What's on the line with wool industry levy?

Where marketing dollars are spent, which R&D projects will be continued and if any will be dropped, and what benefit this is to growers has a flow-on effect nation-wide.

Elders' Yennora wool technical manager Craig Brennan believes funding needs to be spent differently.

"Industry doesn't get a vote on the levy rate but AWI needs the funding to be able to do a better job," Mr Brennan said.

"What is the point of R&D if there is nowhere to market the wool?

"As things stand at the moment, maybe a higher percentage should be going towards marketing."

Mr Brennan said there was too much reliance upon China buying our export wool and that needs to change.

"Where Australian wool is being marketed needs to be diversified," Mr Brennan said.

"We can't just rely upon selling our wool to China.

"We saw what can happen with barley and wine where they had to find new markets.

"AWI needs to break into new markets before this becomes a problem."

Mr Brennan said there is an opportunity for wool to follow the lead of cotton and grow its global market share.

Natural fibre holds 28 per cent of the global fibre market, of which 25pc is cotton with Australia exporting the third largest amount behind the US and Brazil.

Mr Brennan said wool needs to better sooner rather than later.

"There is an opportunity for Australian wool to increase its share of the world fibre market," he said.

"Currently Australian wool only has three per cent of the market and that needs to increase.

"Take cotton for example. It is on the rise and in demand.

"Australian wool needs to be recognised the world over as the great product it is."

Wool Producers Australia chief executive officer Jo Hall said her organisation had not yet formed a position on whether the levy should be raised or not, as it was awaiting more information from AWI.

"We simply don't have a recommendation at this point in time," she said.

"When AWI comes out with how the levy will affect it, we will decide what to do then."

Ms Hall said AWI was doing some very good things for the industry.

"The investment in shearer training and shed hand training was much needed by industry," she said.

"We had the labour shortage, which was emphasised by COVID and not being able to access overseas labor.

"The focus of AWI on that area has been really well received by industry.

"The investment looking at harvesting alternatives such as biological harvesting and the work they're doing with University of Sydney is positive too.

"Even if it doesn't provide the silver bullet, it's certainly a worthwhile investment investigating other ways to look at harvesting."

She said AWI was also doing great work on European Union environmental footprint advocacy.

"That has been looking like delivering really perverse outcomes for natural fibres and particularly Australian wools," she said, of the potential fallout from EU environmental policy.

"Also I have to say, the wool not fossil fuel campaign underscoring the eco-credentials of wool (was good). That has real positives from AWI's work."

While Ms Hall sees the positives in AWI's performance, she also believes there are areas where they could be doing better.

"Not to be too blunt, but look at where the EMI (Eastern Market Indicator) is sitting at the moment," she said.

"We're just not getting the returns on investment that growers need at the moment.

"That is not solely AWI's fault because there's so many external factors impacting the price of wool.

"When AWI is spending 60 per cent of their expenditure on marketing, we're just not seeing the results that we need to see.

"So that's a huge concern. We've got growers that are really considering their future in the wool industry based on current prices, and we really need to see an uptick in the market to encourage people to stick with it.

"The reality is that a 60-40 marketing split has been in place for 11 years.

"It's just that at the end of the day, that's what keeps the industry growing is the price that people are receiving and I can't say that it's great at the moment."

Australian Superfine Wool Growers Association president Mark Waters said while the group was yet to decide on a position in regards to the levy, he felt there was support among members to go back to 2pc.

"As an organisation, we don't have a stance on the levy rate yet, but most of our members are quite supportive of going back to 2pc," he said.

"Mainly because nobody else is actually doing the things AWI is doing."

The amount of money they have or don't have is really impacting the marketing budget.

"We need those marketing dollars to help improve our foothold in export markets and to get into new markets," he said.

"Another important issue AWI is working on is the product environment footprint in Europe.

"That's a disaster. AWI have feet on the ground over there, getting meetings and working to put our case forward.

"Without AWI working for our wool growers on this, we wouldn't have a voice."

Mr Waters is concerned if the levy isn't raised AWI will be forced to cut important projects and maybe some staff as well.

"If AWI was forced to start cutting staff, it would be a great shame," Mr Waters said.

"I think the people they have now are all really good and it would not be good to lose them."

Mr Waters said some growers are looking at the levy from the wrong point of view.

"I talk to some people and they call it the wool tax," he said.

"It's not a tax and that's not the way to look at it.

"Wool growers need to look at the levy as an investment in the industry.

"Looking at it as a tax is very shortsighted, but too many only look at what is happening on their farm."