If ever confirmation was needed we are governed by idiots then look no further than a recommendation of the Ferguson Review of the Tasmanian Private Hardwood Plantation Estate.
After what was little more than a school project trying to determine the extent of private hardwood plantations in Tasmania and describing the problems that have arisen in unravelling the complexities of MIS schemes the review panel concluded, inter alia, we should “promote ongoing expansion of the plantation estate by revisiting incentive schemes”.
Nowhere in the entire report is there any mention of dollars.
The reviewers concluded further assistance to the plantation industry was needed without any reference to any dollar figures?
It’s not unusual to see recommendations based on false assumptions and sophist arguments leading to erroneous often predetermined conclusions but Martin Ferguson and his fellow reviewers, Tom Fisk from Private Forests Tasmania, Jan Davis from TFGA and Norm McIlfatrick, secretary of the Department of Infrastructure, Energy and Resources take the cake.
The review terms of reference included developing “options for enhancing the value of the hardwood plantation resource for the owners of the resource and the community generally; and.......implementation steps for a preferred option(s)”.
How is it possible to look at the value of hardwood plantations without detailing costs, yields and revenue?
The reviewers lamented the passing of MIS which they asserted “....is basically a good model” although they conceded “it has been too contaminated by recent events to have a place in the foreseeable future in promoting the expansion of the hardwood plantation estate.”
Not only did the reviewers fail to give any reasons whatsoever why an expanded hardwood plantation estate is considered desirable public policy, they offered no analysis at all as to why MIS was a “good model”. It’s as dumb a statement as I’ve seen when 90% of growers’ funds of around $5 billion across Australia have been lost and government subsidies by way of tax revenue forgone close to $2 billion. The plantation estate subsidised by our tax dollars is being sold at distressed prices to Canadian pension funds. Always a sign of a good model.
The review was released by Minister Green who said “the report found Tasmania had about 236,000 hectares of hardwood plantations, of which 177,000 hectares are on private land...........Potentially these private plantations, could sustainably produce up to 3 million tonnes of wood each year........... and will underpin any future investment in a pulp mill.”
The review did not investigate harvest volumes simply repeated hearsay that the harvest from the total plantation estate could peak at around 2.5 to 3.0 million cubic metres per annum, provided owners and growers kept lining up for more, even expanding the plantation estate to make up for unviable and failed areas.
Minister Green used the word ’potentially’. Potentially we could all fly to the moon.
It’s a far cry for the repeated implication that the necessary resource is ready and waiting for a pulp mill investor.
Upwards of 5 million cubic metres are needed each year just for the pulp mill. The nearest extra resource is in the Green Triangle and much of that has just been sold to New Forests.
Every opportunity Giddings, Green, Hodgman and Gutwein get, they spruik the mill---a mill without a social license, without finance, without enough feedstock, and currently, without an owner.
It’s a conspiracy against the electorate. Offer false hopes. Just talk about anything except the disastrous budgetary situation with $900 million missing from special deposit and trust fund accounts, where the government’s fiscal strategies are unachievable and the opposition simply offers a few slogans, a cut and paste but no serious or meaningful alternatives. Anything to distract the masses.
The Pitt & Sherry study for the Independent Verification Group in Feb 2012 estimated production from the current hardwood plantation estate would peak at 2.5 million cubic metres per annum in 10 years time. Hence it is not clear as to the source of the hearsay which stretched possible yearly production out to 3 million cubic metres.
The Pitt & Sherry study used data from DAFF as administrative and time constraints prevented access to Private Forests Tasmania’s datasets. The data suggested private plantations at December 2010 totalled 193,000 hectares.
The currents review found the private plantation estate at 177,000 hectares. The reduction in area didn’t deter the reviewers from increasing peak production from the existing estate.
It’s interesting to look a little closer at the assessed private estate of 177,000 hectares as set out in the following table:
It’s a pretty dodgy table as Blind Freddie the remedial grade sixer can see...... the cross-adds are wrong. But let’s assume the total is correct. The amounts highlighted in red are what’s growing on crown land, 21,000 hectares.
The reviewers stated the total hardwood plantation estate in Tasmania was 236,000 hectares based on ABARE figures. If private plantations are 177,000, the public plantation estate must be 59,000 hectares.
Forestry Tasmania produces data tables as part of its annual report each year. Plantation details from FT’s latest annual report are contained in the following table:
As is highlighted in red, joint venture and private plantations on crown land are 7,000 and 14,000 (approx) hectares respectively which roughly reconciles with the private plantations on crown land identified by the reviewers.
To avoid double counting (a matter the reviewers were careful to warn against) the public hardwood plantation estate in addition to the 177,000 hectares identified as private by the reviewers, must therefore be 34,000 hectares (the total of 55,000 highlighted in black less 21,000) making the total Tasmanian hardwood plantation estate 211,000 hectares not 236,000 hectares as the reviewers claim?
For a report trying to identify Tasmania’s hardwood plantation estate it’s a pathetic effort.
It does beg the question as to why a review panel was needed for a minor task that is clearly covered by the statutory role of Private Forests Tasmania as set out in Schedule 1 of the Private Forests Act 1994. However, PFT seems to be struggling a bit, their out of date website has been unavailable for a couple of months.
The problems of MIS referred to in the report were starkly evident over 5 years ago when Great Southern unveiled Project Transform in a desperate attempt to survive. It was soon clear, a cursory inspection of financial accounts was all that was required, that the problems affecting Great Southern were common to all forest companies.
But here we are over 5 years later and the policy makers can’t accurately identify the size of the estate.
As to why a review panel was needed, perhaps the presence of Martin Ferguson suggests it was really just a political exercise. If nothing else the report and that of the earlier Pitt & Sherry report which covered similar territory (although broader and more detailed) confirm that the current plantation estate falls well short of what will be required for a pulp mill. This of course has been exacerbated by the paucity of new plantings over the last 5 years, the likelihood that current growers will most likely exit the industry, and that current leaseholders (50,500 hectares in total as per the above table) will, most likely end up with the lessees’ trees which even if harvested won’t produce enough revenue to fund replanting and certainly not enough to fund the conversion back to farmland. The plantation estate is likely to shrink in coming years, to less than half that required to feed a pulp mill.
The Pitt & Sherry study found the weighted average growth at harvest across the entire private plantation estate was approximately 15 cubic metres per hectare per year at an average harvest age of 17.4 years. To feed a pulp mill requiring 5 million cubic metres every year will require over 300,000 hectares, which is clearly not available at this stage. FT is having trouble finding land to plant the remaining 16,000 hectares agreed to under the TCFA.
The review therefore concluded that we should “promote ongoing expansion of the plantation estate by revisiting incentive schemes”. No analysis of the failed incentives, just a plea for more. An acknowledgment that value adding opportunities were yet to be discovered but nevertheless a plea that we should keep expanding a resource just in case? Keep pursuing the same policy that has been a monumental failure?
If only the predominant tree had been E globulus and not E nitens, the report lamented, coppicing may have negated the need for second rotation planting. The reviewers however found no compelling need to provide analysis of yields from coppicing crops. Let’s commence another 15 year misadventure? It may work?
All three review panel members represent organisations and departments which have been unwavering supporters of the plantation model that has now comprehensively failed. The collapse of the model had nothing to do with protest groups or the GFC. It collapsed because of its inherent flaws. But as yet no mea culpas.
Reviewers found sovereign risk posed by protest groups may deter investors from investing in Tasmania,
More likely is the sovereign risk arising when word spreads that Tasmania is run by unrepentant idiots.