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Is Australia still riding on the sheep's back?
After a history of heavy protection and back-door favours, Ray Evans examines the future of the Australian wool industry.
Breaking the Sheep's Back Charles Massy Penguin Books, 2011,436 pages
John Macarthur, supported by his wife Elizabeth, is rightly recognised as the father of Australia's merino wool industry-an industry which made the colony self-supporting and, even before the gold rushes of the 1850s, provided a standard of living which was more generous than the mother country could offer.
Two commodities, wool and whale oil, made Australia important for Britain, particularly during the Napoleonic wars. This conflict, culminating in the great battle at Waterloo on 18 June 1815, made it impossible for the English textile industry to obtain supplies of Spanish wool on which its prosperity was founded. So Australian wool, thanks to Macarthur's energy and entrepreneurship, was able, at least in part, to fill the gap and the high prices generated a flood of immigrant squatters and a huge increase in sheep numbers. Careful breeding (the GM of the 19th century) led to major increases in wool production per sheep. Of course, whale oil was subsequently made obsolete by the discovery and exploitation of kerosene.
There is an extensive literature on Australia's wool industry, but no book enlightens the reader more about the rise and fall, and perhaps the inevitable demise of this once great industry, than Charles Massy's recent book Breaking the Sheep's Back.
When I was a primary schoolboy in the immediate post-war period, everyone knew that Australia rode on the sheep's back. The size and value of the annual merino wool clip, more than any other economic indicator, determined whether Australia would enjoy prosperity or suffer balance of payments difficulties which required reducing imports and belt tightening generally.
In those days Australia produced 80 per cent of the world's wool supply. And the Korean wool boom, when wool prices reached 375 pence per pound-way beyond the fabled 'pound...