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ABARES report like a script from a horror movie, plantation estate staggers backwards

OPINION EDITORIAL: Originally published in Timber & Forestry E-News

The latest five yearly review by ABARES of Australia’s national plantation estate is more than sobering reading. It’s like the script of a horror film. The bureaucratic speak in the report, notes unemotionally that Australia’s softwood plantation estate (the pine trees that we use to make our timber house frames) remains ‘stable’.

‘Stable’, in this context, means stagnant, as it has been for more than a decade, which means it is failing to keep up with current and future housing demand. This line should be written in bold with lots of exclamation marks.

This is a troubling scenario in a nation which is already well below water when it comes to supplying its own timber needs. However, the truly scary page in the report is the one showing ABARES’s forecast that ‘softwood log availability’ – and by extension housing timber – will decline by 12 per cent over the next four years, and the pine plantation estate will remain stagnant for the next 40 years.

Meanwhile, our population is growing quickly – some estimates say 35 million by 2035.

And yet how do we square this picture with the fact that there is massive demand for timber products? Our plantation estate provides the affordable timber for our homes. If you are building or renovating, you will know that timber and timber products are in huge demand. AFPA and Master Builders Australia recently calculated we will be 250,000 new house frames short by 2035. Just what do we think our children are going to do?

To come back to the ABARES report, the national plantation estate continues to go backwards. Each year a little more land moves out of tree crops into other types of farming. Our national political leaders at state and federal levels signed up to a plan in the 1990s which said we would strive to grow Australia’s plantation area to 3 million hectares by 2020. We reached a high-water mark of just over 2 million hectares in 2010 and the tide has been receding ever since.

To understand why supply is going backwards when there is so much demand requires just a modest understanding of economics.

A market should, the theory goes, be self-balancing.

Growing trees defies this model as the product (trees) take a long period to grow into something the owner can sell.

A farmer or landholder who wants to grow pine trees for the local sawmill has to plant the seedlings then wait around 30 years before the trees are mature enough to be turned into structural housing timber.  That’s the real payday for the landholder. But Australian farming rarely can afford such far horizons. That’s why it represents market failure and why every plantation tree in this country has been planted with some sort of policy intervention. These interventions have ranged from Commonwealth and state loan schemes through to taxation breaks. And we aren’t alone in this. All over the world countries that wish to have a plantation estate find they have to put in place policy measures which bridge those early ‘dead financial’ years.

It’s a classic market failure and an open and shut case for Government, both federal and state, involvement.

The current best hope we have as a nation of creating a more optimistic ending for that ABARES horror scenario of timber shortages stretching into the decades, is to encourage farmers and landowners to invest in plantations by paying them for the extra carbon the growing trees will store. After all, half the weight of a tree is embodied stored carbon. The great thing about plantation forestry is that, even after harvest, that carbon remains locked up in things like furniture and house frames.

Our modelling suggests that we need urgently to plant another 400,000 hectares of plantations in this country. That would help close that demand gap. It also represents an almost unnoticeable change in land use. There is 380 million hectares of agricultural land in Australia. An uptick in plantations, planted close to sawmills and processing plants to ensure social license and downstream job creation, would amount to very little land use change, whilst significantly boosting our future timber supply.

The other great news for the Federal Government and Opposition, which both want to see our nation be carbon neutral by 2050 and the planting of One Billion Trees for timber and wood products by 2030, is this would mean an additional 200+ megatonnes of CO2e stored. A massive free kick to the nation’s carbon accounts.

Ross Hampton, CEO

Australian Forest Products Association

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