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Why not a village-based timber export business

JOHN FOWKE

John Fowke with old friendsTHIS PIECE OUTLINES BRIEFLY a concept which I believe Papua New Guinea villagers would discuss avidly and which might produce a worthwhile process of evolution in the timber industry.

George Leahy who owns and controls the sawmill at Baimuru (it’s been there since 1924) buys logs from the local villagers who fell and float them on the tides by way of delivery.

An old mate of mine in the sixties, and a colleague of the late Bertie Counsel, had a small 40-tonne barge on which he installed a simple sawbench. Occasionally, he would tour up and down the Era and Pie rivers, buying and milling timber which villagers had harvested and made ready for him. Cash in hand, as it was at the Baimuru mill.

The photo is of me and the late Sir Sinake Giregire and his old friend Tom-the-Jockey.  Sinake was a great bloke; always short of smokes and beer, but likeable and highly intelligent with ideas and a presence which gave him authority.

Despite frequent criticism and whilst carrying its own load of problems, PNG's coffee industry is the nation's most successful vehicle for village subsistence farmers to earn a fair cash return - cash-in-the-hand for effort put in on their own land.

Fair, at any rate, when the road is open and rival raskolmangi are not out in numbers to stop a variety of buyers coming in to compete for the product at the roadside.

This is because the coffee-industry is free-enterprise, highly-competitive and controlled by the growers who elect seven of the 12 directors sitting on the Board of the Coffee Industry Council, the industry's regulatory body.

There are three government appointees on the Board, representing the Finance, Agriculture and Commerce Departments, leaving two other stakeholder groups, the factories and the exporters, who are not necessarily aligned with the growers.

For all its vicissitudes - occasional political interference and rip-offs like that perpetrated by the late Walter Perdacher of Mt Hagen who died owing the growers K47 million - this is a model enterprise for the villager.

Such a pity that the copra and cocoa industries can’t inject the same direction and energy into their Boards. But that’s another story.

Which brings me to the notion of a Timber Industry Corporation owned by provincial timber owners associations appointing a board of grower, government, mill, transport and export representatives.

Villages, clans or tribes with millable, harvestable timber on their land would appoint a trained forestry assessor to census, mark and satnav marked trees ready for felling.

The landowners would meet regularly to agree upon the trees to be felled and the split-up of proceeds after the timber was transported out and sold.

The timber would be felled and milled with a wokabaut somil owned by the group.

The product would be standard-size flitches for eventual breaking-down into desired sizes by end-users suitable for dragging or mini-tractor pulling to the roadhead.

A trade in container-lots of dried export flitches of named size and species could be developed by Board-licenced timber export companies (private and competitive, not centrally-controlled quasi-government shitfights).

Owners groups would sell to the licenced exporters either by tender per container lot as specified, or by monthly auction. Transport from roadhead or riverhead to the exporter would be the subject of separate negotiation.

Okay, it’s a vast and tangled bamboo jungle to negotiate, even considering existing vested interests and their political links, and a huge drafting job to build an Act and modify other Acts as necessary.

But, hell, it’s a really good idea, isn’t it? It’s not cargo-cult, though there are lots of pitfalls, so do spend some time thinking and talking and maybe getting heads together.

Comments

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James Campbell

I am greatly involved in the Western Province and have set up a company called Waena Enterprise Ltd. Our objective is to give the people of the Middle Fly region employment, education, proper houses and bring them into the 21st century with proper payments for their products.

The company is PNG-based company, myself the only Australian, the rest are PNG citizens. We have the timber permit to thousands of hectares of timber.

We have about 10 projects which we will do once we gain some money from the timber. I would greatly appreciate some assistance as your web page indicates that you are trying to help PNG.

Michael Dom

Adrian Saimor - I read some recent comments (on PNG Loop I think) by timber agents in PNG regarding the government's new housing initiative, where BSP is providing low interest loans to citizens for building their own homes.

Their concern was that the deal with the Exim Bank loan probably ties in purchase of building materials from overseas.

They say that the timber industry can not compete on the export market with alternative sources.

They argue that while the governments housing initiative is a good one the supply of building materials should come from local companies.

I don't know if this helps you, but I think that there is probably some need to lobby with the right groups to 'get a bigger slice' of the potentially large market that would follow from the national housing scheme.

Adrian Saimor

Hi, I am a shareholder in a local business group focusing on timber production using sawmills. That was the whole part of the plan.

There is a high competition in the local market. Income earned could not match the operational expenses due to falling prices.

To export our own quality local timbers is the best solution. We do have an export license recently, but the problem is the market. We do not have any connections with the foreign timber buyers.

Could anyone help me on where to start to at least bring this small local group out to the foreign markets?

Mark Winai

Hi I am doing literature review on establishing a sustainable model for community based timber utilization facility (timber yard).

Any idea where i can get some published information? My email is winaimark@yahoo.comj

Andrew Hambaghunia

I am one of the locals trying to go into local timber export using my own land in East Sepik Province of Majuom Village- Boiking - west of Wewak town towards Aitape.

