You would have to have rocks in your head to produce wool at the current prices.

There were six principal events which brought down Australia's biggest industry. Four of them acts by government. Another a failure by government to act to remedy the damage done.

1. The Wool Marketing Act of 1987, which locked the Wool Corporation into a 12 month business plan starting July 1 each year. This, demanded by some growers, soon proved an unaffordable luxury. Prior to that time, management had been able to ride the flow of the market.

2. The unviable scheme of management imposed on the Wool Corporation by the government in May 1990. There was sufficient information in the newspapers the next day to show that that scheme could never work. It remains a mystery as to why it was not challenged. Where was the Opposition?

3. The Howard government's blind determination to dump the last of the stockpile, culminating in the bizarre constitution which they imposed on the WoolStock company. That was a sham privatisation. This was the rock that wool perished on.

4. The refusal of the government in 2003 to recognise or even comprehend the huge problem it had created for the trade with their artificial acute scarcity of product.

5. ABARE's outrageous price forecast for 2006, coming when the trade was attempting to get the price up to a viable level. In percentage terms, this was probably the most damaging of all.

6. AWI's exceedingly foolish response to the PETA problem, first in launching the court case, and then by entering into an agreement which gave PETA control over a large part of our industry management.

This problem is exacerbated by the locking in of many of our industry leaders to that agreement.

Condemnation of the floor price scheme is near universal, but quite unsound. The floor price scheme worked very well until that Act of Parliament locked it into a 12 month business plan. After this created major problems in 1989, the imposition by the Hawke government of that hopelessly unviable scheme of management bankrupted the system.

People talk endlessly about the law of supply and demand, but it appears to me that few people understand either supply or demand. The politicians managing the marketing of wool since 1989 certainly did not understand the difference between a mainstream commodity and a premium niche product. The people who made the decisions clearly believed that demand comes to us.

For wool in the modern market there will be but limited demand unless somebody builds and maintains it.

We had it. Our politicians destroyed it.

Since the Merino wool industry was deregulated, for good reason, wool production has been bumping down the stairs unabated, towards cottage industry status.

Today, real gross margins are at an historical low, so, naturally, production continues to collapse, aggravated by drought.

To remidy the industry's slide, there has to be a genuine look at a model of regulation that will be effective, understanding that it will be no more of a panacea than idealistic deregulation.

The long term solution needs a dynamic of regulation and review, which is always hard work and uncomfortable.

Nonsense, Ted! Always blame someone else. The reserve scheme worked well until greed took over. We all knew the prices were too high as the stockpile grew, but how many objected?

Woolgrowers were on the board as the stockpile grew. They agreed to the reserve prices and like the board at the time of the AWB fiasco they behaved like the three brass monkeys when the proverbial hit the fan.

The world population has doubled in just over 40 years, the cost of energy has more than tripled and the people of the world are wearing more synthetic fabrics in an attempt to keep warm. Huh!

The problem is that many under the age of 50 or so do not know anything about the 'features and benefits' of wool. They have been seduced away by a bigger and more powerful synthetic fibre industry.

At the same time we have allowed others to control the wool industry. First Japan, then Russia and now China.

Why? Because we just cannot be bothered doing anything more than we have done for more than a 100 years. Thirty or so years ago I was involved in market research that showed that the wool symbol was in the top 10 of most-recognised logos in the world. The world knew about wool. We, the wool growers, paid for the publicity campaigns Then they stopped.

Ask Coca-Cola what happened to their market share when they changed the flavour of Coke. The involvement of inexperienced woolgrowers in the management of the Merino wool industry has been nothing short of a disaster, ask any experienced marketer. A first class plane ticket does not a marketer make!

Do you know one of the golden rules of marketing Ted? 'As soon as you call your product a commodity, that is what it becomes'. We let 'Australian Merino Wool' be classified as a commodity and never raised a wimper.

All is not lost but my goodness, we need to get going and quickly.

Point taken about "others controlling our industry", Roger. But issues of comparative advantage must be considered.

Wool promotion is important, but not on its own. There needs to be a "basket of policies" approach and hard work...not a "basket case" approach.

The whole truth was ever too long a story. Few have the patience to tell it. None the patience to hear it.

There is no nonsense in what I said above. If Roger Crook thinks about it, there is not all that much conflict between what he says and what I said, save that:

1). Greed? No doubt there was a certain amount of greed and envy too in the demand for a 12 month business plan.

However, the floor price was not set by greed. It was set by a formula which followed the physical market. At first it was the legislated business plan which had to be presented to the government for approval, not greed, which locked in the floor price as the stockpile grew.

