Tag Archives: TFGA

Wish List Revisited

Makeawish

The recent Ministerial Statement by Tasmanian Resources Minister Guy Barnett, and the strong negative reaction it provoked from both the community and the forest industry got me thinking about the wish list I wrote last year.

http://www.premier.tas.gov.au/releases/ministerial_statement_-_forestry

So I’ve decided to update my Wish List.

Does Tasmania want a successful forest industry?

If so then here are a few ideas:

  1. Government policy

Tasmanian Government forest policy continues to focus on public native forest, a failed State forest agency, and protecting local jobs at any cost. If we adopted this same thinking for any other primary industry Tasmania would be an economic basket case. Our politicians and large sections of the forest industry and the community still think of the forest industry as a community service, a government employment program.

Sorry guys but it’s the 21st century.

The only basis for a successful modern forest industry is profitable tree growing.

Most wood now grown and sold in Australia comes from private tree growers.

It is time to put the policy focus on profitable private tree growers and away from public native forest and a failed State forest agency.

Implementing the Federal Government’s Farm Forestry National Action Statement 2005 would be a good place to begin.

http://www.agriculture.gov.au/forestry/australias-forests/plantation-farm-forestry/publications/farm_forestry_national_action_statement

 

  1. Government structure

We need to think of forestry as a primary industry and not as a Government-run, politically-driven, taxpayer-funded employment program.

One example of this change would be to move Private Forests Tasmania (PFT) from the Department of State Growth Tasmania to the Department of Primary Industries, Parks, Water and Environment (DPIPWE). At the moment this DPIPWE website contains no mention of forestry at all:

http://dpipwe.tas.gov.au/agriculture

Why isn’t forestry regarded as a primary industry in Tasmania?

Why isn’t Private Forests Tasmania part of DPIPWE?

So that all commercial forest policy and practice is aligned with primary industry policy the Government Minister responsible for PFT/DPIPWE should also be responsible for Forestry Tasmania. Now does that sound logical or what?

  1. Private Forests Tasmania

Following from the above logic Private Forests Tasmania needs to become the dominant Government forest agency, NOT Forestry Tasmania.

  1. Forestry Tasmania

And following on we need to get the politics, conflict and the anti-competitive policies out of the industry. That means either a) completely transforming Forestry Tasmania into an independent, fully commercial, profitable business, or b) shutting down public native forest logging.

  1. Plantations

The future of the forest industry is plantations. And like all primary industries the only basis for a successful forest industry is for (public and private) tree growing to be transparently profitable. The forest industry and the Government need to do everything they can to encourage profitable market-driven plantation investment. No scams!! See below for my comments on forest practices and markets and transparency for two ways to achieve this.

  1. Native forests

If there is any value/profitability at all left in logging Tasmanian native forest it must be pretty marginal. The Tasmanian Oak brand has been pretty well trashed over the last 50 years. Commercially managing native forest is a very costly operation. The only way it can be viable is by producing very high value products from most of the resource. This has never happened. Certainly in the pulp and construction markets, which account for the vast majority of the wood market, native forests don’t stand a chance competing against plantation-grown wood.

  1. Special Timbers

Using scarce taxpayers money to cut down 400+ year old public native rainforest and oldgrowth in the 21st century, with the excuse that special timbers are an essential part of “Brand Tasmania”, makes no sense whatsoever. All wood production must be fully commercial and profitable. There must be no community-service forestry in Australia. Given that blackwood makes up the vast majority of special timbers production anyway, and it can be grown in commercial plantations, the focus of special timbers policy must change.

