Timber doesn’t stack up

Farmer says land would better serve the district as traditional agriculture, not pines

Tumbarumba may be a timber town, with estimates that it employs one in five people across the wider region, but landowner Geoff Daniel says he’s tired of seeing the government subsidise pine plantations, when he believes the land would provide greater economic benefits for the district through agriculture.

He questioned why the plantations are seeking public funding for land purchases to expand pine plantations, when graziers are paying record prices to snap up rural blocks.

“If the industry can’t be profitable on its own account, why have it?” he asked.

“If they want pine plantation, they should pay a price for the timber that makes it worthwhile to grow it. They don’t do that and they won’t do that. They’re just piggybacking the government. 

“It’s a sin.”

Mr Daniel, who owns farmland through the Snowy Valleys local government area including around Tumbarumba, said he was so frustrated with the issue, he put in a submission into a NSW Legislative Council inquiry into the long-term sustainability and future of the timber and forest products, but got little more than an acknowledgement of his letter.

“Nobody [at the inquiry] questioned the viability of pine forests as a land use,” he said.

“Everybody who spoke was lobbying for the softwood industry.

“I do believe that pine plantations are a poor allocation of resources.”

In his written submission, Mr Daniel analysed the risks associated with pine plantations, compared to “well-managed grazing enterprises” and wrote that his “own enterprise has sustained an internal rate of return of 12 per cent over the past 40 years – a very significant creation of wealth” and said he knew of other farmers with similar rates of return.

“Analysis of likely returns from pine plantations suggests a likely return over the life of a plantation of -1 to -3 per cent,” he said.

“Although this may seem low, it seems reasonable when looking at the fate of private plantations in the past, where virtually all private plantation schemes have faced insolvency at somewhere between two and 20 years into forest rotation.

“They have then been sold off as distressed assets at well below cost of establishment, leaving investors, taxpayers and treasury well out of pocket.”

Touching on the issue of job creation, Mr Daniels also said he’s “very confident that there would be more people employed on a thousand hectares of farm than on a thousand hectares of forestry” and argued that the real beneficiaries of government subsidies for pine plantations are “really just a few families – the Pratt family, the Hyne family – whereas if the land went back to grazing or stayed as grazing we would be a much wealthier district.”

Alongside the financial considerations, Mr Daniels said he doesn’t feel like the inquiry is taking into account the long term bushfire risks associated with pine plantations, which don’t exist with farmland.

“The fires would not have been if we didn’t have pine trees. As an investment, what chance is there that we won’t have another fire in the next 30 years?” he asked.

“What I’m saying is nothing new but the softwood lobby is so powerful and so skilled and so well resourced [no one is listening].

“I think it’s a scandal.”

The NSW Legislative Council’s inquiry heard claims from industry group Timber NSW that “New South Wales’ timber and forest products industry contributes millions each year to the state’s economy.”

The lobby cited statistics saying that the timber produce industry “value adds” $2.4 billion, with an exporter annual contribution to exports of $219.5 million and total regional employment of 22,000 people. 

They argued that their members’ products are crucial for helping the state provide “stable, affordable housing is critical to economic security, physical and mental wellbeing, and facilitates access to jobs and services. Consequently, housing is essential to support rising living standards” and stated that “the right timber policy settings will contribute significantly to future prosperity.”

“In the wake of Covid-19, the demand for timber has never been higher and the constraints of the supply of NSW timber have never been greater. Covid-19 has ushered in a new era of employment opportunities relating to forests, both direct and indirect. The diverse range of employment opportunities for regional and rural communities listed below can be realized through appropriate policy settings,” wrote Timber NSW CEO Maree McCaskill.

Mr Daniel said that with powerful, well-organised lobbies acting on one side and “politically fragmented and generally poorly represented” farmers on the other side, it has been almost impossible to get an equal hearing.

“I’ve attempted to go through the proper channels and have been completely ignored,” he said.

His submission to the inquiry was two pages in length, along with a copy of a research paper in the economic potential for pine plantations in Australia. The submission from Timber NSW was 245 pages in length, and can be viewed at https://www.parliament.nsw.gov.au/lcdocs/submissions/72215/0222%20Timber%20NSW.pdf