When politics and industry meet there will usually be areas where interests conflict… but the impact that devolution is having on the Forestry Commission may well be described as absurd.
Forestry policy is now the responsibility of the Scottish parliament, National Assembly for Wales and, for England, Westminster. The policies are separate – and diverging.
Forest Enterprise is the agency of the Commission entrusted with management of the nation’s forest estate – more than one million ha, of which around 800,000ha are forest and woodland throughout England, Scotland and Wales. Its aims include maintaining and increasing the productive potential of the forest estate and increasing the net value of commercial activities.
As of April 1, Forest Enterprise has been split into three, so there is now no central marketing function covering UK public forests.
The UK forest products industry, of course, does not run itself on national lines. Sources say that although the Forestry Commission is trying to maintain an umbrella function, there is growing concern over how well this is working – particularly following the decision to disband the Forestry Commission Advisory Panel‘s sub-committees.
Three sub-committees
There were three sub-committees – Environment, Technical and Supply & Demand. No-one is too worried about the first of these, since environmental issues are well covered by numerous organisations. The other two are a different matter.
With no overall UK authority, technical research could be undertaken separately in Wales, England and Scotland with the obvious potential for work to be duplicated.
From the viewpoint of this market report – and the UK forest products industry – the more immediate concern is the future of the Sub-committee on Supply & Demand (SSD). There was talk of combining the research and SSD roles, but it is understood this has been discounted and formation of a separate “statistics” committee has been discussed.
Gathering statistics was one of the SSD’s key responsibilities. The sub-committee was already self-critical about the quality of the data – and is now trying to encourage the Forestry Commission to approach the government for modest funding so that it can continue to meet and invest in improving the process. Babies and bath water come to mind: at the most basic level, if Scotland, Wales and England develop different methods of collecting statistics it would lead to problems in collating national UK figures, as required for presentation to Europe, for example.
However, the key worry is that the focus is now on supply statistics. The ‘D’ in SSD stands for ‘demand’, and an important function of the sub-committee was that it brought together representatives from the industry as well as private growers and, through Forest Enterprise, public forests. The emphasis on supply leads to an imbalance that is detrimental.
Nominal SSD meeting
Although it has been disbanded, a ‘nominal’ meeting of the SSD was held in May. However, no reports were presented by organisations representing growers, as has been the case to date. The industry is represented by the UK Forest Products Association, which did provide its usual quarterly market report.
Supply statistics are gleaned from production forecasting – taking physical growth and applying criteria to obtain productive output. Good models exist for this and are improved. Demand is more difficult, relying on voluntary submissions from users such as sawmills. Often, the two sets of data show far greater difference than they should. Nevertheless, demand statistics are seen as the key since this is where the wood goes – what’s cut should equal what’s used within reasonable limits, and this must be the data on which growers plan their future supply.
Modern trading methods could offer an answer to more accurate demand statistics. Certification and chain of custody data, plus the growing volume of e-business, should make it easier to obtain the information and the data should be more accurate.
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“With no overall UK authority, technical research could be undertaken in England, Wales and Scotland with the obvious potential for work to be duplicated” |
Whether this can be achieved without the central role of the SSD remains to be seen. Whereas the Forestry Commission and Forest Enterprise may have the funding – from taxpayers – to split their operations three ways, organisations representing private growers and users cannot justify the extra cost, personnel and logistical problems. Moreover, they see no benefit in doing so since the industry they represent knows no borders.
Renewble energy policy
Another area in which political and industrial needs have clashed was highlighted in the House of Commons last week. According to Hansard, in response to a question, the minister for energy and construction Brian Wilson confirmed that representations had been received from the Wood Panel Industries Federation on the impact of the government’s renewable energy policies on the industry, and particularly the encouragement given to the use of UK forestry material by co-fired power stations.
Among the ‘interesting’ contributions by MPs during this somewhat unexpected debate was that, according to Hexham MP Peter Atkinson, 15,000 jobs in the wood panel industry are “threatened because these so-called green power stations will be able to outbid woodchip mills for the basic raw material that they need – woodchip, much of which comes from freshly felled trees”.
Martin O’Neill, MP for Ochill, offered the rather surprising comment that: “50% of the available timber in Scotland has been bought by a single power station on the back of substantial subsidies for renewable generation. There is every possibility that in the ensuing 12 months, there will be insufficient timber to enable Scottish processing plants to continue”.
A question about the Arbre plant, which is fuelled by willow coppice and has received a £10m investment from Europe, was also asked. Tony Clarke, MP for Northampton, South, then said most of the product burned in renewable energy plants was not willow coppice but “waste wood products”, and asked: “What is the economic or environmental sense of a subsidy that allows wood products to be purchased at £40 a tonne, when the wood panel industry can buy it at £20 a tonne? That industry keeps 15,000 people in jobs.”
The WPIF has obviously briefed well.
The UKFPA‘s report to the May meeting of the former SSD confirms that “concerns have been expressed by some UK panel producers about the possibility of a threat to supplies of sawmill co-products from the electricity generating sector if co-fuelling develops”.
The sawmillers’ view
Sawmills offer the counter perspective: that although demand for wood chips and sawdust from the panel board sector remains good, prices have fallen dramatically and this is having an adverse effect on the sawmilling sector.
The market for sawn softwood is good, but price increases that have been maintained for construction grades have been “more than offset” by reductions in prices paid for co-products.
The severe and prolonged ice in the Baltic Sea has provided opportunities for some mills, and reasonable weather has helped the fencing market. The pallet sector remains extremely difficult, with fierce price competition from overseas suppliers.
Demand for panel products has been good, especially from the construction sector, but here too, competition from overseas producers remains strong.
Good quality hardwood continues to sell well, with imported temperate species featuring in most hardwood sawmillers’ and merchants’ stocks. Concerns remain about the quality, continuity of supply and cost of UK-grown hardwoods. There is increasing interest in certification and chain of custody in the UK hardwood sector.
Overall, the UKFPA says that spring has seen increased demand for most products. However, prospects for 2003 will to a large extent be dictated by matters that are outside the control of the industry.
