Forest Talks Fail, but……..

This is very disappointing.

But not unexpected.

The IGA parties reaching an agreement was always the less likely outcome.

But at least they tried and for that I congratulate them.

The last two years have shown that this has not been a “road to Damascus” revelation for the forest industry, just the same old nags running the same old race while the crowd bays for blood.

Only this time the context has been completely different. The forest industry in Tasmania has all but disappeared over the past 2 years. And the failure to reach agreement will mean that the forestry wars will continue and the remaining Crown native forest customers and FT will wither and die over the next 5-10 years. But at least they will disappear with the deep satisfaction of having someone else to blame.

It will continue to be difficult to attract new investment while the industry remains highly politicised and the forestry wars continue. Will a change of State or Federal government solve the problem? I doubt it very much. I suspect it will instead exacerbate and prolong the problem.

The inability of the forest industry to understand its own predicament and resolve its own problems has been simply astonishing. In the 21st century the forest industry in Australia should be enjoying unprecedented support and commercial success. Instead it is characterised by social damnation and bankruptcy.

The failure of the IGA is not unexpected. That the private forest growers did not take the initiative during the IGA and set a new agenda for the forest industry will go down as one of the great lost opportunities. The private forest growers could have had a profound and positive influence on the IGA negotiations. They did not need to have a seat at the table in order to achieve this.

Instead private forest growers in Tasmania remain convinced that their interests are 100% aligned with FT and the remaining Crown customers. This position exposes them to greater political risk and commercial uncertainty than FT and its customers. In finance-speak private forest growers remain exposed to all the downside of the industry and none of the upside. Just extraordinary! They need to change their position.

Regardless of the outcome of the IGA private forest growers will eventually become the dominant force in the forest industry in Tasmania. This will be a good thing. But it is going to take a long time to get there. Neither the State nor Federal Governments have the interest or ability to drive this change. So the initiative must come from the farmers and commercial tree growers themselves. As yet the TFGA shows no signs of supporting such a move.

And what of the blackwood industry?

The failure of the IGA means $100m of Federal money will not come to Tasmania, that could have helped fund the Blackwood Growers Coop. It also means that the existing blackwood industry (the sawmills, furniture makers and retailers, craftspersons, luthiers, etc.) will disappear along with the rest of the native forest industry in Tasmania. In a few years time we will be importing most of our blackwood timber from New Zealand (farm-grown plantation blackwood). That is assuming we can compete with the Chinese. More likely the Chinese will buy all the blackwood timber that NZ can produce at prices that we just can’t match.

Tasmanian farmers will miss out on diversifying their income, utilising land that currently is unproductive. The Tasmanian community will lose its blackwood expertise and heritage.

 

But I’m not giving up hope just yet…..

I’ve been informed that if I can demonstrate the Coop can get FSC certification and start attracting a few customers, then it may attract private investment.

1.    I’ve recently made further enquiries about FSC certification and been told there is a good chance that the Coop could achieve FSC certification for harvesting existing farm blackwood, and establishing blackwood plantations. I am looking further into this and will keep you informed.

2.    A major US guitar maker will be arriving in Tasmania in the next few weeks looking to establish a long term relationship with blackwood suppliers. This company has shown a major commitment to developing sustainable tonewood supplies in other countries. If they show a similar commitment here, and we can demonstrate that we are moving towards an FSC certified Blackwood Growers Cooperative, then this may provide the Coop with the necessary momentum to get us going.

3.    So if we can show progress on the above issues then I’ve been informed that private investment may be interested in helping getting the Coop going. The failure of the IGA may in fact help create a different positive dynamic for the Coop as the forestry wars resume.

The next few months will prove decisive for the Coop for better or worse. But even with the failure of the IGA there remains enough potential and hope that the Blackwood Growers Cooperative may yet rise from the ashes. Watch this space!

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