Report Of Wool Marketing Committee

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OSOTANX& UNIVERSITY tlBRARY

MINISTRY OF AGRICULTURE AND FISHERIES
DEPARTMENT OF AGRICULTURE FOR SCOTLAND

REPORT OF

WOOL MARKETING

COMMITTEE

Crown Copyright Reserved

DN : HIS MAJESTY'S STATIONERY OFFICE

^1946

FOURPENCE NET

MINUTE OF APPOINTMENT

WE hereby appoint

Lt.-Col. the Rt. Hon. WALTER E. ELLIOT, M.C., M.P.,

Mr. J. BOWMAN, M.B.E., J.P.,

Mr. D. 0. EVANS, M.P.,

Mr. T. G. HENDERSON,

Sir HAROLD G. HOWITT, D.S.O., M.C., F.C.A., J.P.,

to be a Committee with the following terms of reference :

" To examine the pre-war arrangements for the marketing of wool by
producers in Great Britain, and the changes introduced under wartime
control ; and having regard to the views and recommendations of the
Committee on Hill Sheep Farming in Scotland, as set out in their report of
December, 1943, to the Secretary of State for Scotland, to consider whether
the organisation of wool marketing after the war could be improved through
the medium of a scheme under the Agricultural Marketing Acts, 1931-1933,
or by any other means, and whether conditions and requirements in England
and Wales and Scotland respectively are such as to necessitate separate and
different arrangements in regard to wool marketing in any of these countries ;
and to report accordingly/'

We further appoint Lt.-Col. the Right Honourable Walter E. Elliot, M.C.,
M.P., to be Chairman, Mr. A. H. Clarke, of the Ministry of Supply, to be
Secretary, and Mr. G. S. Baker, of the Ministry of Agriculture and Fisheries,
and Mr. A. F. Smith, of the Department of Agriculture for Scotland, to be
Assistant Secretaries of the Committee.

(Signed) R. S. HUDSON,

Minister of Agriculture and Fisheries.

(Signed) THOMAS JOHNSTON,

Secretary of State for Scotland.
5/A December, 1944.

The estimated cost, to date, of the preparation of this Report is^29i os. od.
of which 34 os. od. is the estimated cost of printing and publication.

TABLE OF CONTENTS

Page

Chapter I, General Survey 5

Chapter II. Pre-war Methods of Marketing 8

Fleece Wool 8

Skin Wool IO

Prices Paid to Producers ... ... ... ... IO

Chapter III. Wartime Methods of Marketing n

FleeceWool ll

Skin Wool JI

Wartime Prices ... ... ... ... I2

Chapter IV. A Review of the Evidence 12

Producers... ... ... I2

Merchants *4

Manufacturers J 4

Fellmongers ... ... ... J 5

Chapter V. Marketing Act Procedure 1 6

Chapter VI. Conclusions I( >

REPORT OF THE WOOL MARKETING COMMITTEE

To the Right Hon. JOSEPH WESTWOOD, M.P., Secretary of State for Scotland
and the Right Hon. TOM WILLIAMS, M.P., Minister of Agriculture and Fisheries.

SIRS,

1. We were appointed on 5th December, 1944,

" To examine the pre-war arrangements for the marketing of wool by
producers in Great Britain, and the changes introduced under wartime
control ; and having regard to the views and recommendations of the
Committee on Hill Sheep Farming in Scotland, as set out in their report of
December, 1943, to the Secretary of State for Scotland, to consider whether
the organisation of wool marketing after the war could be improved through
the medium of a scheme under the Agricultural Marketing Acts, 1931-33,
or by any other means, and whether conditions and requirements in England,
Wales and Scotland respectively are such as to necessitate separate and
different arrangements in regard to wool marketing in any of these countries ;
and to report accordingly."

2. In the closing stages of our deliberations the Committee suffered a great
loss by the sudden death of Mr. D. 0. Evans, M.P., who had taken a most
important share in our enquiry, particularly in regard to Wales. We had,
however, in our meetings prior to his death arrived unanimously at our main
general conclusions.

3. As an opening of our enquiry, notices were issued through the medium
of the Press announcing our appointment and inviting organised bodies of
the various interests concerned to submit their views. This announcement
was followed by separate invitations to each of the bodies primarily concerned.

4. In response to these invitations, written representations were received
from the following :

Associated London Selling Wool Brokers,

Auctioneers & Estate Agents Institute of the United Kingdom,

British Paper Machine Felt Association Ltd.,

Carpet Trade Sectional Rationing Committee,

Central Landowners' Association,

Central Wool Growers Ltd.,

Cheviot Sheep Society,

Co-ordinating Committee representing :

British Wool Federation,

Country Wool Merchants' Association,

Welsh Country Wool Merchants' Association,
Council of Agriculture for Wales,
Dorset Down Sheep Breeders' Association,
Eastern Wool Growers Ltd.,
Exmoor Horn Sheep Breeders' Society,
Fellmongers' Association of Gt. Britain & Ireland Inc.,
Hebridean Spinners' Advisory Committee,
Herdwick Sheep Breeders' Association,
Highland & Agricultural Society of Scotland,
International Wool Secretariat,
Joint Committee of Producers' Organisations in Scotland (convened by

the Scottish Agricultural Organisation Society Ltd.),
Kent Wool Growers Ltd.,
Kilmarnock & District Woollen Spinners' Association,

Land Union,

Leicester Sheep Breeders' Association,

National Association of Scottish Woollen Manufacturers,

National Farmers' Union,

National Sheep Breeders' Association,

Northern Pastoral Club,

Royal Agricultural Society of England,

Ry eland Flock Book Society Ltd.,

Scottish Council on Industry,

Scottish Fellmongers Limited,

Scottish Hide, Skin and Tallow Brokers' Association,

Scottish Wool Growers Ltd.,

Skinners' Association of Scotland,

South Devon Flock Book Association,

Swaledale Sheep Breeders' Association,

Welsh Wool Growers' Conference (convened by the Welsh Agricultural

Organisation Society Ltd.),
Wool Federation of Scotland Ltd.,
Wool Textile Delegation,
Yorkshire & Northern Wool Growers Ltd.,
Zetland County Council.

5. We have held twelve meetings, at six of which we heard oral evidence
from deputations representing the following :

Joint Committee of Producers' Organisations in Scotland,

National Farmers' Union,

Northern Pastoral Club,

Welsh Wool Growers' Conference,

Zetland Woollen Industries Sub-Committee.

Central Wool Growers Ltd.,

Eastern Wool Growers Ltd.,

Kent Wool Growers Ltd.,

Scottish Wool Growers Ltd.

Fellmongers' Association of Gt. Britain & Ireland, Inc.,

Skinners' Association of Scotland.

Associated London Selling Wool Brokers,

Co-ordinating Committee representing :

British Wool Federation,

Country Wool Merchants' Association,

Welsh Country Wool Merchants' Association,
Wool Federation of Scotland Ltd.

National Association of Scottish Woollen Manufacturers,
Wool Textile Delegation.

