Wednesday, August 27, 2014

Forestry Renaissance Part 3

This evening on the news we were treated to the new Tasmanian Minister for the Forest Renaissance gloating about the vote in the Upper House; 9 to 5 to end the forest peace deal and turn the Green Tide. MLC Rob Valentine has been nice enough to respond to an email in which I had touted this blog and asked if I thought that it might be possible to log minor species sustainably over a long period, like perhaps a three or four hundred year rotation.
Of course I don't know what the government has in mind and would hate to be inadvertently numbered amongst their supporters on this issue. But here is my answer.

 I know a number of people on the fringes of the industry - Chris Searle at Stanley (now retired), Frank Strie in the Lilydale area who must be close to that and there are others who really care about the larger questions of sustainability and what we are leaving for the future. All of us imagined that somehow we could make positive changes by demonstrating that high value products were worth more than volumes of low grade industrial feedstock in competition with every other desperate regime hacking out whatever resources came to hand and selling them for bottom dollar on world markets. We all agreed that a long rotation system was hypothetically possible.

But as to whether it could happen in a political sense is doubtful. This is about humanity rather than science, economics or even general accounting practice. We have the documented history of Roman times and it was just the same. They had a burgeoning underclass that wanted bread and circuses and didn't care what happened so long as they got it. Long before that Aristotle had noticed that the soils of Greece were slipping into the sea due to forestry and farming practices. The island of Cypress was named after the dominant forest species that was being hacked down to build the commercial and military navies of the time. It was light, and filled with volatile oils that gave it resistance to shipworms and it has been gone long before the historical Renaissance.  Italy and to a lesser extent Greece still have rich farmland in the flat country and volcanic areas thanks to EU subsidies that pay for fertilizer. But generally we have been there too long and its all pretty poor. Cypress is bare and fit for little beside olive trees and marginal grazing for sheep and goats, but the Turks and Greeks are still willing to shed blood over it although their green tide turned and went out a thousand years ago.

Several years ago at a clearing sale I ran into Terry (Snow) Turner who had been North Forest's logging foreman on the Surrey Hills freehold. We shook hands and he shook his head and said, "You were right. It's all gone and I never would have believed it."

Well its not quite gone, the receivers have found a buyer who thinks they can make a bob from exporting woodchips now that the plantations are in place. Its almost like native forest in that regard, they get to reap what they never had to sow. But I remember seeing fifty thousand tonnes of pure red myrtle logs going off over three months as an experimental shipment to see if it would make decent cardboard boxes. The logs weren't smooth enough to woodchip without including bark and there was a lot of rot as it was very old. I also had another experience in which I had organized a load of blackwood sawlogs (by cutting off some pulpwood butts) and was refused same by the logging foreman on that basis; that they were sawlogs. I went to see Nick Sherry to complain that the company was woodchipping sawlogs which was illegal.

"We know that," he said,

"What are you going to do about it?"


I sent some photos of loaded railcars to Robert Bell who tabled them in Parliament; the bona fides of which were denied by Robert Rae. And now it is imperative that new country be opened and exploited to replace what we have lost to stupidity. To be fair only 10 or 15% of that myrtle would have been recoverable as flitches then, perhaps 20% now as shortages have brought down standards. And not too long after Robert Bell was dead. So the 'green tide' has been going out here for some time.

And Chris Searle in his own efforts had spoken to the media about the value of burl myrtle veneer; he was retailing it at 40 thousand dollars a cubic metre. I had been cutting the odd veneer flitch from exceptional wood whenever it came my way but the quality I was looking for was pretty rare, certainly not worth spending your time on solely. Because for people like us the economics were still lousy. It would cost almost half that money to have it sliced at the Somerset veneer mill. If it didn't come off perfectly it was unsaleable at those higher rates but you still had to pay and it was a thin market, especially being a red timber. Doing much of it meant a horrendous outlay for inventory you had no certainty of moving. But lower grade material and offcuts were saleable as turning blocks at $1000 per tonne (cubic metre). This is about the same as sawn green blackwood at the time, and although there was a lot of work involved you could cut a lot out of stumps or big logs in a day on the chainsaw.
I spoke to Brian Hayes, North's logging superintendent and offered $100 per tonne to select the stuff and he said “Oh no. That would imply it has value.” So we agreed I was to pay a royalty of $20. I was already paying veneer rates to contractors to select and load stuff for me; and there were still haulage costs on top. And so we had a gentleman's agreement and I went over to America and drove down the west coast to check out the veneer industry and drum up some business.

Canada had just signed the North American Free Trade Agreement, NAFTAA. It was the kind of thing that puts dollar signs in the eyes of fools and quislings. But within months the big American forest giant Weyerhauser was suing and Canadian timber products were being held up on the basis of unfair trading advantages, to wit Canadian stumpage rates (royalties) were lower than rates in the US. So Western Canada's major forest corporation MacMillan Bloedel was hamstrung. After this had dragged on a few years, MacBlo had suffered enough and was a bargain. It was swallowed by guess who. Unless you are pretty dumb you will have guessed Weyerhauser.

