Forests sell for $2.50 a tonne

Last year almost a third of the native forest logs that came from East Gippsland was sold to the Geelong-based export woodchipper Midway. The state-owned logging enterprise, VicForests, sold them as dirt cheap, low-grade pulp logs.

The Victorian Government has undermined its own forests policy that says public forest logs must be sold so that a commercial return is made to the state (and the owners – you and I). By selling off native hardwood timbers for as little as $2.50 a tonne, while plantation companies have to sell the same quality log for between $38-60 a tonne, the government is also breaking the ACCC rules. This states that a government body must not undercut the price private businesses sell a product for.

Dr Judith Ajani, forest economist and author of The Forest Wars, said VicForests behaviour in East Gippsland harmed the commercial plantation industry. She said a hardwood plantation grower can’t survive with less than $38 per tonne for pulp logs but VicForests undercuts this drastically by heavily subsidising the cost of logging native forests. Plantation companies would survive better if they didn’t have competition from VicForests which sells hundreds of thousands of tones of native forests at give-away prices.

Midways also owns eucalypt plantations but prefer to buy their native forest woodchip logs from the government because they are so much cheaper. They then sell them on to Nippon Paper which ship them to Japan.

In the past, EEG exposed the government for selling public forest logs for 9c-11c a tonne royalty in the 1990s and early 2000s. $2.50 is hardly a decent price increase when we consider the forests value as water producers, air purifiers, carbon stores and biodiversity arks. A truckload of forest sells for the price of a counter lunch.

VicForests said the reason they sold the wood so cheaply was because the pulp logs were left-overs from cutting down trees for sawn timber “combined with some high-quality pulpwood such as Mountain Ash”. This quality flooring and timber furniture would sell for $60 a tonne minimum as saw logs but is going for the price of a cup of tea when sold as pulpwood. The woodchippers prefer the white straight clean fibers that the Ash has.

Jill/The Age 5.4.09/ VicForests’ statement to a Parliamentary Committee

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