6. Our report which follows is unanimous.

I. GENERAL SURVEY

7. We think it desirable as a preliminary to give a general picture of the
home output of wool in relation to world production and to the needs of the
manufacturing industry in Great Britain.

8. During the five years prior to the war there was little variation in the
wool production of Great Britain. The annual average was in the region of
105 million Ibs., of which about 75 million Ibs. was fleece wool and the balance
lellmongered or skin wool, i.e., wool removed from sheepskins. The decline
in the sheep population during the war years has resulted in a corresponding

47385 A *

decline in fleece wool production which, during the past three years, has
averaged some 56 million Ibs. annually or a drop of 25 per cent. Skin wool
production has been maintained at the pre-war level of some 30 million Ibs.
a year. Of the current fleece wool production, about 32 million Ibs. or 57 per
cent, is grown in England, 18-3 million Ibs. or 33 per cent, in Scotland, and
5-7 million Ibs. or 10 per cent, in Wales. As is shown in the following table
this total of 56 million Ibs. is spread over a large number of growers, very
many of whose flocks are of small size, especially in England.

Wool Producers in Great Britain in 1944

Size of Clip No. of Producers*

Up to 40 fleeces 42,099

41 ioo 20,555

101 250 15,552

251 5oo 5A35

501 ,, 1,000 ,, 2,491

Over 1,000 ,, ... ... ... ... *>75

Total ... ... ... 93,607

* Not including producers in the Shetlands, Orkneys and Outer Hebrides.

9. About 70 per cent, of the current output, or approximately 60 million
Ibs., consists of " apparel " wools, i.e., wools used in the manufacture of
textiles for clothing and household purposes. This wool is in the " crossbred "
range, as distinct from " merino " and " carpet " wools. The remaining
30 per cent., or approximately 26 million Ibs., is " coarse " wool used primarily
in the manufacture of carpets. The largest quantity, and the best known,
of these coarse wools is obtained from the Blackface breed of sheep. It is
relevant to point out that with a few minor exceptions there is no type of
wool produced in Great Britain that is not in competition with oversea wools.
There is, however, no home production of the fine merino wools such, for
example, as are grown in Australia and South Africa, and are in great demand
by the textile manufacturing industries of the world for clothing and for the
finer fabrics for household purposes.

10. Annual world wool production in the five pre-war years is estimated
to have been little short of 4,000 million Ibs., or some 36 times the total pre-war
production in Great Britain. Of total world output approximately 3,200
million Ibs. were apparel wool (merino and crossbred) and 800 million Ibs.
were carpet wool. Some countries (e.g. U.S.A. and Russia) have a substantial
output, which is absorbed in domestic markets. The United Kingdom and
most European countries, are large importers, mainly of apparel wools. The
principal exporters of apparent wools are Australia, New Zealand, South
Africa and South America, and it is from these sources that the main United
Kingdom supplies are drawn.

11. The U.S.A. is the principal importer of carpet wools, the annual average
intake during the five years 1934-38 having been about 140 million Ibs. Rather
more than 60 per cent, of this total was supplied by the Argentine, India and
China. About 10 per cent., or approximately 14 million Ibs. came from the
United Kingdom.

12. In 1938, imports into Great Britain were nearly 900 million Ibs. Of this,
some 270 million Ibs. were re-exported as raw wool. In the same year domestic
production of both fleece and skin wool in Great Britain was about 105 million
Ibs., of which some 33 million Ibs. were exported in the raw state. For that

year, therefore, the total wool retained in the country, and thus available
to manufacturing interests, was in the region of 700 million Ibs., of which
72 million Ibs. or about 10 per cent., were home grown.

13. During the war years, wool growing in the main producing countries
has not declined and, as a result of the closing of a number of important markets
(e.g. Europe and Japan), large stocks have accumulated. The stocks owned
by the United Kingdom Government, and at present held mainly in the three
principal wool-growing Dominions, are not less than 3,000 million Ibs. In
addition, considerable stocks are believed to be in existence elsewhere, particu-
larly in South America.

14. The wool textile industry in the United Kingdom is of substantial
dimensions and in the immediate pre-war years gave employment to not far
short of a quarter of a million persons, mostly engaged in the many processes
through which raw wool must pass in the course of conversion into the great
variety of products made by textile manufacturers. In addition there was a
large number of workers engaged in the making-up trades. The re-export
of a considerable quantity of overseas wool was also an important part of the
wool trade. Another section of the trade merchant ed the imported wools
retained for home consumption. Some of the firms also merchant ed home-
grown wools. A great proportion of the pre-war output of the manufacturing
section of the industry was absorbed by the home market, but the volume of
exports (which averaged more than 30 millions during the five years 1934-38)
made a substantial contribution to the total export trade of this country.

15. During the war period the manufacturing industry has had its activities
regulated for the purpose of securing the products most needed for the war
effort. This has resulted in a considerable reduction in the variety of wool
textiles, and a very drastic curtailment of our export trade both in the manu-
factured product and in raw wool. Difficulties of shipping have necessitated
the use of some types of wool for purposes for which, under normal competitive
conditions, they would not be regarded as suitable. This has applied particu-
larly to certain varieties of home-grown wools, so that while normal exports
of the latter have not been possible, a wider use has been developed in the
home industry as an emergency measure and today there are practically no
surplus stocks of home wool.

16. As to the future. In a world that for some years has been very short of
its normal supplies of wool textiles, a period of keen demand can be anticipated
with some confidence. The large stocks which have accumulated in the
Dominions during the war years will be available to meet this demand but it
may be expected that United Kingdom raw wool will also find a good outlet
in view of the market it commanded in normal times both here and overseas.
Discussions on the best means for disposing of the overseas stocks have taken
place in London at a Conference of officials and experts from the United King-
dom, Australia, New Zealand and South Africa. The report and recommenda-
tions of the Conference have been accepted by the Governments of each of the
four countries. The following summary of the recommendations is contained
in an official statement issued by the Ministry of Supply :

" Present stocks are equal to more than two years' production in the
Dominions, and it is estimated that, after allowing for a considerable expan-
sion of world consumption, orderly disposal of the surplus may take a con-
siderable number of years. The stocks of wool will in future be held by
the United Kingdom and Dominions Governments in partnership, and a
Joint Organisation will be formed to take charge of the marketing of old
wool and to support the marketing of current clips during the disposal
47385 A 3

of the surplus. It is intended that as soon as conditions permit current
clips shall be offered at auction as before the war, and that in addition the
Joint Organisation will offer wool from stock at the auctions, with the object
of maximising total sales and turning over stock. All wool will be offered
subject to minimum reserve prices and the Joint Organisation will take up
such new wool as is not sold at or above these prices. It is recognised that
the trend of wool prices must move in accordance with general world con-
ditions and the need to expand consumption. At the same time wide price
fluctuations will be avoided by the joint measures of adequate offerings and
reserve prices. The four Governments will share the capital, costs of the wool
held by the Joint Organisation, and of new purchases by it, and the cost of
holding and marketing the wool in stocks, and will share the ultimate profit
or loss."

