Woodchip logs flogged for record low prices

New figures on native forest log royalties reveal an all time record low price for woodchip logs from the Southern Region but trees destined for woodchips or firewood selling for more than some high quality sawlogs in the Eden Region.

The startling figures are revealed in an answer to a Question on Notice in State Parliament asked by Greens MP David Shoebridge.[1]

Convener of the Chipstop Campaign, Harriett Swift has accused the Forestry Corporation of sending mixed messages, with incentives to use high quality logs for the least useful purpose such as firewood or woodchips in one region and bargain basement prices for woodchips in the other.

“Something has gone seriously wrong when a so-called “waste” product such as woodchips or firewood attracts a higher royalty than the “product” which logically would have the highest value.

“Is it any wonder that we continue to hear reports of sawlog quality logs on trucks heading for the Eden chipmill when we have such a perverse pricing structure?”

Ms Swift said that the answer reveals that the royalty for pulp logs in the Eden Region is now $18.19 /m3,  low quality sawlogs at $15.00 m3 with some high quality sawlogs attracting an even lower royalty of $15.47/ m3. Logs for firewood in Eden RFA region are sold at $21.50 m3.

Pulplogs from the Southern Region (north of Cobargo) attract a royalty of just $4.60 m3, which is a record low price.

“The Forestry Corporation has a legal obligation ‘to be a successful business and, to this end: - to operate at least as efficiently as any comparable businesses - to maximise the net worth of the State’s investment in the Corporation’ and ‘to have regard to the interests of the community in which it operates’,” she said.

“It is impossible to imagine a successful business in the private sector operating with a price structure like this.”

In a scathing report into the Forestry Corporation in 2009, the Auditor General recommended that log royalties be increased, but for Eden pulplogs, prices have barely kept pace with inflation, and for other logs, prices have actually fallen. It’s no surprise that the Auditor General continues to value the State’s native forests at ‘nil.’[2]

 

 

27 July 2015

Woodchip logs flogged for record low prices

New figures on native forest log royalties reveal an all time record low price for woodchip logs from the Southern Region but trees destined for woodchips or firewood selling for more than some high quality sawlogs in the Eden Region.

The startling figures are revealed in an answer to a Question on Notice in State Parliament asked by Greens MP David Shoebridge.[1]

Convener of the Chipstop Campaign, Harriett Swift has accused the Forestry Corporation of sending mixed messages, with incentives to use high quality logs for the least useful purpose such as firewood or woodchips in one region and bargain basement prices for woodchips in the other.

“Something has gone seriously wrong when a so-called “waste” product such as woodchips or firewood attracts a higher royalty than the “product” which logically would have the highest value.

“Is it any wonder that we continue to hear reports of sawlog quality logs on trucks heading for the Eden chipmill when we have such a perverse pricing structure?”

Ms Swift said that the answer reveals that the royalty for pulp logs in the Eden Region is now $18.19 /m3,  low quality sawlogs at $15.00 m3 with some high quality sawlogs attracting an even lower royalty of $15.47/ m3. Logs for firewood in Eden RFA region are sold at $21.50 m3.

Pulplogs from the Southern Region (north of Cobargo) attract a royalty of just $4.60 m3, which is a record low price.

“The Forestry Corporation has a legal obligation ‘to be a successful business and, to this end: - to operate at least as efficiently as any comparable businesses - to maximise the net worth of the State’s investment in the Corporation’ and ‘to have regard to the interests of the community in which it operates’,” she said.

“It is impossible to imagine a successful business in the private sector operating with a price structure like this.”

In a scathing report into the Forestry Corporation in 2009, the Auditor General recommended that log royalties be increased, but for Eden pulplogs, prices have barely kept pace with inflation, and for other logs, prices have actually fallen. It’s no surprise that the Auditor General continues to value the State’s native forests at ‘nil.’[2]

27 July 2015

Contact: Harriett Swift