Log exporters, timber products manufacturers reach 'general consensus' on way forward
Sunday, February 18th 2007
Log exporters and makers of value-added timber products yesterday took a step closer to unanimity, arriving at a "general consensus" on one of the recommendations put forward by the Guyana Forestry Commission (GFC), this newspaper has learned.
According to one of the stakeholders at the meeting, in a month's time the details for consensus, based on the consultations yesterday, will be presented to Cabinet for its consideration.
The recommendation which found favour was the first of two contained in a GFC discussion paper, presented yesterday by GFC Commissioner James Singh.
Recommendation One lists three options: A - A full ban of the export of 15 species of logs with two already having restrictions placed on them namely Locust and Crabwood from March 1, 2007. (The 15 species would be Purpleheart, Locust, Crabwood, Red Cedar, Washiba, Tonika Bean, Letterwood, Bulletwood, Cow wood, Tatabu, Kabukalli, Shibadan, Tauroniro, Hububalli, Darina). B - The banning of ten species of logs under square dimensions (dimension 8"x 8" and greater) commencing January 2008. (These species would be Purpleheart, Red Cedar, Letterwood, Crabwood, Locust, Kabukalli, Shibaban, Washiba, Hububalli, Tonka Bean). C - A 50% ban on 12 species of logs in 2008; a 75% ban in 2009 and a 100% ban in 2010. (The species here would be Greenheart, Brown Silverballi, Itikiboroballi, Determa, Wamara, Hakia, Mora, Dukali, Kereti Silverballi, Wallaba, Fukadi, Futui).
Recommendation Two puts forward the banning of exports of the 15 species in Option A, Recommendation One from January 2008 or that the ten species under Option B (describing the dimensions that should not be exported) should commence from 2009 instead of January 2008. The third part of Recommendation Two is the same is Option C in Recommendation One.
The discussion paper was agreed upon by stakeholders as a basis for the discussions, since over a month of meetings under a Ministerial Committee, chaired by the GFC Board of Directors and participated by the Forest Products Association (FPA) and the Guyana Manufacturers' Services Association (GMSA) last year, failed to bring a common consensus.
Yesterday's discussions came after years of dissatisfaction by the manufacturers of value-added timber products, in relation to adequate supply of logs, while log exporters contend that local manufacturers are not willing to pay the price for logs.
But even as the debate raged the contribution of the forest sector to the national economy was growing. Agriculture Minister Robert Persaud, in his opening remarks, said the sector continued to grow despite the challenges, both internally and externally. He said that in 2006, export sales from forestry were US$58.7 million compared to US$48.6 million in 2005, an increase of 20.8%.
"The government of Guyana remains committed to enhancing economic, social and ecological benefits through increased operational efficiency," the minister said, including, "improved quality and volume of value-added and non-timber forest products and better environmental stewardship.
"Clearly, there is a need to articulate a policy position based on sustaining growth while at the same time arriving at a consensus position on short-, medium- and long-term actions to expand the benefit stream from forest industries."
Prime Minister Samuel Hinds stressed that Guyana could not sell its timber among the 745,000 people here, but must have linkages with Guyanese and foreigners to develop overseas markets.
Hinds lauded as a great achievement the fact that the stakeholders could gather peacefully to discuss the formation of a log export policy.
"We will not get anywhere with just selling our wood products here in Guyana." Hinds also pointed out that he has learnt that when changes are taking place anxieties develop and this may explain the friction that log exports have created.
Hinds said he certainly wanted a maximizing and utilization of logs in Guyana, but it must be profitable for everyone.
"I think that persons will come toward a middle ground," Singh said in an interview during a break in the discussions at Regency Suites, Hadfield Street.
A ban or restriction Singh said would have positive impacts on export revenue and the forest sector's Gross Domestic Product (GDP).
A case in support of this was also noted, where in 2000, locust and crabwood were restricted in export of log form. Following this restriction, there has been a steady growth from 2000 to 2006 in both volume and value of sawn wood exported. Volume increased by approximately 719% and value increased by 929%. Based on last year figures it was estimated that an additional US$9 million ($1.8 billion) would have been earned, if exported logs were converted into lumber.