17. There is one other aspect of the future market prospect to which we
desire to draw attention. As will be seen in paragraph 41, the price level of
the Dominion wools during the war years has been much below that paid to
the home grower. We are not in a position to forecast what the future trend
may be but it seems a reasonably safe assumption that at least no higher level
than that reached under wartime conditions will obtain for the Dominion
wools. This no doubt will set the standard in world markets and influence
the price that the home grower would receive in a free market.

18. In this general review we find it necessary to consider the influence
on world wool markets of synthetic fibre production and development. No
firm figures of output are available, but there has been a rapid expansion in
volume of output and also in variety. It is probable that in 1942 the total
world output of synthetic fibre was not less than 2,000 million Ibs. It is not
within our province to forecast the future use of synthetic fibres, but it is
apparent that great progress has been made and that further active develop-
ments are taking place. The price levels of the synthetic products are far
below those which wool growers would regard as remunerative.

II. PRE-WAR METHODS OF MARKETING
Fleece Wool

19. Before the war home-grown wool was marketed in a number of different
ways. These had grown up over a long period of time as a result of the great
variety in breeds of sheep, size of clip, and type of wool on the one hand, and,
on the other, the varying degrees of preparation that are necessary in order
to render it suitable for the requirements of manufacturers. In areas where
the clip consisted mainly of one type of wool which, in general, was required
by only one type of manufacturer (e.g. the Scottish Blackface clip), the process
of marketing was relatively simple. The position was very different in the case
of some of the more varied clips in England, where even individual consignments
had in many cases to be separated into quite different lots.

20. The great bulk of home-grown wool was sold by producers to one or
other of the different types of wool merchants. A small proportion, varying
greatly in different parts of the country, was sold by producers direct to manu-
facturers. In both cases sales were usually negotiated by private treaty
with individual producers, but some were made through brokers, some through
producer-co-operative societies, and some by auction at country or metropolitan
wool markets.

21. Wool merchants who purchased direct from producers may be classified
as follows :

(a) Those who resold to other merchants without grading, or any other
intervening preparation.

(b) Those who graded the wools, and sold to other merchants but not to
users.

Both the above types included merchants who took wool in part payment for
seeds, fertilisers, and other farm requisites.

(c) Those who bought both from producers and from other merchants,
graded the wools, and sold direct to manufacturers both here and overseas.
Some of these merchants were " topmakers ", i.e. they sorted and processed
the wool to the stage of " tops ", the raw material of the worsted spinner.
Some also merchanted imported wools. The work done by this type of
merchant was often of a highly specialised nature, since it was his function
to ascertain and supply the exact requirements of individual manufacturers.
The manufacturer was selling in a highly competitive market, and his
success often depended on the individual qualities of his product, which
in turn depended very largely on suitable blends of wool being readily
available. He had virtually the whole world market to draw on for his
supplies of raw material, and his demands on the merchant were therefore
of an exacting nature.

22. The grading of fleeces by (/;) and (c) (as distinct from the further sorting
and processing also carried out by (c) ) was itself of considerable complexity.
Owing to the large number of different breeds, and the variation between
fleeces of the same breed, there were as many as 400 established grades of
home-grown wool before the war, and even the simplification carried out under
war-time control has not reduced this number below 250.

23. In 1939 there were 153 merchant firms in England and Wales operating
as in (a) above, i.e. they resold to other merchants, but did no grading
themselves, and 126 under (b) and (c), i.e. merchants who undertook the
grading and in many cases also the further processing of wool. In addition
many merchants employed agents to collect on their behalf from producers.
The number of these agents, who, as a rule, combined wool collection with
other lines of business, was not far short of 1,000. In Scotland where, owing
to its greater uniformity, possibly 75 per cent, of the total can be sold to
manufacturers in the ungraded state, there were 31 merchants operating in
1939. Here also the merchants employed many collecting agents.

24. Apart from the sales made by producer-co-operative societies and at
country wool auctions, as described below, the conditions favouring direct
sales by producers to manufacturers were, the existence of large flocks carrying
a uniform type of fleece which could be sold to the manufacturer in bulk, and
mills that could handle relatively small lots of wool. Scottish producers not
infrequently handed over their wool to merchants for sale on a commission
basis, either direct to manufacturers or through auctions held by Scottish
brokers.

25. At the outbreak of war there were four producer-co-operative wool
marketing societies in England, handling approximately 5 per cent, of the
English clip, and one in Scotland handling about 10 per cent, of the Scottish
clip. There was no such society in Wales, and only a very small quantity of
Welsh wool was handled by the English and Scottish societies. The English
societies arranged for the collection of their members' wool and employed
experts to grade it. Two of them also employed brokers to sell the graded
wool at the London Wool Auctions where it took its place alongside imported
wools and was purchased by manufacturers or by merchants. The other two
sold by private treaty direct to topmakers and to textile manufacturers.

26. The Scottish society received wool from members and non-members and
sold direct to manufacturers at home and abroad. The number of .breeds was

10

small and the individual clips were fairly uniform. The society classed each
producer's clip as a whole and paid him accordingly. They then further
graded and merchanted the wool according to the requirements of the
manufacturers.

27. In certain parts of the country, notably in Wales, the Midlands and the
South of England, where fleeces show a very considerable variety in size, type
and quality, it was the practice of some producers to sell their wool by auction.
The principal advantage of sale by auction appears to have been that it
provided an opportunity for speciality buyers, both merchants and manu-
facturers, to inspect a large number of clips of considerable variety, and to
select those lots best suited to their particular requirements. No figures are
available to show the extent of this country auction trade but it was local,
and we understand covered only a small part of the total clip.

28. In Scotland there were five wool auctions, three of which were organised
by wool brokers and two by livestock auctioneers. The auction method of
sale was not generally employed for the Blackface clip, which had a well-defined
market.

Skin Wool

29. Skin wool is wool removed from sheep-skins. The process is part of
the industry of fellmongering and takes place subsequent to slaughtering and
when the carcase has passed out of the hands of the flock-master. The woolled
skins were, before the war, purchased by fellmongers either direct from
slaughterhouses or through auctions, and the wool removed from them was
sold either to merchants specialising in skin wool or direct to manufacturers.
The trade was somewhat seasonal but this was largely offset by the fact that
in many cases the fellmongers also carried on business as tanners, leather
dressers, etc. Skin wool amounted to about 30 per cent, of the pre-war total
of home-produced wool, and to a large extent was comparable to, and
competitive with, fleece wool.

Prices paid to producers

30. The price a producer received for his clip was, in general, based on the
value put on it by the merchant or manufacturer, according to quality, but
on a level determined by world prices. In purchasing from individual producers
the buyer, however, often found it impossible to differentiate in price between
one clip and another in the same district to the full extent warranted, mainly
because of the risk of giving offence to producers and losing business to a
competitor. The English co-operative societies graded their members' wool
and paid them according to the price realised for the different grades. We
understand that the Scottish society originally intended to adopt a similar
procedure but eventually fell in with the practice generally followed by the
Scottish merchants.

