The end is nigh!

Bunnings

The public native forest market is shifting quickly.

Wesfarmers, the parent company of Bunnings Hardware and Officeworks, yesterday announced they will only stock FSC certified products by 2020.

http://www.abc.net.au/news/2018-09-17/vic-forestry-industry-at-risk-of-collapse/10255128

This means both Vicforests and Sustainable Timbers Tasmania will cease to exist.

Neither of these State Government forest agencies are likely to achieve FSC certification before then. Bunnings is a major customer for both these agencies products.

In less than a week since its launch the new National Forest Industries Plan has been dealt a mortal blow!

https://blackwoodgrowers.com.au/2018/09/17/national-forest-industries-plan-2018/

Six weeks ago Bunnings gave warning that it was living up to its policies and making a stand against poor forest management practices in Australia:

https://blackwoodgrowers.com.au/2018/08/04/bunnings-finally-takes-a-stand/

All around Australia public native forest management is in crisis.

Stand by for some serious fireworks!

Advertisements

National Forest Industries Plan 2018

Better

The only basis for a successful forest industry is profitable private tree growers.

And once again the Federal Government and the Australian forest industry have failed to deliver.

Last week the Federal Government launched another plan for the Australian forest industry:

http://www.agriculture.gov.au/forestry

http://ausfpa.com.au/media-releases/morrison-government-promises-a-billion-new-production-trees-sets-new-vision-for-growing-australias-renewable-forest-industries/

Yet another opportunity for Australian taxpayers to give generously to the tune of $20 million over the next 4 years with more to come.

But wait! There is a Federal election due before November 2019.

Surely this is coincidence!

Another forest industry plan so close to an election. Is that pork I smell cooking?

Apologies for my cynicism but I’ve seen this so many times before.

Forest industry plans have a short shelf life in Australia. The Use By Date generally coincides with the next election/change of Government.

The Plan is 15 pages long, 15 pages of marketing and spin with very little substance. Just reading the 2 page Preface tells me that I’ve read all this many times before.

If this Plan was an investment prospectus it would be in the bin within the hour.

The Preface tells me:

  • Its all political;
  • Its all about the sawmillers/wood processors;
  • It even mentions “resource security” which is just another term for industry subsidy.
  • Competitive markets, log prices, market transparency are not discussed at all!
  • It tells me that Farmers will play a vital role. Farmers beware!!! Here’s a typical quote: Working with farmers to secure a long-term ‘wood bank’ for the forest industries’ future…. That’s it! Farmers role is to help subsidise the forest industry.
  • Does the Plan discuss profitable tree growing? Not at all!

The Plan has 15 Actions listed under 4 headings. Every one of the Actions is what the Government/taxpayer is going to do for the wood processors. Not one of the Actions concerns what the forest industry will do for itself.

There is no Implementation Plan. How, who and when are these Actions going to be fulfilled? Based in past industry plans I assume few if any of the Actions will see the light of day.

The word “export” is completely absent from the Plan. Access to log export markets is an essential part of the future of any viable profitable forest industry.

The Plan fails to address the many distortions and blockages in forestry markets in Australia (like Government control and manipulation of log prices). One major issue here is the management and performance of the various State forest agencies. All these agencies MUST be made fully commercial and profitable, or they must be must be shut down.

Many reports have been written highlighting the issues preventing investment in tree planting in Australia. This Plan ignores these issues entirely!

As I said in my previous blog forest policy should not be about sawmillers/wood processors. That is the wrong focus. Good forest policy should be about profitable private tree growers. Once tree growing is demonstrably profitable then the investment in processing will follow.

This Plan is all about sawmillers/processors.

The political and industry spin doctors really had fun with this statement:

The National Farmers Federation’s support for the inclusion of farm forestry tree plantings as a supplement to primary agricultural purposes confirms that farmers are poised to support a bigger part of tree growing in our landscape.

The National Farmers Federation (NFF) has only recently decided that forestry might be a primary industry. To date their interest and commitment has been minimal. They have no policies or farm forestry programs.