Please communicate with me to give confidence to harvest my own timber for export.

My Digicel phone is 71064796 I am currently in Port Moresby and leave for Wewak on 17 March and would like to have some face to face discussion with you before I leave.

Thank you very much.

Phil Fitzpatrick

Prior to independence there were many walk-about sawmills in operation. Most local government councils owned one, often in conjunction with a larger mill.

A lot of missions did the same thing.

The timber was used on council projects and to supply the administration with such things as decking for bridges.

Timber was also sold to local people and they also made good use of offcuts. Nothing was wasted.

Landowners were paid a set rate for their trees based on super footage.

Good system that worked well.

Archie Vanua

Only recently I helped write a concept based on a "Network of Walk-About Sawmills". A viable commercial concept that I believe would be readily embraced by forest owners throughout PNG.

An idea that encompasses forest planning, acquisition of portable mills, centralized sales & marketing, royalties, etc.

Oivo Baoroba

"Village based timber export business" Is this real?

Somebody else signed and then the developer came in to harvest and rape my virgin forest.

They were in a rush in 2010 as the timber right purchase (TRP) was expiring on 20 October 2011. After a district land court hearing, I was cleared to be paid the royalties, a lousy K200,000 for 6,000 round logs exported.

They left in a hurry in the night. My trees are still standing, those that they couldn't harvest. If there is any truth in this I suggest that export market be a one stop shop for every aspiring village timber business.

You use your export license to arrange sale of my timber, you get to withhold certain percentage of the transacted amount as a retainer fee. That way i tend to benefit from my local forest timber.

Neil Yamelu

Looking on Papua New Guinea, it seems that we are rich and full of natural resources. However, apart from other resources, I choose that it is better that logging should be done by the local people themselves in terms of harvesting, processing and exporting of the end products.

This is because most logging companies in PNG are illegally operating in the country just to smuggle our logs .The end result of it is they make more money for themselves and their own country while our country receives less and the landowners suffer.

Therefore I suggest that creating a village-based timber export will help local landowners to benefit themselves and prevent money revenue from going out of the country.

This initiative is good for the betterment of everyone in this country so i support it should be implemented by timber owners.

Tony Flynn

As an failed walkabout sawmill operator, I also had the same dream that possesses John.

Local sales should be cream on the cake. The main sales should be to an organisation representing all operators.

Most operators are like me; not competent to export. The main sales should be flitches; these are much more economical to produce and should be the sawmillers bread and butter operation.

I failed due to the basic fact that walkabout sawmills are best as owner operated; I was managing at a distance and in a low value dispersed resource near Wau.

Fortunate are the dealers in old growth forest.

Michael Dom

Always practical. Always affirmative. John Fowke.

Keith, is there some way we can use our current network of Attituders to link with professionals in our rural industries?

That way we could engage them for some commentary and/or feedback on articles.

It feels so impotent raging for or against agenda without someone to respond who may have better knowledge of the in's and outs of whatever issue or agent we are concerned about.

These persons don't need to be identified if they don't want to - aliases may be allowed in this case.

Their specific feedback would temper and direct our criticisms, arguments and discussions. They could be the assistant working at the forge where we smelt, mold and create our arsenal of steel weapons and tools.
__________

A profound question, and one that John Fowke himself has asked previously more than once.

PNG Attitude is about words, ideas, exposure, understanding, mutuality and learning. It is not primarily about taking action so much as as establishing, in part of what it offers anyway, a context for action.

That said, we have been active in a way that goes beyond our main remit - for example, in assisting good causes in PNG, in providing a leg up for emerging writers, in establishing the Croc Prize, in the foundation of SWEP.... All practical, all successful, all within our zone of competence.

But there are limits. Of competency and practicability. Given that we all participate in this project in our spare time, without remuneration and in the absence of formal organisation, there are limits.

We will do what we can do, but there are many issues which we are merely able to discuss, debate and propose on. Putting on the workboots and effecting change on the ground is overwhelmingly the responsibility of those who have been tasked to do it - KJ

B Bina

John, splendid idea. The trees belong to the people yet under current practice of FMA and selling of logging rights, the owners get nothing for what is theirs.

The big logging companies get the most out of the timbers and feed the crumbs to them. It should be the other way around, the tree owners feed the crumbs to the big logging companies.

If they see that the returns will get to them eventually, perhaps they will replace those felled trees.

My village in Goroka has now gone nuts planting gum trees next to cliffs and places far from the road as the wokabout sawmill can be brought to the site where the trees are felled and the sawn timber carried to the roadside.

We should give thought to the suggestions of the PNG Timber Authority like the CIC.

On the Coffee Industry Council, they are making strides however the direct export by farmers through cooperative societies to Starbucks and others need to be seriously looked at.

Perhaps the management can be assisted to ensure that the growers get maximum returns instead of the big factories who some dont even have a coffee garden to start with.

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