a signatory, WoolProducers have obligations that we must undertake on behalf of woolgrowers and the broader industry, both in the preparedness and response phases. These include things like ensuring that there are trained industry personnel to be called upon, the development of an industry response plan and risk mitigation activities including the implementation of industry biosecurity programs and activities.

Work has continued with the WoolProducers Post-Farm Gate Emergency Animal Disease Working Group, with the objective of preparing the entire domestic wool supply chain for an EAD incursion.

Membership includes representatives from AHA, AWI, AWEX, AWTA, AWH, Australian Council of Wool Exporters and Processors, National Council of Wool Selling Brokers Australia, WIA, Australian and State CVOs and the DAFF (Animal / Export division).

With WoolProducers facilitating this group, we have ensured that both the on-farm and off-farm wool industry sectors align in both preparedness and response activities relating to an emergency animal disease, which is a crucial outcome for the industry. WoolProducers has also ensured that this group is active in delivering outcomes rather than just convening a passive talk fest.

WoolProducers has also initiated the establishment of international trade protocols EADs for wool, to be driven through the International Wool Textile Organisation (IWTO).

The project intends to establish an industry endorsed protocol framework within the IWTO. The protocol will be based on the South African experience following FMD outbreaks in 2019 and 2022, with market access for greasy wool subsequently restored with certification that storage parameters (temperature x time) had been met as prescribed in the World Organisation for Animal Health Terrestrial Code.

The Project Team lead by WoolProducers General Manager, Adam Dawes, consists of members from Australia, New Zealand, South Africa and Uruguay. AWI have been very supportive of this project and have contributed financially to engage an external consultant to develop these protocols, which is greatly appreciated.

WoolProducers provided a submission into the Rural and Regional Affairs and Transport References Committee - Adequacy of Australia’s biosecurity measures and response preparedness consultation. Which in turn saw us being invited to appeared before the committee on 13th October to provide evidence in support of our earlier submission. Key issues discussed were concerns relating to industry and government deviating from processes established under EADRA, the lack of sustainable funding for Australia’s biosecurity system and the consequences that a FMD incursion would have on the Australian wool industry.

July saw the Australian Agricultural Ministers (AAM) Forum, which is comprised of state and territory Ministers for Agriculture and the Federal Minister for Agriculture come together and discuss relevant issues, announce in-principle support for the national roll out of electronic identification devices (eIDs) for the sheep and goat industries. This announcement was accelerated due to the increased biosecurity threat posed by FMD.

WoolProducers are supportive of this roll-out, on the proviso that it is considered as only one element of broader traceability reform. Creating an integrated and effective traceability system specifically aimed at mitigating biosecurity risks will increase our industry’s preparedness and response capability.

Whilst a traceability system will not prevent an outbreak of an emergency animal disease such as FMD, a robust system will determine how quickly such incursions can be brought under control, and how quickly freedom from such diseases can be demonstrated to trading partners, enabling a return to trade as soon as possible.

WoolProducers support for mandatory eIDs is also contingent on the establishment of a multi-species database, national harmonisation and equitable cost sharing arrangements between industry and government for the establishment and maintenance.

The announcement by the Government in this year’s budget of its commitment to co-invest with state and territory governments to allocate $46.7 million for continuous improvement of livestock traceability systems and the promotion of on-farm biosecurity, was welcomed as a good starting point, we are keen to see what the state governments bring to the table in terms of financial support.

WoolProducers has dedicated enormous resources to the co-design process that has been established to oversee this process in recent months. The aim of the co-design work was to focus on key implementation areas of governance, data, infrastructure and technology, cost implications, communication and engagement, and timeframes.

This process underpins the Sheep and Goat Traceability Taskforce (SGTTF), which is comprised of government and industry representatives, including myself, and will oversee the national roll out of individual eID for sheep and goats.

The key objectives of the SGTTF include:

· Implementation –develop a national plan, including timeline to guide all jurisdictions working toward 1 January 2025.

· Harmonisation-review and amend relevant rules and systems, including the National Livestock Identification System (Sheep and Goat) business rules, to support a nationally harmonised, fit-for-purpose system.

· Affordability-clarify costs and funding or other support to drive rapid and widespread adoption

· Continuous improvement –provide advice on actions to support improved livestock traceability systems overall.

WoolProducers also continues to facilitate the Wool Traceability Steering Committee, which along with WoolProducers is comprised of representatives from AWI, AWEX and AWTA.

This Committee is responsible for overseeing the implementation of the recommendations from the ’Traceability in the Australian wool and sheep industry’ report, which was commissioned by WoolProducers and delivered by independent consultants late last year.

The report made 14 recommendations, including eight priority recommendations that fall under the four key elements of a traceability system, those being:

identification of the source;

identification of the product;

a mechanism to record movement of the product; and

widespread engagement.