But driving through the US opened my eyes on a related facet. Motor fuel was only a fraction of the price it was in Canada and this was because of (once again) an excise tax differential. And this constituted a trading advantage not only on timber products of which it is a substantial impost, but for every American product every step of the way.

And if you are pretty dumb about the dynamics of power you might suppose the Canadians even raised the issue.  There was a peripheral lawsuit related to motor fuel but it was simply a damages claim – Canada had banned a noxious gasoline additive that was contaminating ground water via leakages and spills and the American producer wanted compensation.

On my return I was informed that North Forests was going to veneer burl myrtle themselves and I couldn't have any after all unless it had been rejected by the guy from the veneer mill. And they produced a very large quantity – they were slicing anything dark red that had a few deep burl spots on it.

But .6 mil veneer on a chipboard substrate is hardly the sort of material that makes lasting high end products. A lot went into flavour-of -the-month architectural concept work. I even used a bit myself later when I was working in Sydney and put together the bar in the new gambling development downstairs at the Concordia (German) Club in Stanmore. Which is now defunct and boarded and you don't hear any more about burl myrtle than German-Australian relations. The war vets with grudges had gone broke or died and the veneer price had crashed.

I did find a customer for turning blanks in Seattle. Chris and I collaborated on a shipment (mostly burl myrtle) which was lost on the Melbourne dock for some months and then I received notice from the US that it was going to be confiscated at its destination because of some detail in the bill of lading which I managed to fix up. When it arrived (green waxed blocks) it was all covered in black mold which they cleaned up and said it was the best shipment that they had ever received but not what they had expected. Could I send samples of something else?

Despite the specialness of our special timbers they aren't really special to anyone else.  And the human tide is flattening the primary forests of the world, 90% is gone now, mostly within my lifetime.  As the Amazon is converted to short-lived cattle operations, subsidized by clearing the timber, the same thing is happening in Indonesia for palm oil, Africa for drying tobacco and subsistence crops like sago, and the international market in morally dubious luxury materials is booming.  Beside my burl myrtle blocks in Seattle sit a smorgasbord of things like wenge, bubinga, cocobolo, teak, mahogany, ebony, zebrawood and for my counterparts in the source countries, a thousand dollars a tonne is a small fortune.  Men will kill you for that so its pretty hard to protect.  And there is a worm in the minds of our species, which goes beyond supply and demand - scarcity actually exacerbates demand for reasons of social display.  The demand for prestige sells the most ordinary crap from art to abalone, shoes and handbags on the grounds of little more than that it is already expensive and is recognizable as such to most of us who my son tells me are referred to in alternative circles as 'brand whores'.

There was a special timber poaching problem here twenty years ago.  Even now they are cutting down nearly worthless nesting trees for orange bellied parrots just for firewood.  All you need is vehicle access and anything becomes worthwhile if you are on a pension with time on your hands.  So if you open up areas with the best of intentions and provide a legal but restricted  (and thereby expensive) market in which the illegal product can seamlessly disappear extinction will subsidize itself.

Some time after the burl myrtle business when the satellite chip mill was finished, North Forests kicked all of us off the freehold right down to the firewood cutters who had refused an offer to fill containers on low contract rates for the Melbourne market. Reportable earnings would have been the final straw anyway as far as they were concerned. Some months later I was offered the opportunity to continue if I wanted to match the highest bidder which much higher than crown millers get charged for sawlogs. And my business would be more successful if I learned to keep my mouth shut. I chose neither option.

Then North merged with Gunns and kept all the headkickers in a final winnowing out of the decent. After that the story is near enough in time that everyone can remember, a pyramid of taxpayer- subsidized plantation development and subsequent failure that ended for the same reasons it had for so many of their over-leveraged contractors.  And this is the story of the privatized and profitable part of the industry. The publicly owned, loss-making socialized bit that is Forestry Tasmania has once again been given a 'get out of jail free' card. As did the Gunns CEO who sold out of millions of dollars worth of shares on privileged company information before it was public -nearly free anyway and he didn't do jail time thanks to his infirmities. 

Nevertheless John Gay has been allowed to continue as a director of the family's veneer business. As Brian Green apologetically explained, he is making all those jobs. So I presume he isn't out there himself; cutting veneer flitches from the unwanted rubbish that was supposed to be the province of the woodchip industry and humping the stuff out on his back.

So I have this residual sadness; like when I asked my son if I could be his friend on Facebook.

"Maybe I don't want you to know what I am getting up to,” he said.

"How would you like it if I slashed my wrists," I answered. "For that kind of a knockback by people you love its de rigueur."

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