In Singh's presentation it was also noted that the shipping agencies have the capacity to export this additional lumber. Information from the shipping agencies suggest that they can ship 10,000m3 of sawn lumber monthly using 500 containers to destinations like, Asia, Europe and North America.
FPA President David Persaud was not optimistic about an agreement yesterday, since his association did not support the two recommendations and had its own recommendation, which is to restrict the volume of log exports to 50% effective 2009 and increase this by 10% for each year thereafter.
Persaud told Stabroek News in an interview before the consensus that there was not enough capacity to process the excess logs if they are not exported. During his presentation of the recommendations Singh had said that the milling capacity was adequate to process the extra logs if a ban was instituted.
Persaud noted that of the logs produced 50% were used here and the remaining 50% exported.
"FPA after reviewing the GFC's Option One and Option Two does not accept the position taken by the GFC, since the presentation is flawed with errors and impinge on the terms and conditions of the Timber Licenses and Foreign Direct Investment," Persaud said.
The consequences of implementing either of the two options Persaud said would be a sharp fall in primary production, increased production cost, retrenchment, closure and possible bankruptcy of companies and revenue loss to the economy.
In 2006, the FPA noted that the situation showed that 119,000 m3 of logs was processed into sawn lumber. "It then cannot be expected that in 2007/2008 and subsequent few years, the milling capability and capacity can increase to 504,000m3 of logs input," Persaud said.
"The other issue beyond the capacities of the stakeholders to comprehend is the question of logistical movements to handle the surge of volume of processed lumber as it is expected that most of these shall be shipped in containers."
George Robinson, president of the GMSA, in his opening presentation said the paper satisfactorily addressed the concerns raised by the GMSA in a letter to President Bharrat Jagdeo late last year. In that letter Robinson said the association told the President that the shortage of sawn lumber had reached crisis level affecting producers of value-added timber products; that the prices of sawn lumber did not seemed justified and that log exports were increasing.
StabroekNews
Sunday, February 18, 2007
Saturday, February 17, 2007
Logging in the Philippines - Video
Logging disaster in the Philippines - Click link below to view video
Timber producers operating inefficiently
Our timber producers have been operating inefficiently for years
Saturday, February 17th 2007
Dear Editor,
I find the report in which the Forest Producers Association (FPA) complained about job losses to be incurred by a proposed log export ban extremely misleading ("Timber harvesting practices of forest producers under unfair attack" -Stabroek Business, February 9, 2007). When in their haste to turn to, as they pointed out quite categorically in meetings between the FPA, Guyana Manufacturers and Services Association (GMSA) and the Office of the Prime Minister, the more profitable activity of wholesale log exports, they never even considered all the people that they themselves laid off from the now silent sawmills, or the fact that they decimated the local value added sector to the extent that it is running at less than 50% of its capacity with the concurrent loss of jobs that entailed. What about those workers who numbered in the thousands and why the concern now! Methinks it is about profit and not sudden piety. They said in discussions about a Purpleheart log ban in 2004 that they needed to export logs to be able to recapitalize their mills - here again we hear the same drumroll over 3 years later. We were told that they needed to export the prime Purpleheart logs as a means to sell lesser used species, yet Purpleheart, which represents less than 1 % of our commercially harvested species in the forests represented 30.4% of log exports in 2005 and the known species 93% of all log exports - whither the lesser known species!!