31. Where wool is an important source of income, as in the case of the large
hill sheep farmer, producers for the most part exercise care in the production
and handling of their clip, so as to obtain the best possible return for it. In
other cases, however, the income derived from wool is reduced, through lack
of care in production, in shearing, in storage, and in the general get-up of the
clip for market. This apparently is due to some extent to the belief that the
extra cost and trouble involved in a more careful presentation of the wool
would not be sufficiently reflected in the price offered by the buyer. There
is no doubt, however, that for a great number of producers wool is only a
sideline and that this is the underlying reason for their lack of care in dealing
with it. The use of " bloom " dips is an example. Although well aware that

11

some of these dips permanently stain the wool and so lessen its value, producers
are using them to an increasing extent to " improve " the appearance of the
sheep when offered for sale, and thus inflate their price as livestock.

III. WAR-TIME METHODS OF MARKETING
Fleece Wool

32. During each of the war years the wool clip of the United Kingdom has
been requisitioned by the Minister of Supply, the task of collecting it having
rested with the Wool Control. The procedure adopted by the Control for
this purpose is based on pre-war practice.

33. The actual collection is entrusted to qualified merchants of pre-war
standing, each firm being " authorised " by the Control to collect from
specified growers. Generally, the grower is linked with the merchant who
purchased his wool in normal years, but some changes have been necessary,
e.g., where maintenance of the pre-war connection would have involved
unnecessary transport. The grower is directed by the Control to consign his
clip to the merchant, by road if the warehouse is within reasonable distance,
otherwise by rail. The cost of rail transport is borne by the merchant but
delivery to railway station or delivery to merchant by road is at the grower's
expense.

34. In England and Wales the wool is valued, on arrival at the warehouse,
by the merchant, who notifies the grower of the result. If the latter is
satisfied that the price offered is fair and reasonable he receives payment from
the merchant, who is reimbursed by the Control. If not satisfied the grower
can appeal for a further valuation by an independent tribunal established by
the Control, which may increase or reduce the price proposed. Notification
of his desire for a further valuation must be given by the grower within ten
days. In Scotland the procedure differs in that the wool is valued not by the
merchants but by experts directly employed by the Control. As in England
and Wales there is an independent tribunal for hearing appeals made by
dissatisfied growers.

35. When purchase of the wool from the grower has been completed the
merchant grades it according to standards prescribed by the Control (these
number about 250 and in general are based on pre-war custom) and stores
the graded wool until instructions for disposal are given by the Control.

36. For his services the merchant receives a commission which varies
according to the weight of the individual fleeces handled. This commission
covers the cost of providing the bags or sheets in which the wool is packed,
rail transport to the warehouse, storage of the wool while in warehouse, interest
on the capital required to finance payments to growers, and an allowance
calculated to give the merchant a reasonable return for the work and specialised
knowledge expended in valuing and grading and for his services generally.

Skin Wool

37. During the war period the slaughter of sheep for meat has been under the
control of the Ministry of Food. Early in 1940 the Wool Control, by arrange-
ment with that Ministry, assumed responsibility for the marketing of all woolled
skins. The skins are collected from the slaughterhouses and distributed
amongst fellmongers on a basis which takes into account the handling capacity
of the fellmonger and also economy in the use of transport.

38. The fellmonger removes the wool from the skin or " pelt " as it is termed
and where necessary also pickles the pelt to prevent deterioration. The wool,
after being graded and valued, is taken into the general stocks of the Wool

12

Control until such time as it is sold to the manufacturer of wool textiles. The
net proceeds of the sale of wool are paid by the Wool Control to the Ministry
of Food.

39. The fellmongers are remunerated on a commission basis, the rates of
commission varying according to the type of skin and seasonal differences
in the length of wool. At the commencement of these arrangements there
were more than 100 individual fellmongering firms. As a result of the
centralisation necessitated by war-time conditions the number has been
reduced by approximately 50 per cent.

War-time Prices

40. Unlike pre-war, when the prices received by the wool grower rose and
fell in accordance with world market prices, war-time prices have been main-
tained at fixed levels in accordance with national policy. Since 1940 home
wool prices have been maintained at levels above those of the corresponding
Dominion wools.

41. In the early stages of the war H.M. Government entered into agreements
with Australia, New Zealand, South Africa and the Falkland Islands for the
purchase of the wool clips of those territories for the duration of the war plus
one clip after. The price initially paid represented an average increase of
30 per cent, over pre-war, but as from ist July, 1942 a further increase of 15 per
cent, was agreed, making 49^ per cent, in all. In the case of the home clip
the price was fixed in 1940 at an average of about 45 per cent, above the prices
ruling in June/July, 1939, for all wool except Blackface and similar types,
and for these the increase was of the order of 65 per cent. For the 1941 clip
there was a further increase of 15 per cent, and for the 1942 clip a still further
addition of about 13 per cent, on the 1941 level. Save for a very few minor
adjustments prices have since remained at the 1942 level. The war-time
increment in prices for home wool has therefore been somewhere between
115 per cent, and 120 per cent, for Blackface and other hill types, and about
85 per cent, for the remainder.

42. War-time control has of necessity curtailed the freedom of action of the
producer, who is now tied to a particular buyer, though usually the one to whom
he sold voluntarily before the war. The producer has, however, an assured
outlet, a guaranteed level of prices, and a right of appeal to an independent
tribunal should he be dissatisfied with the merchant's valuation of his clip.
Every producer is now paid on the result of an all-in valuation, a policy which
may be deprecated by the small number who previously received payment
according to grade. In general, however, the war-time arrangement has not
radically changed the normal mcrchanting procedure.

IV. A REVIEW OF THE EVIDENCE
Producers

43. The evidence submitted to us by producer organisations was almost
universally critical of pre-war marketing arrangements. The producer-co-
operative societies favoured an extension of their own procedure but the usual
proposals were for a marketing scheme under the Agricultural Marketing Acts.

44. It appears, however, that in the case of many of the most important
agricultural organisations their main reason for advocating a marketing scheme
is the belief that given such a scheme wool producers would be in a much stronger
position to seek Government aid for their industry by direct financial assistance
by the application of a levy-subsidy, or by the regulation of imports. Indeed,

13

some bodies said emphatically that an assurance of Government assistanc
along one or other of these lines would be a condition precedent to thei
support of a scheme.

45. The advocates of a marketing scheme, on its merits as such, believe tha
a marketing board could remedy certain defects which they see in the pre-wa
system. In particular, they feel it could effect economies in the collectioi
and handling of the wool, improve the methods of selling, and so providi
better prices to the producers. In their view there was unnecessary expensi
in the collection of wool, especially from small growers ; too many canvasser:
were employed, and the number of firms engaged was much in excess of what wa:
necessary. They also considered that insufficient discrimination in price wa:
made between well and poorly got up clips, and that the practice of giving ai
all-in price for a clip comprising different breeds did not in fact provide th<
grower with a full and proper return for his wool. They also pointed to th<
lack of market information on wool prices, particularly in the case of the smal
grower, and considered that growers were therefore very much at the mercj
of the merchants, who were better informed.

