Log exports; was field skills lacking?

Larry Stamm larryst at vis.bc.ca
Tue Dec 16 11:37:45 EST 1997


On Sat, 13 Dec 1997 18:20:39 -0500, Joseph Zorzin <redoak at forestmeister.com>
wrote:

>Larry Stamm wrote:
 This is a well recognized fact, and it is
>> becoming increasingly hard to import raw logs from 3rd World countries for this
>> very reason- they want those milling jobs for their own citizens.  Why should we
>> not want the same?
>> 
>
>Then what's preventing local mills from competing for the logs? If local
>mills can't compete against mills thousands of miles away, they're doing
>something wrong.

If there was a truly open and free log market, and a level playing field in
regards to other business and labour factors, this would probably be true.  But
at least in Western Canada, there is no real log market that anybody can
participate.

In British Columbia, about 95% of the working forest is owned by the Provincial
government as Crown land.  About 80% of the timber cut off of this crown land is
cut under long term tenure arrangements with the big integrated forest
companies, which supplies about 80% of the log requirements of these mills.  The
stumpage on this crown timber is set by a complicated formula that is based on
the current lumber commodity price, ease of access, and quality of timber.  The
companies can write off their road building expenses to access timber against
the stumpage, so they sometimes get the timber at the back end of a valley just
for the price of building a road into it.  So they have 80% of their log supply
guaranteed at a relatively cheap rate, and they are out scouring the country for
the other 20% of their fibre needs.

The 20% of the Crown harvest not already allocated is divided into 15% small
business (competitive) sales and 5% woodlot licenses managed by local landowners
under provincial regulation.  And there is the 5% harvest off of private lands.
The big mills actively back small logging contractors to bid and harvest a lot
of this wood at rates of up to 5 times the provincially set stumpage rate, and
average out the high cost of this wood against their lower cost tenured wood and
they can usually make a buck.  But if you are a small mill, and thus don't have
access to wood from a tenure agreement, you can't pay that high price for your
whole log supply and stay in business.  The quality of your milling operation
has no financial bearing on the viability in this case because there is not
equal access to the log supply.

A few years ago I logged a few acres of my own land, with the intention of
having some of the wood milled into lumber for my own use.  When the bids for
the rest of the wood came in, the top price offered was equivalent to
US$800/Mfbm at a time when 2x4's were less than $300.  I ended up selling all
the logs and buying lumber.

This is just one specific example of how big money has lobbied the politicians
to create very unfree trade in the name of capitalism.  There are probably many
similar examples out there, with just a few details altered.  That is why I
believe there is a role governments must play in regulating commerce to undo
some of this and actually provide the conditions of equal opportunity.

--
Larry Stamm
PO Box 561
McBride, BC V0J 2E0



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