Image for Stop the subsidies to stop the conflict

The issue of whether we can end the conflict in Tasmania’s forests has come up recently. Some people have questioned whether we can build a prosperous timber industry to provide secure jobs, and shift timber production into existing plantations.

Professional consultants apply a series of tests to such ideas prior to acting upon them. One common test for goals is whether they are realistic. For example, it could be unrealistic for an NGO to try to ‘restore trust in our democracy’ if the lack of trust was caused by politicians’ behaviours.

If we were to assess whether we can ‘build a prosperous timber industry to provide secure jobs’ we’d have to explore some difficult issues that arise when deploying scarce resources.

A Tasmanian pie

In any area of restricted or diminishing resources, how those resources are divvied up is one of the biggest political ‘hot potatoes’ imaginable. It’s a classic ‘pie division’ problem. The livelihoods, lifestyles, health, investments, hopes and aspirations of many people are bound up in how land, forests and water are used.

Supporting any single use is going to be a highly charged political issue because it will create losers. A change will punish some while advantaging others.

In Tasmania, as well as in much of Australia, there is, and has been, a major battle for forest use, that has also encompassed publicly owned resources like water. The effects have been a ‘tragedy of the commons’ (HERE) coupled with ongoing divisions that have split communities and levied significant imposts on people who must suffer whatever problems are created as a result of our favouring one particular land use.

Land use changes that serves corporate interests have been supported by both Labor and Liberal parties in Australia and Tasmania, culminating in MIS that use public monies to support the corporatisation of land by subsidising MIS interests but not others.

MIS benefits are not available to other users (e.g. small holdings), which has led to forestry interests now controlling vast tracts of land while paying hardly any rates or costs. Because monocultures of trees require over 2Ml of water per hectare per year taken from groundwater, large areas of plantation can soon drain catchments and disadvantage other water users like towns and food growers. The impacts of plantations have been, and are, many and severe.

Forestry’s advantages don’t stop with owning more land either. Plantation owners pay significantly lower rates, pay nothing for water used by trees, pay nothing for roads and bridge installation and maintenance while creating the potential for major firestorms in dry seasons. The various favours, financed by everyone else, lead inexorably to other people paying higher bills and/or suffering degradations in services/infrastructures.

The calculus of restricted resources and growing populations leads inexorably to conflicts and disadvantage when resource patterns are changed.

In other words, when we favour forestry (or anyone else) every other person, animal and plant that is reliant on those same resources risks being disadvantaged.

In a world of restricted and diminishing resources there appears to be no avoiding this reality.

Hence a proposition to assure prosperity for forestry contains within it the seeds of massive problems if any further land use changes are required, if further subsidies must be paid from the public purse or even if existing forestry land/water use turns out to present risks to others.

Growth and prosperity for a low value industry like woodchipping simply cannot be guaranteed on an island with limited resources.

Protection?

In order to protect ourselves from the severe impacts of resource use change, social groups are best advised to employ standard techniques such as independent assessment of impacts, full consultation with impacted communities, open and transparent decision making, and due process that treats everyone fairly and equally.

In Tasmania, these protections have almost all been removed or suspended by governments to favour forestry interests over all other resource users, which has now become a major issue. (HERE)

Forestry

The forest industry has clearfelled much of Tasmania’s accessible forests and has expanded its power by using MIS assistance to purchase food producing farmland for growing woods suitable mainly for pulp mill feedstock (e.g. E. Nitens plantations †).

Gunns doesn’t appear to have enough feedstock in Tasmania to support a pulp mill of world scale and they probably won’t find a venture partner unless they can guarantee continued operations. The in-stream chemical equilibria required for their mill do not lend themselves to shutting the mill down and restarting it without considerable time and expense, all of which comes off an already risky bottom line that will be supported by huge subsidies.

Accessible Tasmanian forests may only last another few years then Gunns will be forced into plantations, many of which are of very low productivity and which don’t look as though they’ll support a rotation (i.e. no harvest after first cut).

Whether there’s enough feedstock to support their ‘world scale’ ECF mill at Bell Bay is still an serious question so anything that increases the feedstock could help to justify their ‘world scale’ mill at Bell Bay or elsewhere.

Financial markets put it this way…


Industry analysts have said the purchase of the Great Southern plantations would provide synergies with Gunns’ planned $2.5 billion Bell Bay pulp mill, which the company wants to run on plantation timber in a bid to secure a funding deal with Swedish giant Sodra.  
           The Examiner

The timber industry cannot afford to grow plantations itself because it prices their inputs at over $35-$50 tonne which is too high to profit on world commodity markets. Instead, they rely on taxpayer and ‘investor’ funds picking up the costs after having set the floor price for feedstock to $15 tonne delivered, as a result of Forestry Tasmania’s wood supply agreement.

Gunns now wants governments and more ‘investors’ to pick up the costs of more land and planting of pulp mill feedstock and you can bet they won’t want to pay for the costs. That probably means taxpayers will be expected to stump up yet again.

More favours?

