Options tabled to ban log exports
By Chamanlall Naipaul
Guyana Chronicle
February 18, 2007
GUYANA’S policy with respect to the export of logs, which has recently become contentious, is expected to be defined shortly following a public consultation yesterday with officials and other stakeholders in the forestry industry.
At the session at the Regency Hotel on Hadfield Street, Georgetown, Commissioner of Forests, Mr. James Singh presented a comprehensive paper for discussion which provided information on the state of the local forestry sector versus the international situation.
He pointed out that several countries have either severely restricted the export of logs or have entirely banned exports, and said that from the consultative process established through a ministerial committee, options for Guyana have been put forward for discussions and eventual adoption and formulation of an export policy with respect to logs.
According to Singh, option one proposes a ban of 15 species of logs from March 1, 2007, while option two proposes that a ban of exports be imposed from January 2008.
The advantage of option one, the Commissioner said, is that it will help boost value-added production during this year, while the disadvantage is that it provides for a limited time for transition by forest producers.
In relation to option two, Singh said the advantage is that it caters for a transition period of at least eight months, but the disadvantage is that the trend of log export may continue during this year, especially for the prime species.
Over all, he noted that had a ban/restriction on the export of logs been implemented, it would have had a positive impact on export revenue, the Gross Domestic Product (GDP) of the forestry sector, value-added forest production, creation of more job opportunities and an additional US$9M earned in export earnings, if the logs exported in 2006 had been converted into lumber.
In addition, the Commissioner revealed that the total log production in 2006 was 380,000 cubic metres which represents only 55% of local milling capacity.
Prime Minister Samuel Hinds, who delivered a presentation at the forum, said the way forward within the forestry sector is through forging collaboration, alliances and partnerships among stakeholders.
He noted too that external alliances have to be sought to push exports of forestry products because Guyana has a small market.
Mr. Hinds cautioned that the quarrels among stakeholders cause them to lose sight of the changes taking place in the marketplace, and one challenge they face is bringing down the cost of production to be able to compete with other countries.
A dilemma faced in light of a ban/restriction of logs is whether the local downstream processing capacity could grow fast enough to accommodate this situation, and if this growth does not happen then it could trigger problems for the sector, he said.
As such, he urged local producers to move in the direction of specialisation, and suggested that the Forest Products Marketing Council (FPMC) could be a mediator in the problems involving the stakeholders in the forestry sector.
Rebutting the contention by some that the exports of forestry products grew last year due to the increased exportation of logs, the Prime Minister said while the exports increased by 11% in volume, in terms of value it rose by 42%. He argued that therefore means that this increase could not have come from export of logs alone.
Agriculture Minister, Mr. Robert Persaud voiced concerns about investors being granted concessions for value-added production as he had cause to call in two such companies - Barama and Jaling.
However, he said following meetings with the senior management of these companies, he has since been presented with implementation plans by them.
With respect to Jaling, the minister said the company assured that processing of logs would progressively increase to 90% by this year, while a commitment has been made to construct a sawmilling and veneering plant at Port Kaituma by the end of this year.
In addition, there will be a progressive decrease of foreign staff from 28.7% to 185 by April of this year and by the end of this year this figure should reach 13%, he said.
Persaud reported that Barama plans to install kiln drying facilities, a new pony saw and construct a workshop to start the dry dock activities and a co-generation plant by the end of next month.
By June of this year, the company expects to start the construction of a veneering building, its first barge and installation of a three-megawatt co-generation plant and installation of a finishing plant, while by September this year the third shift sawmill operation should be implemented, the installation of and commissioning of the veneer plant completed and the construction of the third barge started, the minister said.
With respect to the ratio of foreign and local employees, Persaud said by the end of this year the number of expatriates should be 57 while locals should reach a minimum of 360.
He added that monitoring of the implementation of these plans has already begun by the Guyana Forestry Commission (GFC).
“In our deliberations today, we need to examine the practice within the context of our long term objective of enhancing economic, social and ecological benefits through sustainable forest management, while at the same time being cognisant of the realities of the sector. As practitioners, you would be all too familiar with the challenges of the availability and cost of timber production, transformation and transportation coupled with the technological ability to produce to specification,” Persaud declared.
He added: “Clearly, there is a need to articulate a policy position based on sustaining growth while at the same time arriving at a consensus position on short, medium and long term actions to expand the benefits that stream from forest industries.”
President of the Forest Products Association (FPA), Mr. David Persaud, alluding to the potential of the forestry sector to contribute to the national economy, said that for last year, earnings from export of forestry products surpassed those of rice, and it was something that the forestry industry was working on for some time.
He also appealed for greater financial incentives for retooling and modernisation of the local forestry sector to make it more competitive.
President of the Guyana Manufacturers and Services Association (GMSA), Mr. George Robinson said that because of concerns about the inadequacy of raw materials for those involved in the manufacturing sector, along with some other irritants, his association wrote President Bharrat Jagdeo to meet him.
While they were not successful in having a forum with him they are grateful to having such a forum to have their concerns dealt with, he said.
Chairman of the GFC Board, Mr. Tarachand Balgobin stressed that the aim with respect to the forestry industry is not to only increase its contribution to the GDP but also to increase employment opportunities, production and productivity and enhance the welfare of people.
He said that to heighten the efficiency of the forestry sector, new forestry legislation and revenue structure are imminent.