  1. Forest practices

I have four thoughts here:

  1. The current Tasmanian forest practices code was developed when community-service public native forestry dominated the industry. However in the spirit of over-regulation it provided a significant hurdle to private plantation development. The forest practices code needs to be reviewed within the light of the following three comments.
  2. We need to create a primary industries level playing field when it comes to environmental management, so that regulation does not distort land use decisions. New Zealand has this approach to “forest practices” with their Resource Management Act 1991. I don’t see why Tasmania should not follow their example.
  3. Following on from b) the Tasmanian Forest Practices Authority should be merged with the Tasmanian Environmental Protection Authority to provide environmental monitoring, regulation and research services across all jurisdictions. Why does the forest industry need its own separate environmental regulation system?

http://www.fpa.tas.gov.au/

http://epa.tas.gov.au/

  1. The Australian forest industry should work towards developing a single set of national plantation management guidelines for the whole country as much as it is able within the maze of different State jurisdictions. At the moment regulations governing plantation management vary enormously across Australia. This is stupid and anticompetitive. It will be a long process but a worthy goal.
  1. Tasmanian Farmers and Graziers Association

The Tasmanian Farmers and Graziers Association (TFGA) needs to become a genuine independent, vigorous advocate for private forest growers. The interests of private forest growers are not the same as those of sawmillers, or Forestry Tasmania nor the Government of the day. A thriving commercially competitive, profitable forest industry can only exist when private tree growers have a strong, fearless, independent voice. The TFGA is the only option currently available.

  1. Competition, prices, markets and transparency

The forest industry in Australia hates open market processes and transparency! This is not surprising given its history. When was the last time you saw a forestry market report in the Australian media? When was the last time you saw a sawmiller hang out his slate looking to buy sawlogs?

In my books this is the major challenge for the industry. There have been a few attempts in the past to change this but they have failed due to lack of industry support. The industry will have no future until it becomes fully commercial – aggressively commercial!!! It’s all about competition, prices, markets and transparency. Farmers will never take the forest industry seriously until this happens.

  1. Where to begin?

Tasmania is a great place for growing trees for wood production.

But Tasmania is a small island a long way from world markets.

Because of our size and remoteness we cannot compete well in commodity markets like pulpwood and construction timber. We must think small volume high value niche markets such as appearance grade timbers and timbers for specialty markets. New Zealand farmers are doing this. But it needs focus and a strategy, not a random shotgun approach. One obvious example is macrocarpa cypress. There is a growing demand for this timber, as a handful of people in Tasmania know very well. NZ has thousands of hectares of cypress plantation growing on farms. Why doesn’t Tasmania?

  1. Blackwood

Tasmanian blackwood provides another ideal example of a low volume high value forest product with which to help rebuild the forest industry. Quality appearance grade timber will always be sort after in the market, especially the super premium market. Tasmania could easily be producing 30,000 cubic metres of premium blackwood sawlog per year with the right policy and industry backing. At $500 per cubic metre that equates to $15 million in farm gate value per year. So where is the policy and industry support that will make this happen?

 

Unfortunately all of these ideas are so beyond current forest industry and political thinking they will never happen.

Certainly Minister Barnett’s Ministerial Statement contains nothing like the above plan.

No one is campaigning in Tasmania for private forest growers and a fully commercial profitable forest industry!

Tasmania does a good job running a successful dairy industry; and a pretty good job running beef, vegetable, apple, cherry and wine industries. So what is it about the forest industry?

When will Tasmania get a fully commercial profitable forest industry?

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Tasmanian Farmers and Graziers Association (TFGA)

TFGA

The TFGA is the only peak farming lobby group in Australia that includes forestry in its list of major primary industries.

Curiously even Agforce Qld, which a few years ago helped fund a joint program with Timber Qld called AgForests Qld to promote better use/management of Qld private native forests, does not recognise/represent the forest industry.

Not even the National Farmers Federation considers forestry an important primary industry relevant or important to the rural community!

It real is extraordinary!

As a forester that says a great deal about the myopic views of the forest industry and the farming lobby.

An enormous ideological abyss still exists between the forest industry and agriculture.

Up until 10 years ago the forest industry was dominated by State governments, public forest resources and a community service business model. No self respecting farmers lobby bothered with forestry.

But not anymore!

Most wood now grown and sold in Australia comes from private commercial forest growers.

Forestry is now a real primary industry!