46. They suggested that a board should be able to arrange for bulk transport
and avoid unnecessary and wasteful haulage by delivering the wool to ware-
houses conveniently near the place of manufacture. No canvassers would b(
required since the board would be the sole buyer and all profits would be reflectec
in the grower's price instead of accruing as at present to the merchants
A board could also adopt a basis of payment which would secure a propel
return to the efficient grower and appropriately lower prices for inferior wools
In this way the growers would be encouraged to exercise greater care in the
preparation of their wool for market. In particular it would be possible tc
discourage the practice of using dips and branding materials which per-
manently discolour the wools and so lessen their value for manufacturing pur-
poses. In addition they anticipated that a board would furnish to its
constituent members information on market conditions and the trend ol
wool prices, and generally keep producers informed on matters of common
interest.

47. It was also argued that on the selling side a board which had control
of all home wool would be in a stronger position to steady the level of wool
prices and so go some way towards evening out the fluctuations in price which
were common to the wool markets of pre-war days. A single seller, either in
the home or overseas market, it was maintained, would be better able to hold
prices and prevent weak selling on a falling market.

48. Producer organisations in England, Scotland and Wales respectively
hold divergent views on the question of whether there should be one board
for the three countries or a separate board for each. Producer organisations
in England and Wales incline to the view that one board for Great Britain
would be best. In the event of this not being possible, however, the Welsh
proposal was for a Welsh scheme, working in close co-operation with schemes
in the other two countries, especially Scotland. The Scottish organisation
favoured a Scottish scheme but working in* close collaboration with any
others.

49. The advocates of a marketing scheme have produced no estimates 'of
the initial expense involved in its establishment, the amount of working
capital required, or of the cost of operating such a scheme. Various estimates
have been made of the financial benefit which would accrue to growers. The
view advanced was that savings might amount to about id. per Ib.

Merchants

50. Merchants considered that a scheme under the Agricultural Marketing
Acts would add to the cost of marketing without achieving any compensating
advantages. They contended that their normal methods of merchanting the
United Kingdom wool clip were efficient and economically carried out, and
that the services they rendered as intermediaries between the producer and
the user were on the whole reasonably satisfactory to both parties. They
emphasised that as practical business men engaged in a highly competitive
trade they could not afford unnecessary expenditure either in method or on
staff. They stressed the point that the marketing of home-grown wool is a
seasonal trade and that a board established solely for the purpose of handling
this trade would inevitably incur a higher rate of overhead cost than the normal
merchant firms, many of whom were also engaged in marketing imported wool,
skin wool and various agricultural commodities. Some of these firms carried
out further processes such as topmaking.

51. As regards the question of payment to the wool grower, the merchants
said that the keen competition which existed between the various firms ensured
that the grower did in fact receive full market value for his wool. They said
that whenever possible they did endeavour to discriminate in favour of the
efficient grower but agreed that fear of losing trade to a competitor not in-
frequently forced a merchant to over- value inferior clips.

52. They were strongly in favour of any steps that can be taken to end the
practice of growers using colouring matter which stains or otherwise injures
the wool. Their proposed solution of this problem is the introduction of
legislation prohibiting the manufacture and use of such matter. Over a period
of years they have endeavoured by the issue of leaflets and by other means to
educate producers on the best means of presenting wool to the market, the errors
to be avoided and the defects to be remedied, but they did not feel that their
efforts in this direction have met with any great success. They also pointed
to the fact that research into a wide range of problems connected with the
wool industry as a whole has been undertaken by the Wool Industries Research
Association from funds to which wool merchants are substantial subscribers.

53. Payment to individual producers on a graded basis is regarded by the
merchants as impracticable, mainly by reason of the cost. Grading each clip
and giving detailed returns to the individual growers would involve much
extra clerical work, increased storage accommodation, and other additional
expense, all of which would fall mainly on the grower.

54. The merchants believe that their specialised knowledge of the particular
needs of individual users both here and overseas, resulting from long
established business relations, forms a vital link in the chain of wool marketing
and helps to secure the best market for British wool to the ultimate benefit
of the grower. They contend that competition between firms is more likely
to maintain this essential service than the monopoly selling organisation
proposed by the advocates of a board. They are very doubtful whether a
board could find as good markets, or conduct the business at as low a cost as
they do and they contend that skilled staff would be difficult to secure.

Manufacturers

55. Evidence submitted to us on behalf of users covers all sections of the
wool textile industry. This evidence favours adherence to the pre-war system
of marketing. The manufacturers state that they are not influenced in their
view by any feeling of opposition or antagonism to a marketing scheme as
such, but rather that they are not at all convinced that a board could provide
the variety and efficiency of services to which they have been accustomed.

As a result of expert knowledge acquired over very many years the merchant
with whom they normally deal have come to know their individual require
ments, and have catered for them accordingly. The manufacturers conside
it doubtful whether a board, dealing only in home-grown wool, could offer th
range of types they require. Moreover, they feel that at a time when th
change over from war to peace-time conditions is in progress and when ever
effort must be directed towards the recovery and expansion of the expor
trade, tried methods of which the trade has had long experience should nc
be lightly discarded.

56. In voicing their objections to a marketing scheme the manufacturer
stated that it was not their policy to decry the merits of home-grown woo
or to seek to buy it at depressed prices. Home-grown wool had its place i
the market, provided it was presented in the form suitable to the needs of th
various users, and at a price which could meet competition. In this connectio
they stressed most strongly the fact that the great bulk of the wool whic
they use has to be imported, and that it is the world market which determine
the price level which they will obtain for the goods which they export. The
could see no sound basis for the belief of some producers that a board controllin
the marketing of the relatively small home clip could exercise any determinin
influence on wool prices generally.

57. The manufacturers are of opinion, however, that certain improvement
might be made in the pre-war system. For example, they advocate the exter
sion of sales by auction, provided they are conducted by those with an intimat
knowledge of the trade and in premises which are suitable. They are somewha
critical of the space and lighting at some of the country wool auctions i
England. Improvements could be effected by offering in bulk lots, in th
" get-up " of the wool and by better handling generally. They condemn th
use of dips and marking materials which stain or otherwise damage the woo
and urge that their use should be prohibited. The manufacturers are of opinio
that attention to these matters would enhance the reputation of British woe
but that they would not in themselves justify the establishment of a marketin
board.

Fellmongers

58. Skin wool, as has been said, represents about 30 per cent, of the tote
wool produced in Great Britain, and is therefore of considerable importanc
in relation to a wool marketing scheme. This is appreciated by the advocate
of a marketing scheme who are anxious that skin wool also should be include
in the scope of their proposals.

