UFU respond to DEFRA review on British Wool

The review considered the current model for British Wool, determined the future regulatory framework of British Wool and its future relationship with government

There were 16 questions on the review to respond too. The Ulster Farmers’ Union (UFU) hill farming policy committee led the response with an input from the beef and lamb policy committee. Many of the questions were very generic but there was a few that enabled us to provide constructive answers and hopefully, this will give you a better understanding of the working of British and Ulster Wool.

One of the key questions was, what aspects of the current model which you consider to be barriers to growth or change in the wider supply chain?

Our response: We (UFU) don’t believe that the UK 1950 Order could be enforced in Northern Ireland (NI) particularly with Irish merchants playing a role here with cross border trade. A key barrier to growth is the risks associated with repeal of the 1950 Order. However, it could be mitigated by the government supporting British Wool by subsuming the pension scheme deficit which was accrued during the government guaranteed price era up until 1991. Removing the requirement for British Wool to fund the pension deficit, would reduce the future costs and overall risk for British Wool and leave a fairer return to producers.

In effect, British Wool is a perfect model of a producer’s co-operative, and if government would take ownership of the aforementioned pension scheme deficit and then “let go”, perhaps a strong producers cooperative could be the desired model moving forward.

Another key question was, which aspects of the existing model do your members find challenging?

Our response: The back loaded payment system can put producers off suppling wool to British and Ulster Wool, although they will receive the full value of their clip the following year. This is likely the main reason some opt to sell to other merchants.

Some found it difficult to understand why British and Ulster Wool charged transport costs as well from local agents/collection centres to the depots. This year we welcomed Ulster Wool’s decision to scrap transport costs, although we know they come out of the overall operational costs.

Another important question, does the current way the wool market operates, i.e. with British Wool as the regulated collecting agent; add value to your members? Does it add value to the whole sector and supply chain?

Our response: Yes, the collective marketing of wool is very important, without some sort of large-scale collection this would not be economically possible. The average ewe flock in NI is 109 and many can have multiple breeds. Many of our members tell us that on an average, three - four years, Ulster and British Wool does pay slightly more than the private merchants. As the UK has only two of Europe’s scouring plants, large-scale collection and grading of wool is key to their survival as well.

British and Ulster Wool accept all wool types. If there was not a collective collection and marketing of all wool types, there would be less of a return to many producers - this would be unfair. Taking all wool also helps to keep operational costs lower to allow better access to markets and to achieve a better return for better grades of wool. Many EU countries are dumping poor quality wool, this is a shame as wool is such a sustainable product with many benefits.

British and Ulster Wool operate under cooperative principles which many of our members prefer and they seek to maximise returns for all producers. If there were shareholders, then producers would likely receive less for their wool.

If the UK market did not have an organisation like British Wool, what benefits or challenges would you foresee?

For members: We would find this very challenging, who would we go to for marketing information in relation to collection, grading, marketing of wool across the UK? British and Ulster Wool played a hugely important and critical role in heling present the case for compensation during the COVID-19 pandemic in NI.

For the UK wool market and supply chain: Who would take control of the large-scale collection, grading and marketing of wool in the UK? If British and Ulster Wool was to go, were would this leave supply for the two UK scouring plants? British and Ulster Wool create many jobs inside and outside the organisation and this also plays its part in the local and rural economy which is also critical. If British and Ulster Wool didn’t exist who would take lower quality wool and this would very a more volatile and unstable market.

Is there anything else you would like to tell us that would be pertinent to the review?

British and Ulster Wool are some of the few approved providers for shearing and wool handling training in the UK, with a programme designed to support candidates of all abilities in learning and developing a traditional rural skill.

British and Ulster Wool courses are recognised across the world and tailored to individual level of ability – from an absolute beginner (Blue Seal) to an advanced stage (Gold Seal). Course content is designed to achieve several individual objectives - from shearing your flock more efficiently and effectively, to building foundations for career entry opportunities, to supporting entry at global competitions of the highest standards.

The independent wool merchants across the British Isles do not make any investment in training shearers and this must be considered seriously because if British and Ulster Wool did not do this then who would take responsibility for this?

Also, at a time of crisis British and Ulster Wool stepped up to the mark to provide additional training and protocols for shearers and farmers. Most recently during the COVID-19 pandemic, and this has been done before as during the Foot and Mouth disease in 2001. Similar protocols were put in place to ensure that shearing was able to be completed. Critical that sheep are shorn from an animal welfare prospective.