But the farming lobby groups have not understood the fundamental changes happening in the forest industry.

And the forest industry still doesn’t understand that its future is now with farmers and private land owners, and not with politicians.

The forest industry has no future unless it can get the farming lobby onside.

Alternatively the forest industry has no future whilst the farming lobby regards commercial tree growing as irrelevant and unimportant.

There is a lot of work to be done.

Here’s a list of the major farm lobby groups around Australia:

Tasmanian Farmers & Graziers Association http://www.tfga.com.au/

Victorian Farmers Federation http://www.vff.org.au/

NSW Farmers Association http://www.nswfarmers.org.au/

Queensland Farmers’ Federation http://www.qff.org.au/

Agforce Qld http://www.agforceqld.org.au/

Primary Producers SA http://www.ppsa.org.au/

Western Australian Farmers Federation http://www.wafarmers.org.au/

NT Farmers http://www.ntfarmers.org.au/

National Farmers’ Federation http://www.nff.org.au/

 

So why is the TFGA important to the future of the forest industry?

  • The future of the industry is with profitable commercially focused private tree growers;
  • We need a strong independent advocate for private growers to help counteract the political distortions and corruptions in the forest industry;
  • We need a new conversation about forestry that is not lead by politicians, sawmillers and conservationists.

So where is the TFGA as a strong independent advocate for private tree growers?

Forestry is the only primary industry that pits private growers against a taxpayer-funded Government grower? No other industry (diary, vegetables, fruit, beef, wool, etc) faces this problem!

The traditional advocates for the forest industry in Tasmania are politicians and the Forest Industries Association of Tasmania (FIAT) neither of whom give a toss for private tree growers.

So why do you think the forest industry is in such a mess?

We need policies that will help drive an efficient, commercially focused, flexible and profitable forest industry? And we need a strong independent advocate!

The TFGA website says: The TFGA constantly develops and reviews policies in almost every area of economic activity, through its board, committees, commodity councils and annual general meetings.

So where are these policies?? Certainly not on the TFGA website!

I should mention here that my definition of a forest industry is first and foremost focused on profitable tree growing. Profitable tree growing is the only basis for a successful forest industry, even if that means every log grown and harvested has to be exported.

Come on TFGA! We need you!! Organise some industry/community forums. Write some policies. Start a bold conversation about profitable tree growing!! Help implement the National Action Statement on Farm Forestry!

https://blackwoodgrowers.com.au/2016/02/25/two-significant-forest-industry-reports-that-went-nowhere/

We need leadership!!!

 

Wish List

Makeawish

The forest industry in Tasmania is heading towards oblivion, at least the part of the industry dependent on the public native forest resource. Decades of poor policy, politics and conflict have reduced the industry to a smoking ruin. But we seem to have trouble learning from past mistakes and from other people’s successes. Getting people to invest in the forest industry (from planting trees to investing in sawmilling and processing equipment) just won’t happen under the current regime. So here is my one dozen wish list:

  1. We need to start thinking of forestry as a primary industry and not as a Government-run, politically-driven, employment program. Sure it has a few unique features like a long investment time lag, but forestry is about business and profits; markets, costs and prices. It is not about politics or employment! Most wood now grown and sold in Australia comes from private tree growers. It is time to put the policy focus on private growers.One example of this change in focus would be to move Private Forests Tasmania (PFT) from the Department of State Growth Tasmania to the Department of Primary Industries, Parks, Water and Environment (DPIPWE). At the moment this DPIPWE website contains no mention of forestry at all:http://dpipwe.tas.gov.au/agricultureWhy isn’t forestry regarded as a primary industry in Tasmania?

    Also the Government Minister responsible for PFT/DPIPWE should also be responsible for Forestry Tasmania, so that all commercial forest policy and practice is aligned with primary industry policy. Does that sound logical or what?

