The BWMB
Where has it all gone wrong?

Dumfries and Galloway Standard June 2008

The British Wool Marketing Board is a grand title that conjures up an image of an organisation that is professional, solid and dependable.  So where has it all gone wrong?  The latest wool price schedule, sent out to farmers this year, has so much spin applied to it; Tony Blair would have blushed with embarrassment if he had produced it.  The annual publication should provide farmers with factual information about the business of the board and the value of the wool that it markets on our behalf.  But this year it is so heavily laced with catchy sales pitches and half truths, designed to keep us all on-side, it leaves you wondering how bad are things with the board?   They seem to have forgotten that they are a farmer run organisation that is supposed to be working for the benefit of the UK’s wool producers.  It is a relationship that depends on trust and transparency.  Sadly that trust has all but disappeared and the transparency now seems to be shrouded in a worrying veil of broad generalities and deceptive claims that are designed to jolly us along like gullible punters.

The damage limitation exercise that is going on at the moment is a result of the ridiculously low wool cheque that farmers received last year.  The drop in the average price of wool that was sold at auction in the 2006/2007 season was flagged up by the board as being the reason for the huge reduction in the price that was paid to farmers.  But, the sums don’t stack-up very well.  The 10.6 pence per kilogram drop in the auction price of wool resulted in a 17.5 pence per kilogram reduction in the price that was paid to farmers for their 2007 clip.  But even more alarmingly the board has, at a stroke, changed its policy of paying farmers a large advance payment for their current year’s clip followed by a small balancing payment in the next year.  They have implemented a new policy of paying a very small advance payment with hope that a larger balancing payment will follow in the next year. 

Unfortunately all this has lead to a crisis of confidence in the organisation.   Producers are worried that eventually there will come a day when they receive a small advance payment followed by no balancing payment at all. These fears are not unfounded.  There is a deficit in the board’s pension fund that looks to be equal to the wind-up value of the entire organisation.  I suspect that the pension fund trustees are now the tail that is wagging the dog.  Their main focus might not be the marketing of wool or maximising the return to farmers! 

The depth of these concerns was brought home to me recently when I met up with a handful of fellow sheep farmers.  In the course of the evening I was appalled to discover that I was the only producer amongst the six of us sitting round the table that had sent his wool to the Board last year.   The others had all turned their back on the Board and had sold their clip to a wool exporter who pays them an agreed price on the day for the wool that is delivered; a simple arrangement that has trust and transparency built in as standard.

Unfortunately, the result of producers abandoning the Wool Board only serves to compound the problems that the Board are facing.  The exporters have positioned themselves in areas where they can cherry-pick large amounts of wool with minimum cost to themselves or to the producers who can deliver their wool to them using their own farm vehicles and labour.  This leaves the Board to try and deal with all of the less accessible areas of the country.  This will mean that the cost of running the Board and ever spiralling transport costs will devour an even greater portion of our diminishing wool cheque. 

This does not bode well for the future of those of us who continue to support the Wool Board through either loyalty or necessity and who can blame the others for cashing in their interest in the Board by selling to the exporting companies.   

The British Wool Marketing Board, if it is to survive, must regain the trust of wool producers by de-mystify its activities and start to engage them in honest straight talk.  Unless this happens the whole thing will go POP!

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