The implementation of these recommendations will see a fit-for-purpose traceability system to meet both the biosecurity and provenance requirements of our industry.

Labour shortages continue to impact every sector of our economy and the wool industry, particularly in the harvesting sector, which ultimately has flow on effects to the

WoolProducers has been working with key stakeholders over a number of years to address this problem, however, there continues to be no ‘silver bullet’ for the immediate shortage.

We continue to call for the establishment of a dedicated reciprocal shearer visa with countries where existing pools of shearing labour exists, as unfortunately current overseas labour schemes are not relevant to our sector.

WoolProducers were also monitoring the industrial relations reform in the lead up to the introduction of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill. While many aspects of this Bill that are supported, there were some areas of concern, that may have unintended consequences for our industry.

WoolProducers wrote to the cross benches expressing this concern and seeking that this Bill be split, to enable non-contentious issues to be passed through parliament, while providing more time and scrutiny of the more contentious issues. Unfortunately, the Bill passed through Parliament in early December and our concerns still remain.

2022 also saw the launch of the first Annual Report of the Sheep Sustainability Framework (SSF) at the Australian Sheep and Wool Show.

Led by Sheep Producers Australia (SPA) and WoolProducers Australia, the SSF is underwritten by four themes: caring for our sheep; enhancing the environment and climate; looking after our people, our customers and the community; and ensuring a financially resilient industry. Within those themes are nine focus areas and 21 priorities - monitored and measured by 58 data-driven indicators.

The report delivered on the world-first commitment of the Australian sheep and wool industry to create a data-driven yearly snapshot of sustainability performance.

WoolProducers are proud to be a custodian of this important framework, which for the first time will enable industry to be proactive in areas of concern. This level of transparency should be embraced by industry and viewed as a way to stay ahead of the curve when it comes to public perceptions.

In the lead up to the May, election WoolProducers launched our election priorities outlining a number of key recommendations under the five pillars of the ‘2030 Roadmap – Australian Agriculture’s Plan of a $100 Billion Industry’, including Customers and Value Chains, Growing Sustainably, Unlocking Innovation, People and Communities and Capital and Risk Management.

As an apolitical organisation, we work with the government of the day to achieve industry good outcomes.

2022 also saw WoolProducers provide a number of written submission into a range of issues affecting Australian woolgrowers, including:

· Pain relief product rescheduling consultations

· Revision of EU Legislation Animal Welfare

· National Biosecurity Strategy

· Inquiry into the adequacy of Australia’s biosecurity measures and response preparedness

· Australia-India Comprehensive Economic Cooperation Agreement

· EU Antimicrobial Resistance Consultation

WoolProducers have also had around 50 meeting with both sides of government and departmental representatives, including representation of woolgrowers at Ministerial roundtables, covering issues such as trade, EADs and natural disasters.

WoolProducers also regularly represents the interests of woolgrowers across numerous topics in both National Farmers Federation and Animal Health Australia forums, along with other industry meetings as they arise.

We have continued our Youth Ambassador program, following the completion of our successful Raising the Baa program under the Leadership in Agriculture Fund grant. We are excited to have Emma Turner in this role for 12 months, and hope that this experience provides an insight into policy development.

Emma follows last year’s two Youth Ambassadors Erin Douglas and Makaela Knapp, who both contributed greatly during their time, and we wish both of them well in their future roles as industry leaders.

WoolProducers has a small team of dedicated staff and volunteer directors, who deliver immense outcomes on behalf of industry, as evidenced in the above snapshot of this year.

I would like to thank Adam Dawes for his work and commitment to WoolProducers and the broader industry as he is integral in delivering so many of the outcomes of our organisation.

I would also like to thank Siobhan Wakely, our executive support for her assistance and problem-solving abilities, who makes our lives much easier.

Finally, I would like to acknowledge and thank Ed Storey as his time with WoolProducers. Ed has been with the organisation since 2012 and has played a massive part as a director, Vice President and then President. Ed has represented WoolProducers on so many issues during his time, with a lot of them being pretty unpleasant and thankless, including OJD management, animal welfare standards, industry reforms and of course politics.

I can say with absolute certainty that Ed is one of a very small number of people in our industry who is not driven by personal agendas, and he has always acted with integrity with the intent of delivering what is best for wool growers and the wider industry.

Ed has driven many positive outcomes in his time with WoolProducers and will be sorely missed. On behalf of WoolProducers and the industry, I wish you, Nikki and family all the very best for the future and sincerely thank you for your significant dedication over the past ten years. Our industry and organisation are indebted to you.

In saying that I’m looking forward to working with the new management team of President, Steve Harrison and Vice-President, Stacey Lugsdin and Board and the opportunities and challenges that 2023 will bring.

Jo Hall

CEO WoolProducers Australia


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