Australian Wool Innovation's new board will have to consider what programs might see reduced funding following the return of the 1.5 per cent levy, current chairman Jock Laurie says.
Woolgrowers voted to mantain the 1.5pc levy in the most recent WoolPoll, despite AWI pushing for producers to support a 2pc levy.
After preferences were distributed, 69pc of votes favoured the 1.5pc rate.
Levy payers also voted in favour of the maintaining the current three-year WoolPoll cycle, rather than moving to a five-year cycle.
Mr Laurie said the 2pc recommendation was made because of uncertainty in the marketplace and because of the level of investment desired by growers.
"The industry have been quite clear that they want further investment in areas like dogs and in R&D areas around breeding, flies, shearing and a whole range of things," he said.
"Then there's an expectation that we're going to deal with the [European Union's] Product Environmental Footprint legislation and that we're going to build demand internationally.
"When the industry has an expectation for all those things, then it needs to be funded.
"The board sat in a position that 2pc would give you an opportunity to do that and also provide a buffer in the cycles of the market."
Mr Laurie said given the industry decision to return the 1.5pc levy, the board that's elected in the upcoming annual general meeting will have to determine the priorities for spending.
"There's a lot of expectations about what AWI will do but in the end AWI will only do what it can afford to do," he said.
"The board is put in place to make these decisions and they will have to make decisions based on the finances they've got, where the market is, where the EMI is, where production is and knowing that the levy rate is 1.5pc.
"They'll make a decision about whether they make across the board cuts or whether they'll prioritise areas but that will be up to the new board."
Mr Laurie said during the last three years on a 1.5pc rate, the board had downsized the company by about 30 to 35 per cent in terms of staff.
"They changed the company around, took a lot of the costs of the company out because we didn't know where the end of COVID was and then put ourselves in a position where we could strongly reinvest when that market signal started to change," he said.
"So there's already been tough decisions made and while there's been some cuts to programs, there's also been major cuts to the staffing which has had an impact on delivering to growers.
"The new board, whoever they are, will work out what balance they think is right in the current environment."
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