Then it was the scheme of management which the government imposed on the corporation until it was bankrupt. Never forget that a large part of the stockpile was accumulated under that scheme of management

2). Brass monkeys? From the time that the Wool Corporation requested, in the second half of 1989, that the government pass a change to the approved business plan, which the government declined to do, the corporation’s hands were tied. The management was in the hands of the government. It was the government, not the board, which bankrupted the Wool Corporation.

The management of the marketing of wool remained in the hands of the government until 2002.

Roger mentions the “bigger, more powerful synthetic fibre industry”. As I searched for explanations for the behaviour of the National and Liberal Parties and the NFF over the years, the most logical explanation has to be that they fell for the pitch of the synthetics salesmen. They forgot altogether that their job was to represent their constituency. They wrote wool off.

Much of the rest of Roger’s comments can be summed up in wool promotion.

The AWC was our means of ensuring that appropriate promotion was happening. Bankrupting the AWC destroyed that.

Coca-Cola? I didn’t see it, but when Southcorp cut the price of its premium labels with disastrous results, heads rolled. When the Howard government slashed the price of wool with disastrous results, nobody noticed.

As for golden rules. Smart promoters write the rules. If it is possible to sell two Cabbage Patch dolls into my house when I can see that they are no better than other dolls on the market at a third of the price, which happened, then it is possible to sell all the Merino wool we can possibly produce at a satisfactory price

Is there any point in going on with this? We own the sheep. We own the wool. We always have and we always will, until the last sheep walks up the gangplank, off on a holiday in the Middle East.

If the wool industry is stuffed, then it is the wool growers that have stuffed it. Will we never learn? The truth.

We asked the Government of the day to bankroll us and so came the Reserve Price Scheme. We said we had a plan. They agreed. Then the wool industry went into hock to the government. Then the wool industry went further into hock.

We kept on putting the price of wool up and when the buyers said no, the government bought it. (Bet GM wished they would do it for them just now). The business plan failed, Ted.

The Minister of the day, Kerin, understandably I think, became somewhat concerned at piles of wool the size of the pyramids and growing, that were technically owned by the government. Wool, it seemed, that nobody wanted.

When the wool industry became somewhat arrogant and recalcitrant in its dealing with him he took his cheque book and went home.

The interesting thing is that the majority of the wool that was sold out of the stockpile (by evil John Howard no less!) at a time when we had far more sheep than we have now. And we sold the 'fresh wool' of the year as well and all at a 'real' value greater than the price of wool just now.

Do the sums, Ted. You need the RBA figures on the CPI over time and wool prices over time, and I would think a calculator.

Let me know how you go. As for the board that Ted defends, read all of the above please...twice.

Some strong opinions here and some reasonable analysis of what got us to this point. Can I throw a bone in (from the Xmas turkey of course) and ask for some forward thinking.

What can we do to grow our fibre's market share? I often consider that falling production may not be all that bad in the current economic climate. For instance, wool prices would be nosediving to under an EMI of 600c/kg if we had sustained production levels at those of just five years ago. Thoughts?

Tony, it does not matter if the price of wool nosedives under 600c, as current pricing is unviable. The MI needs to be around the 2000c mark to put the industry back in the black.

With the dollar rising, it will be interesting to see where the market goes when it opens from holidays. This is one of the stupid actions of the wool industry. Why is'nt there computer based selling 24/7? Surely this would provide a better flow and access of wool to the trade, as well as getting rid of expensive showfloors and selling centres.

We hear pathetic bleatings from the trade that they must see and touch the wool. What a load of crap. The whole of the stockpile was sold off catologues with outone sample box.

Tony, this is only the start. The wool industry needs to realise that we are in the 21st century now.

On top of all that mentioned above, there's also the issue of having something new to market. Woolmark when funded properly did a pretty good job, but they were helped by having ongoing new innovations to sell. It's research that converted the scratchy, smelly when wet school jumpers of the 50s into high end products that were enhanced by wonderful sustained breeding programs that reduced the micronaire of the fibre.

It seems to me that research was stifled by AWI, firstly with an insistence on small, quick programs that delivered instant results for little cost (you really do get what you pay for) and later by no funding at all.

As CSIRO and Woolmark withered, AWI became bloated to the tune of 180 staff plus consultants in expensive rented digs in Sydney. The middlemen got fat on their woolgrower-funded gravy train by leaching funds from the researchers and marketers who could actually do something about selling wool.

I'm not saying things would have been all beer and skittles, but at least we would have had a chance to minimise the rot until the drought broke and economic conditions became better for luxury items worldwide.