59. The fellmongers' associations maintain that fleece wool and skin woe
are two separate products and that although sheep farmers, as the producer
of fleece wool, may decide that a marketing scheme is desirable for thei
product, such a scheme should not embrace skin wool, of which they, th
fellmongers, are the actual producers. They anticipate that, in the event c
skin wool being included, they would find themselves outvoted on the initic
poll and their product controlled, notwithstanding that, as a body, they ar
strongly opposed to the establishment of a marketing scheme for skin woo
They contend that a board could not possibly effect economies in the marketin
of their product, and that it would in fact be an additional expens
superimposed on the existing structure.

60. The fellmongers' associations argue that a board would not have at it
disposal the expert knowledge and skill which their members, from their Ion
experience in the trade, already possess. They assume therefore that a boar

would be compelled to seek their assistance in the skilled process of fell-
mongering and that, even if it took over the fellmongered wool, it would,
because of its inexperience, be at a great disadvantage in finding the best market
for a product that not only includes many different types derived from a
variety of breeds but also varies according to the season, since sheep are
slaughtered throughout the year without regard to the condition of the fleece.

6r. They assume that a board would adopt one of two alternatives. It
might itself assume responsibility for processing the skins, for which purpose
it would require the services of those at present employed in the trade. This
course would, in their opinion, entail heavy capital expenditure on premises
and equipment, etc., without any compensating advantages to sheep owners.

62. The other alternative would be an arrangement by which existing
firms would carry out the processing as agents for the board, the latter under-
taking the marketing of the wool. The associations maintain that such an
arrangement could not possibly be more economical than the pre-war procedure
since the board's overheads would be an added expense.

63. The fellmongers' attitude towards a marketing scheme cannot be
ignored. If skin wool were to be included in the definition of " regulated
product " in any scheme submitted for the marketing of wool under the
Agricultural Marketing Acts, it follows that fellmongers, as the producers of
skin wool, would have the same standing as other producers when such a
scheme was put to the vote. On a quantitative basis the fellmongers represent
nearly a third of the total of home-grown wool. Their vote would therefore be a
powerful one, since a scheme under the Marketing Acts cannot be established
without a two-thirds majority both in numbers of producers and in quantity
of wool, and it is not every sheep farmer who would support a scheme. The
lellmongers, as has been said, have indicated their intention of voting against
such a scheme.

64. If, on the other hand, skin wool is not included as part of the regulated
product in a marketing scheme, the prospects of success would be diminished
by the fact that nearly a third of the supplies of home-grown wool would be
outside its control.

V. MARKETING ACT PROCEDURE

65. The Agricultural Marketing Acts enable schemes to be made for
regulating the marketing of agricultural products by the producers thereof.
Marketing is a wide term as used in the Acts and covers not only actual sale
but also grading, packing, storing, adapting for sale, insuring, advertising
and transporting the product. In the case of (i) a trading scheme, any or all
of these operations may be carried out by a marketing board, either direct or
through agents. In the case of (ii) a regulatory scheme, producers may be
required to carry out any or all of the operations mentioned, and the scheme
may also prescribe the quantity of the product, or of any description thereof
that may be sold, the terms on which, the price at which, and the persons to
or through the agency of whom, it may be sold. Accordingly, the powers
that may be taken in a scheme are of two kinds, depending on whether the
scheme is to be mainly a trading or a regulatory scheme.

66. It is a corollary of the trading powers of a board that the registered
producers shall sell the product or a specified quantity of it only to or through
the agency of the board. In the event of more than one board being estab-
lished in Great Britain, provision could be made for inter-trading between the
different boards.

17

67. A wool marketing board which was purely regulatory in its functions
would have the powers referred to under (ii). A regulatory scheme, in virtue
of its control of the home product, would put its board in much the same
position to act on behalf of wool growers vis-a-vis merchants and manufacturers
as a trading board carrying out a pooling scheme would occupy. In both cases,
however, any price " fixing " which the board might impose on the grower
(and it is only the price at which the grower may sell in respect of which a
board has statutory powers) could in turn only be based on a price negotiated
with representatives of merchants and manufacturers, as neither type ot -board,
whatever its policy might be so far as the intermediary interests were concerned,
would be in a position to eliminate the manufacturer.

68. It would be possible to prepare a wool marketing scheme either for Great
Britain, or for England, or Scotland, or Wales, and to endow a board with powers
which would enable it to function in a regulating capacity in respect of part of
the product, and in a trading capacity in respect of the remainder. To put the
matter another way, a wool board might, as in the case of the Milk Boards,
merely control the sale of some of the product without having physical possession
of it, and itself purchase, for the purpose of resale or processing, the remainder
of the product.

69. The idea of a wool marketing board purchasing, and itself actually
handling, the whole of the wool produced in its area, in order to sell it to
manufacturers either through merchants or direct, would hardly be practicable
at any rate in its early stages. To enable it to do this it would have to
provide working capital, storage, equipment, containers, a headquarters staff,
and a selling organisation to serve both the home and overseas markets. This
would be a formidable undertaking even if the board had the whole-hearted
co-operation of all sections of the industry which, in the nature of things,
would be too much to expect. Another point that has to be borne in mind
in considering the establishment of a trading scheme is that the board would
find itself operating a large and complicated organisation from the very start
of its existence, with a comparatively limited space of time in which to make
all its arrangements, whereas large established concerns have arrived at their
present organisation and efficiency by a gradual process of development.

70. It is probably, unnecessary, however, to examine in greater detail the
possibilities of a board designed to undertake the physical handling of the
whole of the supply seeing that there would be no point in a board providing
facilities of its own for this purpose if, by agreement with existing interests,
it could arrange that they would handle the wool as efficiently and economically
as if the board undertook that function itself. In all probability, therefore,
while a wool marketing scheme would, as a precaution, have to endow the
board with all the powers which could be taken from the parent Acts, the
board would exercise only those powers which experience indicated were really
necessary, and would co-operate with existing intermediaries so long as these
interests were prepared to make their services available to the board on
reasonable terms and to carry out their functions in a manner which the
board and the manufacturers agreed best served the interests ot the industry
as a whole.

71. A board armed with powers to regulate the marketing of wool would
be in a stronger position in negotiating with merchants and manufacturers
than would individual growers, but that does not mean that the board could
fix a price for the produce of its members which was out of accord with the
price at which a comparable type of wool was available from overseas
sources.

iu

72. The price which a board could pay the grower for wool under a marketing
scheme would be higher than the price which growers would have received if
there had been no scheme, only to the extent that (a) the wool was presented
to the manufacturers either directly or indirectly in a manner which made it
worth more to them than it would otherwise have been ; (b) the board
exercised a shrewder judgment in its selling policy than would have been
exercised under a system of individual marketing, and (c) the board was able
to effect economies in such matters as collection, storage, and other charges.