  2. And like all primary industries the only basis for a successful forest industry is for tree growing (public and private) to be transparently profitable.That’s the golden rule! It’s that simple!Commercially focused, profitable tree growers are the foundation of a successful forest industry. The forest industry is not about subsidizing the sawmillers, papermakers, or woodchippers, or the furniture makers, craftsmen, luthiers or boatbuilders. These people are important, but without profitable tree growers they are irrelevant. Forest industry policy should be focused on profitable tree growers.
  3. We need to get the politics and conflict out of the industry. That means either a) completely transforming Forestry Tasmania into an independent, fully commercial, profitable business, or b) shutting down public native forest logging. There are no other options!
  4. Public and private tree growers must be able to compete in the marketplace on a level playing field. This means no more subsidies or political protection for public tree growers. Forestry Tasmania must be structured and managed just like a private tree grower – independent, fully commercial and profitable. Anything else is anti-competitive.
  5. The Tasmanian Farmers and Graziers Association (TFGA) needs to become a genuine independent, vigorous advocate for private forest growers. The interests of private forest growers are not the same as those of sawmillers, or Forestry Tasmania nor the Government of the day. A thriving commercially competitive, profitable forest industry can only exist when private tree growers have a strong, fearless, independent voice.
  6. It’s time for the forest industry (and I’m talking about everyone here from tree growers to wood processors and log exporters) to publically demonstrate some real commercial muscle. Where are the profits? Where are the prices? Where are the markets? Where is the transparency and market feedback? For far too long the industry has focused on political muscle. It’s time to “put the rubber to the road” and lead by commercial example.
  7. Unlike many other primary industry markets, Australia’s forestry markets have historically been opaque to near invisible, and continue to be that way. Hidden markets do not encourage investment in planting and infrastructure. The forest industry in New Zealand issues regular monthly market reports. This helps everyone better understand the marketplace. We desperately need similar transparency in forestry markets here in Australia.
  8. To help overcome the natural reluctance of many people to make the long-time investment in forestry (the time between planting and harvesting), the industry needs to be incredibly (aggressively??) transparent in the marketplace. This means lots of market reports and updates, lots of price and demand information, etc. We need significant market stimulation to help landowners get past the big time factor!!
  9. Farmers need to have greater understanding and confidence in forestry markets. Again this requires forestry markets to be much more transparent and commercially focused; just like other rural commodities. Investing in forestry is not easy. There’s the technical stuff and the long investment period, and just the switch to thinking “long term”. When we start getting forestry market updates in the rural media then I will know that the forest industry has come of age.
  10. The forest industry needs a new Forest Practices Code, or rather it doesn’t. Let me explain.The forest industry in New Zealand is huge (bigger than Australia’s) and very successful, but New Zealand does not have a Forest Practices Code. Imagine that! In New Zealand they regard the forest industry as just another primary industry, which must abide by the same code of environmental practice as all the other primary industries. It’s called a level playing field.The code is called the Resource Management Act 1991, and it applies to most primary industries. It is designed to protect environmental values regardless of land use. So growing trees for wood production has the same regulatory framework as other primary land uses. A brilliant idea!Here in Tasmania the forest industry is far and away the most (over?) regulated primary industry in the State. This creates market distortions and discourages sensible land use and investment decisions.Forest plantations on already cleared land should be no more or less regulated that any other agricultural crop. For many Tasmanians that will be a very difficult thing to imagine after the MIS hardwood plantation disaster.

    (And whilst on the subject of New Zealand, the forest industry there survives without any resource security. That’s right! Whatever trees the private forest growers have to sell is the only resource available to industry. That’s all. If a sawmiller wants “resource security” then they need to pay a competitive price to stay in business. The issue of “resource security” is a furphy!)

  11. And following on from the previous item, why do we have Private Timber Reserves in Tasmania?http://www.pft.tas.gov.au/index.php/services/services/1-website-articleWhy not Private Onion Reserves, Private Poppy Reserves, Private Cow Reserves or Private Apple Reserves? In fact why not make all primary industries subject to a single Statewide planning system? Wouldn’t that be fairer? We could even call it the Resource Management Act!
  12. And finally I’d like to see Tasmanian farmers incorporate commercial blackwood growing into their business models (either plantation or native bush), developing the skills, passion and expertise in growing this iconic quality Tasmanian product. But this won’t happen to any extent unless change occurs within the forest industry and Government policy.

