Category Archives: Politics

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!

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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!!

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.

Bunnings finally takes a stand

Bunnings

I wrote back in May about Bunnings, their fantastic timber policies, and how it was time for Bunnings to live up to those policies when it comes to their support for public native forestry in Australia:

https://blackwoodgrowers.com.au/2018/05/12/bunnings-timber-price-list-update/

Well it seems the time has come:

https://theage.com.au/politics/victoria/timber-industry-bid-to-prove-its-green-credentials-falls-flat-20180801-p4zuxv.html

Federal and State Governments refuse to resolve the disaster that is public native forestry in Australia so its time (finally) for the market to take responsibility.

Hooray for that!!

Hardware chain Bunnings has put VicForests on notice that it must reduce its impact on Victoria’s native forests or risk losing its custom, after the state-owned forestry company failed in its [third] bid to achieve green [FSC] certification.

Bunnings needs to also issue this warning to Tasmania’s State-owned forest agency Sustainable Timbers Tasmania.

https://bunnings.com.au

http://vicforests.com.au

https://sttas.com.au

Bunnings is Australia’s largest hardware chain with annual turnover of $11 billion and over 31,000 employees. It is Australia’s largest timber retailer.

Bunnings could be about to change the face of the forest industry in Australia and bring the industry into the 21st century.

So what else could Bunnings do to support a real forest industry in Australia?

The future of the forest industry in Australia is with profitable private tree growers.

Bunnings needs to start talking with farmer groups. There is a long road ahead and many years of neglect to make up, but forestry is about the long term.

Since Bunnings is also in New Zealand they should form a partnership with the New Zealand Farm Forestry Association (NZFFA), and support Kiwi tree growers.

Hooray for Bunnings!!!

Addendum

Upon further reflection one has to wonder exactly what is Bunnings hoping to achieve from its warning to Vicforests?

Vicforests has now failed to achieve FSC Certification three times!!

What possible assurances or changes in behaviour can Vicforests provide that will satisfy Bunnings but failed the Forest Stewardship Council test?

Surely a “three strikes” result from the FSC should be enough for Bunnings to stop supporting Vicforests.

Public native forestry in Australia is fundamentally compromised. It cannot achieve suitable environmental, community, political and commercial outcomes all at the same time. That is mission impossible!!

Bunnings and the rest of the timber market need to wake up to this fact.

Tasmanian Forest and Forest Products Network

TFFPN

Tasmanian taxpayers have generously sponsored the creation of a new forest industry representative body (goodness knows the forest industry can’t afford to fund such luxuries themselves).

Not only do we have FIAT (Forest Industry Association of Tasmania) as the sawmillers representative, but we now have the Tasmanian Forest and Forest Products Network (TFFPN).

Tasmania now as not one but TWO forest industry representative bodies. That should work well! NOT!!

Two bands of thieves to plunder our forests and the State Treasury.

Check out their website:

https://www.tffpn.com.au/

This new body exists to represent everyone; everyone that is except real forest growers. No one is representing forest growers. Not even the TFGA.

One of the reasons forest industry reform has been so difficult in Tasmania is because there are too many forest industry people with their hands in the taxpayer’s pocket. With the creation of the TFFPN that list of people has grown substantially longer. Forest industry reform will henceforth be nigh impossible.

The TFFPN will be launched in Hobart next week.

It will be interesting to see who signs up to the TFFPN to join the war games and get their hands on the money.

No doubt the Government will describe it as a major achievement.

What a joke!

The Government will use the TFFPN to wedge the community by promoting bitterness and division. No doubt the TFFPN will be more than happy to play this game.

FIAT is obviously not disappearing anytime soon.

FIAT no longer has the support of the Government because they had the temerity to go and talk to The Greens and negotiate the Tasmanian Forest Agreement, which has since been rescinded.

The forest industry in Tasmania is a complete mess.

Stand by for another 4 years of forest industry chaos and waste.

This article was in Wednesday’s Mercury newspaper:

MercuryTFFPN