As to the labelling of chainsaw operators as all being "illegal" and raiding concessions, this is as a direct result of the exponential growth in log exports that has crippled the local value added sector. Most of the chainsaw operators are consigned to small State Forest Permissions that have either been worked out already or are in areas of low stocking density, certainly not in the prime forests in Essequibo occupied by the large concessionaires. As a consequence they have very little of the prime species in their areas. As to questions of illegality, the cost of being legal for a chainsaw operator represents less than 5% of their cost of production, so clearly the question of illegal operations has more to do with equitable access to forest resources than with trying to avoid paying the low royalties and acreage fees. As to following the Code of Practice, most chainsaw operators are given lands in forest already worked out or in conversion forest areas - in the Makouria area during the FRP chainsaw logging Conversion study we were only able to find seven trees in a 5 hectare area and that of species I had never even heard of. In addition the two year tenure for SFP's actively encourages unsustainable practices as the concessionaire doesn't know if their concession will be renewed, so they try to get the "mostest the fastest." I know personally of many instances of illegality by large concessionaires who have jumped boundaries of other concessions - there is the present illegality of subletting of TSAs, WCLs and SFPs that is in breach of clause 13 of the 1953 Forests Act and the terms of the award of these Concessions. Also, there have been many instances of large concessionaires jumping boundaries (I personally know of one that required the intervention of the late President Dr. Cheddi Jagan to seek resolution for an SFP holder against a TSA holder) - the only difference is that the small chainsaw loggers have no contacts or voice on the GFC board for these issues to be dealt with. The "big boys" have their own issues quietly dealt with, but just because you don't hear about it don't feel it isn't happening.
In addition in a study done in early 2006 it was found that the chainsaws were actually achieving higher recovery rates than two of the better (bandmill operations) sawmills operating in Guyana - 44% vs 36% cutting 1 and 2 inch thick material. For any sawmill to operate at that level is absolute madness and for them to complain of high extraction, sawing and operational costs whilst maintaining such atrocious cutting standards that would be unacceptable in the international market is nothing short of abject negligence. To have maintained this for decades makes their position of asking for more time even more untenable.
For them to expect the GMSA members to subsidise such wanton inefficiency by paying the so called "market" price for the logs or lumber is to expose the membership of the GMSA to economic suicde.
The same vilified chainsaw operators are the ones that pay nearly half the revenues of the GFC on 21% of the allocated forested lands (and from the least productive lands), receive no outside fiscal, tax or concessionary developmental aid, and are the largest employers in the forestry sector -they employ in excess of 70% of the workers in the forestry sector and all Guyanese. They are also not allowed to be in arrears to the GFC as removal permits and tags are withheld - large concessionaires are still indebted to the GFC for over US$1 million and are still allowed to work.
In addition their contribution to rural livelihoods, especially to the most depressed and exposed interior communities has been proven in the recently concluded FRP Socio-economic study where it was found that at a minimum 70% of the sale price of the lumber returns to the source community. When that is calculated against declared chainsaw lumber production it exceeds G$1 billion. In addition it is the chainsaw logger that wants to upgrade and improve productivity, recovery and quality by moving to portable mills, adding value and improving quality, but the conditions are stacked against them as they have no collateral (SFPs are only for two years and are therefore not acceptable as collateral by banks) and limited access to financing. They therefore tend to be stuck in a cycle that it is difficult to break out of given the limited profit margins available on the species they have in their concessions. On the other hand if they had well stocked concessions with the prime species the story would be a different one. Given their lower costs of production due to the portability of their technology (costs are ½ to 1/3 that of traditional log extraction static mill methods) they would have been able to generate considerable profits to finance themselves from their own cash flow. As it is they are forced to eke out an existence on marginal species on poorly stocked lands, whilst others ship out our prime logs at an exponential rate exporting what is a non renewable resource, our jobs and our future with wilful abandon.
Log exports-
2004 - 61,000 metre cube = 24,000 trees
2005 - 115,000 metre cube = 46,000 trees
2006 - 190,000 metre cube = 76,000 trees
Average log size per tree = 2.5 metre cube.
I leave you the general public to draw your own opinion who is worthy of your vote.
For those who suggested to me that I have written or been writing under different names over the past few months in the letter columns on log exports please note whose name stands below here - the facts of the matter speak for themselves so there is no need to hide behind pen names.