73. It is worth while to recall the procedure under which alone the wide
powers of the Marketing Acts can be exercised. A marketing scheme can be
submitted to the Minister " by any persons who satisfy him that they are
substantially representative of the persons who produce that product in the
area to which the scheme is applicable ". It is not necessary that the promoters
must show that they are a majority of the producers. After the submission
of a scheme there follows a period for the lodging of objections, and for the
consideration of the objections by the Minister and the promoters. Unless
the Minister, with the consent of the promoters, is able to modify the scheme
in such a way as to meet all substantial objections, he must arrange for a
Public Enquiry. This may lead to further modifications of the scheme.
If finally the Minister is satisfied that the scheme will conduce to the more
efficient production and marketing of the product, he may, after consultation
with the Board of Trade, lay a draft of the scheme before both Houses of
Parliament. If both Houses approve the scheme it is brought into operation,,
and the persons named in the scheme as the members of the board are then
able to function as a provisional board for the purpose of arranging the initial
poll of producers.

74. The poll of producers is taken by post after the preparation of a register,
and producers vote on the question of whether or not the scheme which is
now in force shall remain in force. The essential point to note is that a scheme
remains in force only if there have voted in its favour (a) not less than two-thirds
of the total number of registered producers voting on the poll, and (b) registered
producers who are capable of producing not less than two-thirds of the quantity
of the regulated product which all the registered producers voting on the poll
are capable of producing. If it is proved to the satisfaction of the Minister
that the number of producers voting on the initial poll was less than half the
total number of producers, he has no alternative but to make an Order revoking
that particular scheme,

75. The Committee on Hill Sheep Farming in Scotland contemplated in
their Report that the board would become the buyer of all the wool which its
registered producers had for sale, making a payment to account after the wool
had been graded, with a final settlement at the end of the season. The price
which the grower would ultimately Deceive would be a pool price according to
grade, less expenses. This, as the Committee explained, would necessitate
the board taking over all unsold wool at the end of the season at a price which
would necessarily be an estimate of what it would eventually realise. The
Committee apparently contemplated that the board would be able to agree
with brokers and merchants regarding the use of their services as graders,
storers and forwarding agents, the board assuming all merchanting risks.

76. Such a scheme may be possible in Scotland where merchants do far less
grading and sorting than their counterparts in England, but obviously the
question of whether merchants and brokers would co-operate in this type of
scheme would laregly depend on the rate of commission which the board was
prepared to allow them for their services.

77- Any far-reaching scheme established under the Agricultural Marketing
Acts, which commenced operations at the end of the war-time control, would
be bound to have a precarious existence, especially in the early years. In all
probability wool prices would be on the decline. Growers would be disposed
to compare the prices paid by their board with those received under the Wool
Control and to blame the board for any reduction that might occur. The board
could claim that but for the marketing scheme prices would have been still
lower, but not every grower is so firmly convinced of the soundness of collective
marketing as to be satisfied that in the long run it is bound to be better than
individual selling. Many would judge the scheme according to the prices it
paid and by that criterion alone. Two or three years of declining prices would
prove a severe test of the growers' faith in organised marketing.

78. Much would depend on the attitude of the brokers and merchants.
If they found that it suited them better to have a board with which they
could co-operate than to revert to a system of individual buying and selling,
the scheme would have a fair chance of surviving the difficult initial period.
But the probability is that their co-operation would only be secured at a price,
and the board might find itself under the necessity of paying more than was
justifiable for the services of these intermediaries.

79. Reference has already been made to the amount of support that must
be forthcoming from growers on the initial poll before a marketing scheme
can be brought into operation, and a point which has greatly concerned us is
whether the promoters of a scheme whatever form it might take could be
reasonably sure of getting an adequate measure of support, especially having
regard to the fact that as many as 42,000 or 46 per cent, of the total number of
growers in Great Britain have clips of 40 fleeces or less. (See Table on page 6.)

80. Wool is 3.n important item in the income of the large flockmasters but
even for them it is in no case the main item of income. The proceeds from the
sale of sheep are in every case greater than those from the sale of wool. In
the case of the great majority of sheep owners, however, the revenue from wool
is of minor importance. Even on the assumption that a wool marketing scheme
could improve the return to the producer by id. per lb., the benefit to the grower
would be about 73. bd. per annum if he had a clip of twenty fleeces, about i
if he had a clip of fifty fleeces, and about 4 if he had a clip of two hundred
fleeces. The farmer who had as many as one thousand fleeces (and farmers
with clips of this size represent only a very small proportion of the total
number of sheep owners) would benefit by less than 20 per annum. On this
basis the majority of growers would benefit to an extent not exceeding 2
per annum and in the case of many thousands the advantage would be a mere
matter of shillings per annum. Accordingly, it is probable that the very large
number of small growers would not have much interest in a wool marketing
scheme and this being so it is probable that many would either refrain from
voting or would vote against the scheme. Farmers have to foresee a substantial
benefit from organised marketing before they are prepared to undertake a
radical departure from existing practice.

VI. CONCLUSIONS

81. Producer organisations in Great Britain arc critical of the pre-war
marketing arrangements. They are, however, by no means unanimous as
to the steps which should be taken by way of remedy. Producer organisations
in Scotland and in Wales have expressed themselves in general as strongly
in favour of a wool marketing scheme or schemes. They are ready to prepare
separate schemes for their respective countries, but in the case of the Welsh
producers only if a Great Britain scheme cannot be formulated. The National

20

Farmers' Union, on the other hand, would only favour a scheme for England
or a joint scheme for Great Britain if it formed part of comprehensive measures
involving Government assistance to the industry, such as the regulation of
imports and/or a levy subsidy. There is no definite consensus of opinion in
favour of a Great Britain scheme.

82. The possibility of regional schemes has next to be considered. It is
open for producers in Scotland and Wales or any part of England, should they
so desire, to proceed with the formulation either of a regional scheme or of
schemes for the marketing of particular types of wool. From views expressed
to us it is very doubtful whether the required majority of producers in any
part of Great Britain would lend their support to a scheme which would give
them no guarantee of prices that they would regard as remunerative, simply
for the benefit of such economies in the actual processes of marketing as might
result from it.

83. The special position of the fellmonger has also to be borne in mind. As
has been pointed out, the fellmongers' production of skin wool formed, in pre-war
years, about a third of the total of home-produced wool. Thus on a quanti-
tative basis they would have a considerable voting strength. Their organisa-
tions have indicated to us that they consider that their members would not vote
in favour of a wool marketing scheme under the Agricultural Marketing Acts.

84. We cannot ignore the possibility of a lower level of world wool prices
in the near future and the difficulties which this would entail for a newly
formed marketing board. Savings which might be effected by a board would
be obscured by any general downward move in wool prices and this would
be likely to cause producers to lose confidence in the board and to doubt its
usefulness. The position of the board in such circumstances would be insecure.
A scheme under the Marketing Acts must be revoked if, on a poll, a bare majority
of producers vote in favour of its revocation.

85. These considerations apply particularly to the immediate post-war
period. But even in the longer view, though we do not wish to pre-judge
the future, our present enquiry leads us to doubt whether there is sufficient
scope in the possible saving of expenses and merchants' profits to justify a
marketing scheme for home-grown wool.