The one single positive I can say about the Plan is that it has a stronger emphasis on farm forestry than previous plans, but not in a way I find encouraging.

If you have 30 minutes and want some light entertainment download the Plan and have a read. Then tell me what you think!

Will this Plan ignite the forest industry in Australia?

Or will it join the dozens of previous forest industry plans collecting dust on library shelves around the country?

Cheers!

Sawmillers and forest policy

protest

These recent news items highlight the moral hazard that continues to dominate forest policy and the forest industry in Australia:

https://www.news.com.au/national/breaking-news/calls-for-overhaul-of-vic-timber-industry/news-story/0db91597e1b64a9a72e02e9319c23a5c

and

https://www.timberbiz.com.au/victorian-sawmillers-call-for-change-favouring-plantations/

For 200+ years forest policy in Australia has been about sawmillers (and to a lesser extent other wood processors).

Profitable tree growing has NEVER been the focus of forest policy in Australia.

It’s like having a dairy industry policy focused on cheese makers at the expense of dairy farmers.

Sawmillers need to understand.

Good forest policy isn’t about them!

Good forest policy is about the growers. It’s about profitable tree growing.

If tree growing is not profitable then sawmilling has no future.

It’s that simple.

Continually asking taxpayers for more money is not a forest industry plan.

The forest industry does not need to transition to a plantation resource.

In fact the whole idea of “transition” is completely wrong.

Transition keeps the policy focus on employing sawmillers.

That is exactly the rubbish policy focus that got us into the current disaster.

The forest industry policy needs to transition to profitable private tree growing.

That is a very significant difference!!

Queensland farmers growing African mahogany in plantations

MahoganyNQ

This recent ABC Landline story introduced me to yet another group of Australian farmers who are getting on and growing quality high value timber for the marketplace:

http://www.abc.net.au/news/2018-08-26/african-mahogany:-plantation-forestry-could-value/10166656

African mahogany (Khaya senegalensis) has a 200+ year reputation as a premium quality hardwood, but supplies from West Africa are all but exhausted.

Check out their website:

http://mahoganynq.com/

and on Facebook

https://www.facebook.com/MahoganyNQ/

These people are at the stage of first harvest and looking to break in to the fickle Australian timber market.

The question now is – will the Australian market support these farmers in their efforts to build a new forest industry?

To date the Australian market (architects, builders, joiners, furniture makers, consumers, etc.) has shown little interest in encouraging and supporting Australian farmers growing trees for wood production.

It’s well past time for that attitude to change.

This is a great story and definitely needs everyones support.

Who said Australian farmers won’t grow timber?

Now!

Anyone for growing Tasmanian blackwood?

NSW Forestry Minister Paul Toole responds

log truck

So the NSW Forestry Minister Paul Toole rushes in to confirm that the forest industry IS a taxpayer and ratepayer subsidised loss-making community service.

The forest industry IS NOT a primary industry at all!

It’s knowingly anti-commercial and anti-competitive!

https://www.oberonreview.com.au/story/5599831/think-about-the-affect-of-a-rates-change-on-forests-land-toole/

Firstly comes the threat of job losses from the Minister.

Yes the forest industry has been subsidised for so long that job losses are inevitable. The forest industry needs to become competitive in global wood markets otherwise it will wither and die. Subsidising the forest industry wont save it!

But once the industry becomes fully commercial and competitive comes the opportunity for growth and expansion, and more jobs. Curious that the Minister only focuses on the negative, not on the opportunities.

Second comes the idea from the Minister that State forest is Crown land and is not rateable. The fact that private forest owners are immediately disadvantaged by this situation is completely ignored. If anyone (Government or private) grows trees for wood production then that is a business and must be treated as such, and treated equally. A level commercial playing field is absolutely essential.

Talking about cemeteries, parks and racetracks is deliberate obfuscation!!

Finally the Minister tries to convince his readers that the NSW Forestry Corporation is a community service NOT a business.

Another furphy!