Yours faithfully,
Andrew Mendes
Stabroek News
Saturday, February 17th 2007
Dear Editor,
I find the report in which the Forest Producers Association (FPA) complained about job losses to be incurred by a proposed log export ban extremely misleading ("Timber harvesting practices of forest producers under unfair attack" -Stabroek Business, February 9, 2007). When in their haste to turn to, as they pointed out quite categorically in meetings between the FPA, Guyana Manufacturers and Services Association (GMSA) and the Office of the Prime Minister, the more profitable activity of wholesale log exports, they never even considered all the people that they themselves laid off from the now silent sawmills, or the fact that they decimated the local value added sector to the extent that it is running at less than 50% of its capacity with the concurrent loss of jobs that entailed. What about those workers who numbered in the thousands and why the concern now! Methinks it is about profit and not sudden piety. They said in discussions about a Purpleheart log ban in 2004 that they needed to export logs to be able to recapitalize their mills - here again we hear the same drumroll over 3 years later. We were told that they needed to export the prime Purpleheart logs as a means to sell lesser used species, yet Purpleheart, which represents less than 1 % of our commercially harvested species in the forests represented 30.4% of log exports in 2005 and the known species 93% of all log exports - whither the lesser known species!!
As to the labelling of chainsaw operators as all being "illegal" and raiding concessions, this is as a direct result of the exponential growth in log exports that has crippled the local value added sector. Most of the chainsaw operators are consigned to small State Forest Permissions that have either been worked out already or are in areas of low stocking density, certainly not in the prime forests in Essequibo occupied by the large concessionaires. As a consequence they have very little of the prime species in their areas. As to questions of illegality, the cost of being legal for a chainsaw operator represents less than 5% of their cost of production, so clearly the question of illegal operations has more to do with equitable access to forest resources than with trying to avoid paying the low royalties and acreage fees. As to following the Code of Practice, most chainsaw operators are given lands in forest already worked out or in conversion forest areas - in the Makouria area during the FRP chainsaw logging Conversion study we were only able to find seven trees in a 5 hectare area and that of species I had never even heard of. In addition the two year tenure for SFP's actively encourages unsustainable practices as the concessionaire doesn't know if their concession will be renewed, so they try to get the "mostest the fastest." I know personally of many instances of illegality by large concessionaires who have jumped boundaries of other concessions - there is the present illegality of subletting of TSAs, WCLs and SFPs that is in breach of clause 13 of the 1953 Forests Act and the terms of the award of these Concessions. Also, there have been many instances of large concessionaires jumping boundaries (I personally know of one that required the intervention of the late President Dr. Cheddi Jagan to seek resolution for an SFP holder against a TSA holder) - the only difference is that the small chainsaw loggers have no contacts or voice on the GFC board for these issues to be dealt with. The "big boys" have their own issues quietly dealt with, but just because you don't hear about it don't feel it isn't happening.
In addition in a study done in early 2006 it was found that the chainsaws were actually achieving higher recovery rates than two of the better (bandmill operations) sawmills operating in Guyana - 44% vs 36% cutting 1 and 2 inch thick material. For any sawmill to operate at that level is absolute madness and for them to complain of high extraction, sawing and operational costs whilst maintaining such atrocious cutting standards that would be unacceptable in the international market is nothing short of abject negligence. To have maintained this for decades makes their position of asking for more time even more untenable.
For them to expect the GMSA members to subsidise such wanton inefficiency by paying the so called "market" price for the logs or lumber is to expose the membership of the GMSA to economic suicde.
The same vilified chainsaw operators are the ones that pay nearly half the revenues of the GFC on 21% of the allocated forested lands (and from the least productive lands), receive no outside fiscal, tax or concessionary developmental aid, and are the largest employers in the forestry sector -they employ in excess of 70% of the workers in the forestry sector and all Guyanese. They are also not allowed to be in arrears to the GFC as removal permits and tags are withheld - large concessionaires are still indebted to the GFC for over US$1 million and are still allowed to work.