The industry is weak after decades of taxpayer subsidies that have only generated negative returns (approx $250 million subsidies returns a profit of $55 million) to taxpayers at the same time as demolishing our forests.

The industry has focussed on woodchips as that requires hardly any investment; all that’s needed is a chipper. Contractors pick up the rest of the tab. The fibre company just does the deals and watches the money come in.

Trying to make such an industry ‘prosperous’ and attempting to create secure jobs could easily be an impossible mission. Secure jobs could mean increased subsidies, and a prosperous industry will probably mean helping them to get more returns for our investment and guaranteeing them more resources.

When we try to guarantee the prosperity of an industry that is so reliant logging and chipping, we are likely to find that a pulp mill is the only way that our forestry industry can be ‘prosperous’.

One man’s meat…

As pointed out earlier, when we favour one group in any way with resources, we automatically disadvantage other people reliant on those resources. When we give to one, we take from others.

That is why we need wide community consultation. Why independent assessment of impacts is so vital. Why we need due process to protect people.

Good intentions and desires for a peaceful and healthy environment simply are not enough to eliminate the threats created when we support one land use over all others. If good intentions were enough then Iraq, Aboriginal Australia and our hospitals would all be in fine form right now.

In Western countries, we have come to find that markets are reasonably efficient at getting the most value from resources. Governments have disconnected our forest industries from market mechanisms, relying instead on central planning and big subsidies.

It didn’t work in the USSR, and it’s not working here.

Here’s how blogger ‘roger’ put his concerns (HERE):

There is no progress or proper outcome to “negotiations” or “compromise positions” like this (industry dialogue). It’s simply the industry winning because they’re strategically smarter than woolly-headed NGOs. With their fake community and lobby groups, the industry players know they just need to hang on and keep complaining until their demands are even half-met, because they were demanding, justifying, screaming for far more than they actually wanted or needed from the outset.

The forestry industry is already in receipt of so many favours and exemptions that they are literally a law unto themselves. They don’t have to act like everyone else, they can choke us with smoke, poison our water, surround us with fire hazard plantations, make escape from a fire impossible, threaten our lives on the road and violate the principles of natural justice by judging their own cases.
They have been exempted from the responsibilities to society that everyone else has and they are using their privileged position to demand more from the rest of us.

It’s a tragedy that well meaning and honourable organisations and people should be thrust into such a situation. The root causes of the problem include politicians and political parties not representing the wider interests of their communities and the lack of any discernable rights for Australians.

Unfortunately in that environment, well meaning actions can create serious threats when resource changes are advocated because a rapacious industry such as forestry will likely take everything that it can get and give nothing in return except a depleted environment.

Removing the cause

The forestry conflict is created by one industry wanting our forests, land and water to themselves without reservation or responsibility to the rest of us. Worse yet, they expect us to pay them to destroy our environment and threaten whole species and ecologies because those activities are not profitable without public financial support.

They want direct and indirect subsidies, authority to remove public resources for profit, exemption from laws, protection from protests, evaluate and police their own performance…and all of this while cutting down the lungs of the planet.

There seems little doubt that if the subsidies were stopped, then the destruction of our forests would also stop. The wood chipping industry would have to reduce in size and its workers would need retraining and relocation, just as happens with other industries (e.g. coal mining)

We are subsidising the wood chippers to destroy our environment and convert our food farms into pulp mill feedstock plantations just so that they can prosper and grow.

We must accept responsibility and stop subsidizing the destruction if we expect to retain Tasmania’s unique forests and rural communities.

As taxpayers, each of us has a right to comment on, and determine, how our tax monies are used.

I maintain that as long as our hospitals, schools, universities, police and other vital services are underfunded, it’s hard to see how we can afford to subsidise the clear felling of our forests, the depletion of our catchments and the conversion of food producing land to tree farms.

We all need to remember that the forest industry holds all the cards and the power because our politicians have failed to represent the community’s disparate needs and we have failed to bring them to account.

Politicians have caved in to one industry in an environment of scarce and diminishing resources.

They have left us in a vacuum of representation and support, and an awful load of trouble.

Our only defenses are determination, knowledge and principle.

Good luck to all of those fighting to correct these wrongs…

…and remember to use your vote wisely when you get a chance.

† It is possible that Nitens could be used in specialist composition timbers but there are no plans for that so far.

Mike Bolan
http://www.abetteraustralia.com

Mike
is a complex systems consultant, change facilitator and executive/management coach.

Note. The author welcomes constructive criticism and new information that adds to our understanding of these issues and rejects personal vilification as illegitimate.

To those bloggers who have asked for my agenda I support:

• Clear principles to protect communities during resource use changes including due process, community consultation and independent review.
• Ending all exemptions for forestry and reviewing all of their direct and indirect subsidies against community value delivered.
• Dialogue by which I mean the presentation of evidence for views, transparent logic and open discussion.
• In terms of forest policy, I’d recommend the ‘Out of the Forests’ directions from Now We the People (HERE) whose approaches appear to deal with most of our problems. I also support the ideas of Kim Booth regarding forestry.