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Wool Woes Worry Ausie Sheep Farmers

Lower prices, drought, and other troubles change lifestyle of families depending on profits `off the sheep's back'

FENCES are falling down. Hired hands' cabins lie vacant. And some of the newly shorn sheep sliding down the chutes are too weak to get up right away when they hit the ground.

These are small indications of the crisis that has hit the wool industry here. Prosperity for Australian farmers has come "off the sheep's back." But a confluence of events - crashing global economies, drought, and industrial restructuring - has caused a major disruption in this way of life.

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Prices have fallen below the cost of production because of oversupply and weak demand. Australian wool's export income dropped from $6 billion in 1989 to $3.4 billion in 1992, as major importers like Eastern Europe and the former Soviet Union stopped buying. A huge stockpile racks up big storage bills.

"There's no new building going on, no new sheds going up," says Strath Sendall, over a big farm breakfast of lamb chops and fried tomatoes. "In the farming industry nobody's buying any new machinery. They're repairing their old stuff, which is affecting the manufacture of new machinery and retail selling of machinery."

He and his wife, Margaret, and their son, Roger, own a 300-acre station outside the tiny town of Wee Waa. With 10,000 sheep and 400 cattle, they are making adjustments to make ends meet.

They have put in a vegetable garden to save money on food. Five months ago, they had to let several higher-paid staff go and hired cheaper "jackaroos" - young men. Land prices fell

In hindsight, Mr. Strath says, the government's 1974 reserve-price scheme for wool was a mistake. "When it came in, we were all very happy about it," he says. "Everybody knew if they produced wool they'd get a return. So more people went into wool growing. The wool, on average, became inferior, because you knew you would get paid for inferior- type wool."

With the collapse in wool prices, land prices have also fallen dramatically. "People who want to sell, can't sell," Strath says. "So they've got to stay there and survive the best they can."

Mrs. Strath says she sees the effects of the crisis ripple throughout the community. Schools shrink. Older people who had expected to turn over farms to their children and retire find they have to keep working. Women of 50 and 60 now do the hard work that hired men used to do.

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Some areas of northwest New South Wales and central Queensland have also been hit by a year-long drought.

Sheep that once would have munched on grass that grew as tall as fences have to be fed purchased grain. The Australian Bureau of Agriculture and Resource Economics estimates the average wool producer lost $33,660 last year. Some farmers, unable to sell their property, are simply walking off the land. Huge stockpile created

Some blame government policies. Through its marketing authority, the Australian Wool Corporation (AWC), set a fixed floor price for wool in 1974 to smooth out fluctuations in the market. As prices skyrocketed in the late 1980s, the AWC raised the support price. Established farmers increased flocks, and others flooded into the industry.

When prices fell, the reserve price did not. The AWC bought up unsold wool, creating a huge stockpile. The support-price scheme was abandoned in February 1991, but the stockpile, now at 3.9 million bales, remains. Growers, whose taxes pay to maintain the stockpile, have been left holding the bag, so to speak.

Weaker producers are being shaken out of the industry, Strath says. Those left will produce better wool. In hindsight, "people will say that taking away the reserve price will benefit the Australian wool industry in the long term," he says, "but in the short term, we're in real trouble." Extra feeding deferred

The government recently announced an assistance plan for wool farmers. Adam Sevil, the Sendalls' neighbor, says without it, he would go under. Mr. Sevil, who is also in the midst of shearing his flock in a hot tin shed, says he, like many others, put off giving supplemental feed to his sheep, hoping that rain would come and revive pasture land.

[Recent weeks have brought some welcome rain to the re- gion.]

"I should have started feeding them about a month ago," he says, eyeing the scrawny lambs being shorn. "I've already started to feed them, but lambs, because they haven't fed for quite awhile, they'll take awhile to get going. And I'll lose the weak ones. It's better to get the wool off them now." Family farm `unviable'

Tommy Williams, the shearing contractor, scoops up freshly shorn wool and tosses it into various bins. "A couple of years ago we had two and three teams working," he says. "Last week, we had two days' work, and one of my teams was down."

Cathy and Wally Denyer, who live about 14 miles away, bought two adjoining properties for their son when he graduated from college. But interest rates shot up from 13 to 23 percent, and the family got in a financial hole. Interest rates are down now, but so are their savings. What's worse, the government has assessed their farm as "unviable."

"How can some bureaucrat in Canberra know who is viable just by reading numbers?" Mrs. Denyer protests, sitting on the veranda as the occasional car whizzes by on the road. "They need to look at the farm." Mr. and Mrs. Denyer say they will reapply to change their farm's designation.

There's a drought this year; there was a flood last year. The Denyers had to buy feed for their 5,000 sheep during both. Now they may have to sell their 100 head of cattle, wiping out breeding stock they've had for 25 years. "It's the unknown and the uncertainty that affects your everyday life," Mrs. Denyer says. "The women really seem to be depressed and down in the dumps. I think we can't all be sold up and made to go. My husband's now 53. He left school at 14 and so what could he do?"

Mr. Denyer is out fixing fences. He looks at his sheep, dots of white on the vast expanse of dry brown land. "These stock walking around are nearly worthless," he says. "We might get $2 a head for them, and we're spending that on them per month just to keep them alive. The outlook's not real good, but if we lose face and give up, well, the whole country goes down, too. Unless you've got people with a little faith and the will to put their back into it and have a go.... You just gotta keep going and hope it will turn around, that's all."

His wife adds: "You can't get shot for trying can you?"

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