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Statutory obligations

As the designated Industry Services Body for the Australian wool industry, AWI collects woolgrower levies and matching Australian Government funds for eligible research, development and extension. A Statutory Funding Agreement (SFA) between AWI and the Australian Government is negotiated to ensure those funds are expended prudently and in line with levy payer and the Australian Government's expectations.

The Department of Agriculture and Water Resources manages the SFA on behalf of the Australian Government.

The SFA prescribes the following:

  • The functions and role of AWI
  • How AWI is to operate
  • The management and expenditure of levies and funds
  • Research and development activities eligible to attract matching government funding
  • Sanctions the government can impose should AWI breach the SFA
  • Activities AWI is prohibited from being involved in
  • How, when and to whom AWI must report and consult.

The SFA also requires AWI to undertake the poll of all eligible levy payers - the WoolPoll - to determine the rate of levy to be collected.

Before WoolPoll can be held, the SFA requires AWI to commission an external consultant to conduct an independent Review of Performance to provide woolgrowers with an independent assessment of the company's performance. The SFA outlines how this Review is to be conducted and who is eligible to conduct the review.

The levy rate determined by woolgrowers at WoolPoll forms the basis of the new SFA. In negotiating the SFA, both AWI and the Australian Government also consider the outcomes of the independent Review of Performance, and changes to government policy, to ensure ongoing improvements to the company's operations and return on levy payers' investment.

Click here (PDF 1.6Mb) to download the current SFA.

Other governing obligations

In addition to its statutory funding obligations, AWI's operations are governed by the following:

AWI business model

As wool was the first rural industry to identify the need for research and development, AWI is always mindful of its ultimate raison d'etre - to invest in research, development & marketing (RD&M) to identify new practices and technologies to be adopted by woolgrowers to enhance farm gate returns.

The AWI model is the culmination of almost eighty years of significant industry change and subsequent institutional evolution within the wool research and marketing bodies in Australia. In recent decades, Australia has stopped 'riding the sheep's back' (although Australia continues to be the largest producer (90%) of global fine apparel wool, and wool is the largest rural and sixth largest commodity export from Australia to China). Against this background of a changing industry, the wool industry research and marketing bodies have been continually evolved and refined over time.

AWI as an entity has delivered a relatively long period of stability to industry service provision since its establishment, perhaps indicative that the right model has been achieved. Despite this period of stability, AWI has continued to evolve and improve since its establishment in 2001 ensuring it is 'fit for purpose' and responsive to industry and government needs. Significant change has occurred within the business particularly since 2009.

If anything history has taught us that a key feature of the industry and organisation is change; hence the need to be responsive and adaptive. AWI continues to look at ways of improving the business model on a regular basis to ensure it remains responsive to industry and government.

Woolgrowers have the ultimate influence over their levies in AWI, through the ability to vote on the levy at WoolPoll every three years (including a zero option); and through a robust consultation and engagement plan to seek input on priorities and report on AWI’s performance.

AWI believes that its business model is the beneficiary of the many lessons learned by the industry over 80 years. These lessons, the commitment of the board to be responsive to industry, in addition to the statutory requirements of WoolPoll,  the independent ROP and various reporting requirements, have driven a culture of performance and reporting within AWI at all levels of the business.

Further details about AWI’s business model is contained in AWI's submission (PDF 2MB), dated November 2014, to the Senate Rural and Regional Affairs and Transport References Committee Inquiry into "Industry structures and systems governing the imposition of and disbursement of marketing and research and development (R&D) levies in the agricultural sector".