When you compare my wish list with the current forest industry you can see an enormous abyss. Current forest policy is focused on a public native forest resource, a bankrupt, non-commercial public forest manager, a handful of taxpayer-subsidised sawmillers and processors, and enormous amounts of politics and community conflict. It has been this way for decades!

It seems that none of this will change unless the TFGA (on behalf of private forest growers) start demanding reform. And based on recent events I can’t see this happening any time soon.

What do you think? Comments? Continue reading

TFGA supports continuation of failure

TFGA_Skillern

TFGA CEO Mr Peter Skillern

Well the TFGA retains its historical position as being incredibly conflicted and confused about the role of the private forest grower and the future of the forest industry in Tasmania.

http://www.abc.net.au/news/2015-06-19/tfga-supports-forestry-tasmania-dismantle-discussion/6558536

With the Forestry Tasmania GBE business model being shown to be a complete disaster over the past 21 years the TFGA comes out today and says that’s fine, keep it going!

It’s pretty pathetic and shows a complete lack of independence and vision.

Typical!

Private forest owners now dominate the forest harvest in Tasmania for perhaps the first time ever.

State forest policy should now be focused entirely on building a profitable, commercially focused private forest grower base.

But the TFGA appears not to want this. Instead the TFGA wants State forest policy to remain 100% focused on the public forest resource and a failed GBE.

More politics and conflict and a failed forest industry.

The TFGA is the only representative and voice of the private forest grower in Tasmania.

I just don’t understand!

At least Sue Smith had the guts to have a go and say something different.

Forestry Tasmania and the Economic Regulator

FT logo

The Government’s willingness to breach the spirit of national competition policy by its use of State resources to prop up Forestry Tasmania whilst imposing austerity on broader sections of the Tasmanian community has struck a discordant note with many of the affected. If prices charged by Forestry Tasmania were required to fully cover costs [never mind the idea of actually making a profit] then it would be required to cease its unprofitable native forest harvesting.

 

A willingness by the affected to pursue remedies and solutions has precipitated this note.

 

Competitive neutrality complaints are handled by the Office of the Tasmanian Economic Regulator (OTTER) pursuant to the Economic Regulator Act 2009 .

http://www.tasfintalk.blogspot.com.au/2014/12/ft-and-economic-regulator.html

This blog by Tasmanian finance and economics commentator John Lawrence came out before Christmas, but it drives home the continuing failure of policy and corporate governance that is the hallmark of Government Business Enterpises such as Forestry Tasmania.

The fundamental lesson remains that Governments should not be in the business of competing with private business. Forestry is a business and there are many private tree growers who are being disadvantaged by Government policy and action.

One of the many failures in all of this is that farmer representative bodies such as the TFGA fail to bring the Government to account. If the Government opened a public service-run dairy, sold milk at below cost and then sacked teachers and nurses to help pay for it, the TFGA, dairy farmers and the rest of the Tasmanian community would be marching on Parliament. But for some reason forestry is different. Disadvantaging dairy farmers is out of the question but apparently disadvantaging private tree growers is perfectly acceptable behaviour amongst the farming community. It is very curious!

Another failure, as John Lawrence highlights, is that the so called Economic Regulator is a toothless tiger that spends more time licking the hands of politicians than biting their ankles.

http://www.energyregulator.tas.gov.au/

It is certainly curious that Forestry Tasmania, the one Government agency that clearly competes with the private sector (unlike gas, electricity and water), is completely off the Regulator’s radar. Coincidence? I doubt it!

So forestry industry workers enjoy complete Government protection whilst front line services such as nurses and teachers continue to lose their jobs. And forestry markets remain completely distorted and corrupted by Government policy.

When will Tasmania wake up? When will farmers and private tree growers rally of the lawns of Parliament House and demand reform?