The latest wool auction held in Bradford by the British Wool Marketing Board (BWMB) was yet another lacklustre affair with only 60 per cent of the offering sold.

The BWMB (the Board) pays producers for their annual wool harvest, or clip as we call it, in a split payment, that comprises an advance, part-payment for the wool delivered and a final payment for the previous year's clip after it has been sold. The average wool value for the 2015 clip, that was eventually calculated last year, was 85p per kg after all costs and excluding VAT. Little wonder sheep farmers regard wool as a nuisance that has to be shorn for welfare reasons.

The Board, which is effectively a farmer-owned cooperative, has been through more turbulent times than those currently prevailing.

Armies used to go to war with wool tunics, overcoats and blankets, so wars often impacted on the wool trade, but none so much as the First World War which lead to the imposition of Wool Control by the Government in 1916. Under Wool Control farmers had to sell all their wool to approved merchants at prices set by government for the various types of wool. Wool Control ended six months after hostilities ceased.

Between the two wars, the bulk of British fleece wool was sold directly by growers to wool merchants, at a bargained price. There were also farmers' cooperative selling organisations that advanced farmers two-thirds of the value of their clip, graded the wool and sold it in due course, sharing the resultant proceeds, less expenses among their farmer members. Those co-ops, that operated in much the same way as the Board today, sold about 10 per cent of the Scottish clip and met with varying fortune.

Wool Control was reintroduced in 1939 as the nation once again went to war. During the war there was massive disruption of shipping from the Southern Hemisphere that led to the greatest accumulation of wool the world had ever seen. In the spring of 1945, representatives of the UK, Australia, New Zealand and South Africa met in London to discuss how to deal with those stocks alongside current clips. It was forecast that it would take twelve or thirteen years to dispose of those stocks, and the Joint Organisation, known as the JO was set up to regulate the disposal of the stockpile. As it turned out, there was massive demand for wool in Europe as houses were rebuilt that needed carpets, curtains and bedding. By the end of 1949, JO stocks were down to about 11 per cent of the original stock and the UK Government was preparing the way for the establishment of the BWMB.

Under the Wool Scheme, producers had to sell all their wool to the Board in return for Government guaranteed prices. At the same time the Board was being born in 1950 the global price for wool soared due to demand from the Americans preparing for war in Korea.

The windfall surpluses made on the sale of the 1950 clip as a result of the Korean War lasted for 6 years and consequently, the Wool Scheme was self-supporting and no Exchequer support was given. On the final disposal of the 1955 clip producers' own price support fund was virtually exhausted, so that any deficiency on the 1956 clip had to be met from the Exchequer. That system continued until the 1989 when an accumulated deficiency of about £14.5m was written off by Government so that the BWMB entered the 1990s with a "clean sheet". Government announced that the scheme was to end, and as it turned out, the 1992 clip was the last to be guaranteed.

That was just as well because a number of factors led to massive stockpiles overhanging the market to the extent that during February 1991 nearly all sales of wool in the Southern Hemisphere were suspended.

I was a director of the Board at that turbulent time and remember how in the 1992/93 season the Board sold nearly 65m kilos of wool (more than double the current annual British clip).

Trading out such massive stocks at comparatively low prices under the Guaranteed Price Mechanism resulted in a cumulative deficiency on the General Element of the Special Account of £89.5m at 30 April 1994. The following year that was written off by the Exchequer when, in terms of the financial agreement, the final stock from the 1992 clip was sold.