IN THE NEWS: On OCT 24, 2017
Wool growers have alleged their industry body, Australian Wool Innovation (AWI) has a "toxic culture" that is holding farmers back.
A bitter divide between traditional and progressive farmers has led to allegations that AWI — a grower and taxpayer-funded marketing and research body — is not spending enough money to help farmers phase out mulesing.
Mulesing is the controversial practice where farmers cut away skin from a lamb's buttocks to prevent flies attacking. Animal activists and fashion houses have long lobbied Australia to phase out mulesing like New Zealand and South Africa.
The troubles have reached a point where some wool growers have called on the Federal Government to cut the more than $13 million it gives AWI each year.
"I would describe the culture at AWI as toxic and it shouldn't be that," Western Australian wool grower David Thompson said.
It comes as AWI leaders mired in controversy prepare to face a grilling from senators today amid an industry scandal that brought deep-seated tensions to the fore.
Of particular concern for Mr Thompson is AWI's chairman, Wal Merriman, who recently told an ABC reporter to "f*** off".
"He's punch drunk on his own power and I cannot stand that and I think we will suffer for it," he said.
Mr Thompson wants issues such as potential conflicts of interest, transparency and alleged breaches of corporate governance addressed.
Part of Mr Thompson's anger is about AWI's approach to mulesing.
Fears business could suffer without more money for research
In 2009, AWI dumped a long-standing promise to phase out mulesing the following year.
It has also stopped funding some genetic research, which can help farmers stop the practice.
That has worried one of the country's biggest wool growers, Michael Field, from Jugiong in New South Wales.
"If PETA and animal activists get hold of it and start showing again those photos of that bloodied arse lamb in the cradle, with a big wound, it's going to create negative publicity and the mills, particularly in Europe, will back away from using wool in their products," he said.
Wool growers and taxpayers contributed $64 million to AWI in the 2015-16 financial year.
The organisation spends about 60 per cent of that on marketing, while 40 per cent goes towards research and development.
"We have a myth that they perpetuate that if we pay them a tax of 2 per cent of our gross income, they will look after the marketing and innovation of our industry and that is a complete and utter myth," said Peter Small, a western Victorian wool grower and chairman of a knitwear company.
Mr Small wants Agriculture Minister Barnaby Joyce to restructure AWI to be solely a research organisation.
He said nothing would change without big change.
"The culture is toxic. It has been since 1936 and it's getting worse," he said.
"There's plenty of evidence that you can change the board, change the chairman and in 10 years' time you'll be back to square one."
Mr Thompson said he wanted the government to go further and disband AWI.
Farmers worry about speaking out
The AWI chairman Wal Merriman's 150-year-old Merryville stud prides itself on traditional breeding methods and his merinos have to be mulesed.
Mr Small said the directors of his knitwear company feared there would be consequences for his speaking out.
He said this reflected broader industry concern among growers who spoke out against the direction AWI was taking the industry.
"I can understand people being a bit cautious [to speak out]. I think the younger people are just fed up with this bloody politics," he said.
"They just want to get on with their job.
"They can see that trying to do anything with this wool politics is impossible, so they've given up.
"They've walked away. But we can't give up on it."
Chairman apologises for secretly watching growers
Mr Merriman, who has the support of many farmers, was not available for an interview ahead of today's Senate hearing.
The ABC yesterday revealed Mr Merriman, who earns about $160,000 from AWI, sent a letter of apology to the farmers he had secretly watched in the so-called Man in the Mirror scandal four months ago.
He has faced calls to resign since the incident was revealed.
Those calls escalated when he told an ABC reporter to f*** off and called him a "useless prick" when approached to comment about the mirror incident.
AWI Board transparency under question
Senators questioned AWI bosses about transparency at board elections following concerns raised by growers.
It was revealed Mr Merriman controlled more than one-fifth of proxy votes in AWI board elections.
He told Senators he was given 20,000 of the 90,000 shareholder votes at board elections last year but claimed they were "given" to him voluntarily by farmers.
"How do you expect me to stop them from giving them to me?" Mr Merriman asked Queensland LNP Senator Barry O'Sullivan.
Senator O'Sullivan responded: "You need to decline them".
He told Mr Merriman AWI should introduce new measures to stop any board directors from casting proxy votes in board elections.