In addition their contribution to rural livelihoods, especially to the most depressed and exposed interior communities has been proven in the recently concluded FRP Socio-economic study where it was found that at a minimum 70% of the sale price of the lumber returns to the source community. When that is calculated against declared chainsaw lumber production it exceeds G$1 billion. In addition it is the chainsaw logger that wants to upgrade and improve productivity, recovery and quality by moving to portable mills, adding value and improving quality, but the conditions are stacked against them as they have no collateral (SFPs are only for two years and are therefore not acceptable as collateral by banks) and limited access to financing. They therefore tend to be stuck in a cycle that it is difficult to break out of given the limited profit margins available on the species they have in their concessions. On the other hand if they had well stocked concessions with the prime species the story would be a different one. Given their lower costs of production due to the portability of their technology (costs are ½ to 1/3 that of traditional log extraction static mill methods) they would have been able to generate considerable profits to finance themselves from their own cash flow. As it is they are forced to eke out an existence on marginal species on poorly stocked lands, whilst others ship out our prime logs at an exponential rate exporting what is a non renewable resource, our jobs and our future with wilful abandon.
Log exports-
2004 - 61,000 metre cube = 24,000 trees
2005 - 115,000 metre cube = 46,000 trees
2006 - 190,000 metre cube = 76,000 trees
Average log size per tree = 2.5 metre cube.
I leave you the general public to draw your own opinion who is worthy of your vote.
For those who suggested to me that I have written or been writing under different names over the past few months in the letter columns on log exports please note whose name stands below here - the facts of the matter speak for themselves so there is no need to hide behind pen names.
Yours faithfully,
Andrew Mendes
Stabroek News
Friday, February 16, 2007
1992 Guyana Camel Trophy
http://www.youtube.com/watch?v=sfxd-XeuFzw&eurl=http%3A%2F%2Fguyanaforestry%2Eblogspot%2Ecom%2F2007%2F02%2F1992%2Dguyana%2Dcamel%2Dtrophy%2Ehtml
Guyana's Natural unspoilt beauty can be seen in this adventure video
Stop the exportation
Stop the exportation
Kaieteur News, 14 February 2007
Dear Editor,
The discussions that have been taking place in your column on the
forestry sector have been most interesting for several reasons.
In the first instant it is crazy for the government to continue the
exportation of logs. The reasons are not all too difficult to see. The
argument that Guyana would earn more money from value added products
such as dress materials, parquet floors, doors, furniture and so on.
The job creation that such activities would create is obvious.
Government should ban the exportation of logs because it would be
economical to do so. By this I mean that if logs export is banned then
we will be able to attract investment to do the value added here.
Everyone who has some idea about forestry will tell you that the forest
management in Guyana is very poor.
If the Forestry Commission is claiming otherwise then I wish to contend
that they do not visit the areas where logging takes place or they just
do not care.
A visit to Barama operations, particularly the operations on grants
that they have sub-leased, would show the major threats being posed to
our forests. This is true in many areas as well.
I have never heard any official of the Forestry Commission or a
government official speaking about re-forestation. There must be a
programme to replant the forest to allow our country to keep on earning
bigger bucks from forestry while preserving some of our natural forest.
Why does it appear that no one is thinking about this?
I am of the view that all stakeholders should-get together and map out
a proper strategy for our forest.
Edward Clarke
Kaieteur News, 14 February 2007
Dear Editor,
The discussions that have been taking place in your column on the
forestry sector have been most interesting for several reasons.
In the first instant it is crazy for the government to continue the
exportation of logs. The reasons are not all too difficult to see. The
argument that Guyana would earn more money from value added products
such as dress materials, parquet floors, doors, furniture and so on.
The job creation that such activities would create is obvious.
Government should ban the exportation of logs because it would be
economical to do so. By this I mean that if logs export is banned then
we will be able to attract investment to do the value added here.
Everyone who has some idea about forestry will tell you that the forest
management in Guyana is very poor.
If the Forestry Commission is claiming otherwise then I wish to contend
that they do not visit the areas where logging takes place or they just
do not care.
A visit to Barama operations, particularly the operations on grants
that they have sub-leased, would show the major threats being posed to
our forests. This is true in many areas as well.
I have never heard any official of the Forestry Commission or a
government official speaking about re-forestation. There must be a
programme to replant the forest to allow our country to keep on earning
bigger bucks from forestry while preserving some of our natural forest.
Why does it appear that no one is thinking about this?
I am of the view that all stakeholders should-get together and map out
a proper strategy for our forest.
Edward Clarke
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