The Regional Forests Agreement signed in 1997 recognised that there were significant areas with high value conservation forest values on private land. One of the outcomes of the RFA was the introduction of the voluntary CAR reserve system to protect these areas.
At the time, independent assessment put the value of these privately owned areas at $300 million but the government allocated only $50 million to fund acquisitions.
While clearly inadequate, this was the first and only time that there has been any actual compensation for the hundreds of millions of dollars of direct income and reduced asset value that private forest owners have suffered as a result of decisions made about the public forest estate that have had inevitable flow-on effects for them.
To receive a one-off payment as a CAR reserve, a private forest area had to meet these values:
• Comprehensive - covering the full range of different forest communities
• Adequate - with areas large enough to sustain, in the long-term, the survival of animal and plant populations
• Representative - reflecting the diversity of life in the forest.
One of our farmers offered a 299 ha parcel of mainly forested land in the north-east for inclusion in the CAR scheme but it was ultimately rejected. He has subsequently done an assessment based on real costs and historical returns for all land management options for that block. It makes salutary reading.
If his parcel of land had been approved as a CAR reserve, he would have received a one-off payment of $61,500. And he would have needed to manage that land in perpetuity for no further return: pay the rates and the mortgage; keep the fences in good order; manage weeds and pests; and institute appropriate fire control measures.
However, in the event, he managed the forest for timber production and other farm enterprise activities. Over a 35-year period, he estimates he would have received $2.6 million for the regenerated timber he harvested, income from meat production (cattle grazing and sheltering in forested areas), created 20 man-year jobs and produced sawmill timber and pulpwood with a processed value of $13.1 million.
Private Forests Tasmania is a statutory body that collects a levy of $15 per hectare on private forest areas approved for harvesting under forest practices plans. It has recently provided up-to-date data on levy collections that shows private forest activities have fallen off a cliff in the last two years. In 2008/9, before the current forestry discussions, PFT levies amounted to $465,831; in 2011/12, it is estimated that the levies will be around $40,000. Next year, the expectation is that this amount will fall even further. This means that there will be almost no contribution to farm incomes from forest enterprises.
I cite this data because it demonstrates the significant economic cost to farmers (and to the state economy) of depriving private foresters of the ability to manage their own land in an environment of such uncertainty.
This is why we have been arguing that, despite what everyone else has been saying, the current IGA will impact financially on private foresters.
Yet these foresters have no seat at the table that seeks to put numbers in proposed state government legislation to enact the intergovernmental forestry agreement with the Australian Government. Though the talks are ostensibly about the future use of Tasmania’s public forests, any outcome will have profound effects on the market for private forest products from here.
To use a Warren Buffett expression, it means we have ‘skin’ in this game - we have money riding on the decision. Yet we have no say. The state government and Forestry Tasmania, which also our money invested in the game, also have no say. Yet those who sit around the peace table largely have no skin in the game, apart from their own jobs – and they have received significant amounts of compensation.
Is it any wonder then that those sitting outside the tent remain pessimistic of an outcome that will be acceptable to anyone other than the players inside the tent?
Essentially farmers and private foresters are not opposed to an agreement being reached. The theory is sound but the process has been flawed because those with skin at stake have not been heard, and those with no personal investment at stake are playing out the game.
We need a lasting peace agreement in our forests because it might enable us all to look to the future, instead of being mired in the past. It might also open the doors for future investment in the industry. There is a chance for a new look and sustainable forest industry to be established if agreement can be reached with the major conservation groups who carry weight internationally. Without an agreement, those who would bring the industry completely to its knees will resume their flights to Asia and Europe to kill our markets; the dark greens will continue to oppose opportunities for new products such as biomass and biofuels. I suppose we are always going to have the ratbags on the side, but the major groups can help to marginalise them.
The tragedy for the private forest owners is that not only have they lost significant income over recent years as a result of the ongoing battles, they have effectively had considerable asset value stolen from them with no compensation. No other section of the community would have accepted such an outcome.
The tragedy for all of us is that this situation is a reflection of the ‘closed for business’, NIMBY attitude that is impacting so significantly on our economy and on the well being of all Tasmanians.
The resilience of our farmers is, however, reflected in a comment that the farmer mentioned above made to me recently when we were once again despairing the lack of visionary leadership over this situation. In edited version, he said:
“The trees don’t know this battle is going on. They will continue to grow no matter what happens and, in time, perhaps people will come to their senses.”
First published: 2012-06-16 11:07 AM