NSWFC’s primary purpose is to manage forests for wood production AS A BUSINESS!! Why else is it called a corporation? And as a corporation it must be managed like any other private tree growing business and pay rates.

The Oberon mayor Cr Sajowitz said last week that she wanted to stress that a “vibrant, expanding timber industry is absolutely vital to the economic stability, growth and prosperity of our towns”.

But she said “government profit at the expense of local communities is not tenable”.

The Oberon Mayor is completely correct but she could provide a broader, more forceful argument.

If the forest industry can’t operate in a fully commercial and fair manner then it’s future is indeed grim.

How is the forest industry going to remain competitive in global markets if it relies on increasing subsidies?

How is the forest industry going to attract private investment if private investors have to compete against a subsidised competitor?

These basic matters of proper commercial management need to be resolved if the forest industry in Australia is to have any future at all.

Unfortunately there are very few people who understand and even fewer who are pushing for change.

Competition, level playing fields and subsidies

log truck

The forest industry in Australia has some serious basic issues that need to be fixed before anyone is going to take the industry seriously.

This is one of them.

It has to do with competition, level (commercial) playing fields, ratepayer subsidies and community support.

In Australia we can have the situation of two forest owners who are neighbours, one of whom pays local Government rates (taxes) on their forest land and the other does not.

One owner gets to use local Government roads to carry logs for free, the other has to pay rates to help maintain the roads. The former gets a subsidy (free roads) from his neighbour (and other ratepayers), to the competitive disadvantage of his neighbour, and any other landowner thinking of growing trees for wood production. Why compete against growers who get to use the roads for free.

And why subsidise these forest growers anyway? Everyone else pays rates!!

It’s an astonishing situation.

And local Governments around Australia are complaining more and more. Here are two recent examples:

Oberon mayor will continue fight for better deal on forestry land

Lithgow City Council joins call to abolish Forestry rate exemption

This can be either a) State forest agencies not paying rates on either native forest or plantation land, or b) privatised former Government plantation owners being exempt from paying rates such as in Queensland.

The Mayor of Oberon says a lot of very good things in that article. Well worth reading.

How can the forest industry hope to gain community support if it treats local communities with such blatant contempt?

Ratepayers should be marching on City Halls around the country demanding action!

Why are Australians continuing to subsidise the forest industry?

How many Australians even realise they are subsidising the forest industry through their local rates?

Not very many is my guess.

No forest companies or State forest agencies tell us if they are paying rates on their forest land. And I bet no local Councils/Governments tell their rate payers if they are subsidising the industry. I went to the Oberon local government website and couldn’t find any mention of the issue. Not even the ratepayers of the Oberon Shire, NSW are allowed to know they are being ripped off!

https://www.oberon.nsw.gov.au/

Why does the forest industry accept these deliberate market distortions that destroy competition, inhibit investment and ultimately destroy the industry’s future?

Growing trees for wood production is a business right? Just like every other primary industry.

Removing these deliberate market distortions would help put the forest industry onto a level playing field. It would help make the industry more competitive and encourage investment.

The only basis for a successful forest industry is profitable (unsubsidised) tree growers.

CERES Fair Wood

CERES-Fair-Wood-Herald-Sun-Ellen-Smith

“Fair Wood seeks to bridge the gap that exists between socially and environmentally conscious timber consumers and small Australian farm-foresters and saw millers.”

https://ceresfairwood.org.au/

https://www.facebook.com/ceresfairwood/

The momentum to create an alternative wood market away from public native forestry and illegal imported timbers is slowly growing in Australia.

Hooray for that!!

Here’s another new business looking to help create that vision.

Ceres Fair Wood is based in Melbourne.

I like the words “bridge the gap”!

At the moment the Fair Wood web page looks just like any other retailer – products to sell.

I hope one day soon the web page also has a “Growers” heading.

As the Fair Wood business grows it should be providing lots of market information back to the farming community, so that farmers get a very real sense that the market wants them to grow wood!!

In my opinion that is what is needed to “bridge the gap”!

Hooray for Fair Wood! Good luck guys!!