View from Australia – In Search of Higher and Better Land Use

With the slide in recent years of the FOB price for blue gum woodchips from Australian ports from over US$200/tonne to below US$165/tonne, there are serious questions being asked about whether the hardwood plantation estate can be sustained in more marginal areas which are further from port. Can some of the plantations be economically harvested at all? Depending on who you speak to, up to 50% of Australia's eucalypt plantations may not have a viable future.

This has raised an interesting dilemma for Forest Stewardship Council (FSC) certification, since FSC specifically rules against conversion from forest to non-forest land use. In reality, the conversion rules were first constructed in the context of preventing large scale conversion of natural forests. Nonetheless, FSC is still rightly focused on maintaining or enhancing forest cover under both plantation and natural forest scenarios.

However, the conversion rules as they are currently interpreted and implemented, potentially have the impact of sustaining poor environmental, social and economic outcomes. In particular:

  1. Uneconomic plantations are unlikely to attract an appropriate level of management attention, leading them exposed to environmental degradation, including noxious weed and pest animal infestation and higher likelihood of erosion and water pollution, as well as possibly increasing fire risk.

  2. Similarly, uneconomic plantations will result in lower levels of employment in situations where the land can viably be returned to an agricultural setting. The opportunity to generate more income and reinforce rural community stability will be lost.

  3. By being restricted in relation to land use change for economically unviable plantations, timberland investors are likely to take a view that investment in Australian eucalypt plantations is much riskier, resulting in an overall undermining of confidence in the sector.

Ultimately, the question needs to be addressed whether it is in the interests of FSC and good forest management to maintain plantations in former agricultural production areas where they should possibly never have been established, and where there are more sustainable alternative uses for the land. Additionally, there is an argument that good plantation forest management practices should not be judged on whether or not the plantation is sustained beyond a specific rotation. After all, no one restricts a farmer from changing from growing canola to wheat or to grazing. The important issue, from a responsible management perspective, is how the forest is managed during the rotation and through the harvest event.

PF Olsen Australia has been working closely with other growers and managers in Australia, and with FSC Australia to develop a better understanding of this issue to allow informed strategy to be developed. We recently hosted a field trip for the board of FSC Australia to look at the challenge first-hand in central Victoria. There is considerable discussion still to be had around this issue but in the spirit of open and honest stakeholder consultation, we have started a positive process of engagement. This should assist in coming up with a clear direction that can work for all stakeholders.