The massive income shortfall is a further sign of how much pressure the industry is under both on farm and throughout the processing pipeline.

• AWI hit with $5-10 million income shortfall.
• Review of all research, on farm and marketing projects.
• New board committed to finding mulesing answers but no mention of 2010.
• Brenda McGahan to return to review global marketing business.

Fall ing Woolmark licensees and a big drop in the revenue from the 2pc wool levy paid by all woolgrowers are the main reasons for the financial hit.

The broom used to sweep clean the management of AWI has quickly turned to an axe, with cutbacks expected across the board for research and development projects and staff.

According to the recent annual report, AWI received $90m in revenue last financial year and had cash reserves of $65m as of June 30 this year.

"The previous board made the decision the cash reserves were to stay put and management had to cut the cloth to fit and that will be up to the chief executive officer," new AWI chairman Wally Merriman said.

AWI chief executive Craig Welsh now has the job of assessing various projects within AWI but Mr Merriman has hinted at a "major shift in ideas of what's important and what’s not".

He has long been a critic of funding for sheep genetics, the development of bare breech breeding together with breech and tail clips.

More effective marketing of wool has long been an issue for Mr Merriman and his political colleagues.

However, research into other mulesing alternatives such as intradermal injections is unlikely to be cut given the on-going pressure to find alternatives to the controversial practice.

Finding real answers to mulesing within two years is one challenge but convincing growers that AWI should exist at all by October next year is another.

This is when growers will be voting on the level of their wool levy.