86. The hope that the Government would afford assistance in the way of
a subsidy or otherwise if the growers undertook this new departure involves
questions of general policy which are outside our terms of reference. In any
case we consider it necessary that a wool marketing scheme should be considered
on its merits. The desirability of assistance to the sheep industry and the
channel through which such assistance should be given are matters which
should be weighed, and decided, upon a consideration of the industry as a
whole.

87. We therefore do not recommend the promotion of a wool
marketing scheme under the Agricultural Marketing Acts.

88. A wool marketing scheme would not in itself afford stability, or a
guarantee of prices, to the wool producers of this country. A wool marketing
scheme could not possibly " take over " from the present Wool Control, since
the Control possesses powers far transcending those of any possible wool
marketing board. There is no doubt, however, that the wool produceis are
very apprehensive as to their future, especially having regard to the great
accumulation of stocks now overhanging the market, and we feel convinced
that the necessity exists for an organisation in which their interests will be
represented in the years ahead. This organisation should provide the

21

machinery for close collaboration with the merchants, and the manufacturers,
who are the users of the product, and on whose willing co-operaticn the hope
for stability and progress in the home industry greatly depends.

89. There is undoubtedly some foundation for the criticisms of the pre-war
methods of marketing wool. In the main these criticisms reflect the
producers' lack of confidence in the methods of the merchants. Producers
are conscious of their own ignorance of market values and in many cases have
a conviction that merchants did not sufficiently discriminate between good
and bad clips. This belief has produced in the minds of growers a feeling of
helplessness and a reluctance to improve their own methods, even where they
know these to be faulty. On the merchants' side there is the feeling that
growers are unable, or unwilling, to remedy faults in the production and
presentation of their clips, and that the growers do not fully appreciate the
difficulties which the merchants encounter in the disposal of their products
both in the home and overseas markets. The manuiacturers have expressed
genuine goodwill towards the home producer and a desire to pay him a fair
price for his product, even to the extent of giving him some definite preference,
but they in turn doubt whether the wool growers appreciate the extent to
which they, the manufacturers, are bound by world markets, both at home
and in the export trade, in both of which natural or synthetic substitutes for
British wool are available.

go. It appears to us that the removal of this lack of confidence is a prime
necessity for opening the way to the improvements which we feel are desirable.
We are convinced that this is possible, since we have encountered, during our
enquiry, much good feeling and a certain amount of common ground. The
frank discussion of problems which are clearly of common interest both to
buyer and seller is the first and most promising means of establishing mutual
understanding.

91. We accordingly recommend that a body, to be designated the
Joint Wool Council, should be brought into being for the purpose of
promoting good understanding and joint action between users and
growers, and also of acting as spokesman for the home wool industry
during the time when the transition from a war to a peace economy
is taking place.

92. The Joint Wool Council should represent the interests of the home wool
industry when the arrangements, quoted in paragraph 16 of our Report, are
being made for the orderly disposal of Dominion stocks and current clips.
These arrangements will be temporary, their duration depending on the time
required for the absorption of the accumulated wool stocks. The functions
of the Joint Wool Council will therefore, as we envisage them, have to be
both permanent and temporary.

93. The permanent functions we detail in paragraph 94. During the
temporary period, marked by the continuance of the Inter-Government Joint
Wool Organisation, the Joint Wool Council should be the body to keep under
review home wool production and consumption. It should provide, in respect
of home producers and in conjunction with the appropriate Departments,
such information as to output, prices, sales and stocks as may be needed by
the Inter-Government Joint Wool Organisation. In so far, as steps are taken
for the purchase and holding of clips of the other participating countries and
the maintenance of minimum prices for them, steps would have to be taken to
ensure not less favourable conditions for the United Kingdom producer. In this
connection there will arise the question of the differentials in price established
during the war in favour of the home producer. If some differential is to

be maintained, the co-operation of the Inter-Government Joint Wool
Organisation would be necessary. It some differential cannot be maintained
this no doubt would have to be taken into account in considering future
conditions for the home sheep industry, and in particular for the hill sheep
industry. But these are matters which would naturally be the responsibility
of the Government of the day, in the light of the position of the United
Kingdom sheep industry as a whole, and of any other measures being taken
to maintain it.

94. The main permanent functions of the Joint Wool Council should be :

(a) to collect information from producers, merchants and manufacturers
on such matters as output, prices, sales and stocks ;

(b) to provide producers with up-to-date intelligence on wool prices and
market trends ;

(c) to be available to act as arbiter on price disputes between producer
and merchant on the lines of the present appeal machinery established
under the Wool Control scheme ;

(d) to draw up and recommend standard methods of packing, and generally
to ensure the presentation of the clip to the market in its most convenient
and attractive form ;

(e) to draw up and recommend measures, including, if necessary, legislation
to eliminate the use of dips and marking materials that permanently damage
the wool and lower its market value ;

(/) to co-operate with Dominion and other wool growers' associations,
both here and overseas, in such matters as marketing methods, research
and publicity ;

(g) to consider ways and means by which the market for home wool,
and products manufactured therefrom may be developed and maintained.

95. The Council should be lepresentative of producers, merchants, and
manufacturers. The chairman should be an independent person selected
by the Government, and should be remunerated on a basis commensurate with
the time devoted to the task. We suggest that the Council should comprise
four representatives of the producers, two of the merchants, and two of the
manufacturers, these representatives to be appointed by the Government
from individuals nominated by the interests concerned. The Council should
set up a Scottish, a Welsh and one, or possibly more, English Sub-Committees
with power to co-opt, again from names submitted by the interests concerned,
up to a maximum of nine for each Sub-Committee.

96. During the temporary period the Council would be an essential part of
the general organisation. At a later stage the Council might be given certain
statutory powers such as those which would ensure the adoption of the methods
of appraisement, records, returns, etc., which might be agreed upon. For
instance, the continued use by producers of methods which result in a deprecia-
tion of the real value of their wool should be dealt with by a sharp differentiation
in price. In order to ensure the observance of such requirements it would
probably be necessary that the Council should eventually have further powers,
e.g. to license merchants.

97. If such arrangements were adopted those concerned could, with much
greater authority than at present, make representations to the Government
if there arose circumstances entirely outside their control, which deeply affected
the great sheep industry of this country. We hope that producers merchants
and manufacturers will voluntarily agree to set up such a Council as we have
described and will adopt its recommendations. It should go far towards

building up a greater measure of confidence and co-operation between buyer
and seller and this, we feel, rather than the immediate creation of more elabo-
rate machinery, is the first step required to safeguard the prospects of the home
wool producing industry.

98. We desire to record our acknowledgments to our Secretary and his two
Assistants. Upon Mr. Clarke has fallen the main burden, and his intimate
knowledge of the working of the trade has been of the greatest service to us.

(Signed) WALTER E. ELLIOT (Chairman}.
J, BOWMAN.
T. G. HENDERSON.
H. G. HOWITT.

A. H. CLARKE (Secretary}. ijth October, 1945.

(47383) Wt. 3J9222I6KA 1/46 D.L. G. 372

LONDON
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