New Technologies and New Opportunities: supply and demand market development for sustainable private forestry
The Wilderness Society, Australia.
Introducing a Market Development initiative spearheaded by ENGO ‘The Wilderness Society’ that has significant potential to facilitate agro-forestry extension work and improved outcomes for conservation, agro-forestry, farming, construction industry, and community stakeholders. There is clear evidence that private land re-afforestation will play a key role in addressing complex multifactorial land degradation issues, and the massive local and regional extinction events cascading through the southern and eastern states of Australia. With limited support forthcoming from the public sector, and declining private incomes available to address these problems, there is an urgent role for land management strategies that boost on-farm incomes and stabilize rural economies, while assisting land use decision-making in a whole-of-region environmental context. Agro-forestry appears to offer tremendous opportunity in these areas.
However significant barriers exist, including landowner access to high-value markets for timber products, community concerns over industrial plantation establishment, and un-addressed management challenges with regard to remnant vegetation and non-forest ecosystem values. This paper introduces a local-scale market development initiative that has relevance Australia-wide to the aims of stakeholders, and offers new opportunities for agro-forestry extension as part of an integrated approach with conservation and community interests. With a brief overview of local environmental priorities and objectives, the paper discusses, with practical examples, ways in which the approach can facilitate win-win outcomes for those involved.
For those unfamiliar with details of the Australian context, timber extraction and to a larger extent historically forest clearing for agriculture has had profound impacts on forest values. Although covering only 18% of the continent (ABARE 1995) forests contain a high proportion of biodiversity but only about 25% of the 1750 forest estate is relatively unaffected by clearing or harvesting (CSIRO 1996). Overall an estimated 45% has been removed (Willis & Tonkin 1999). Ecosystems have, however, not been evenly affected: the most severely degraded include rainforests, 75% of which have been cleared (CSIRO 1996). 80% of NSW and Victoria's formerly extensive Box-Ironbark forests have been cleared (Willis & Tonkin 1999) (VNPA 1999).
In a wider context these degraded areas are part of the 48% of Australia's landmass significantly disturbed in the last 200 years (Graetz et al 1995). Linked to this disturbance are the extinctions to date of over 100 species, and the endangering of over 1000 more (CSIRO 1996). Recher predicts the extinction of 50% of terrestrial avifauna over the next 30 years alone (Recher 1999).
While land clearing continues to present the major threat in some areas (notably Queensland) focus has in many states (notably Tasmania, Victoria and West Australia) switched to the degradation of remnant values by forestry operations. Ecologically the implications of management practices include increased erosion, removal of ecosystem components, and a "real possibility (of) massive loss of biodiversity"(CSIRO 1996). The 1996 Commonwealth State of the Environment Report listed 10 species as under ‘present and future threat’ of extinction directly from forestry operations (CSIRO 1996).
Debate centers on the use and management of remaining forest areas, which have significant economic and social values. Nearly 30% of remnant forest areas are privately owned land (Clark 1995) and largely unprotected. Only 16% of native forests are in conservation reserves. 30% are state forest (largely available for logging), 26% are on crown land (with generally low timber values, used for grazing). Plantations, publicly and privately owned, are equal to slightly less than 3% of the native state forest estate but produce more than half of Australia's sawn timber (ABARE 1995).
Silvicultural practices criticised by conservation groups include rotation lengths which prevent the development of essential hollow-bearing trees; the effects of clear-felling on species ratios and biodiversity; the effects of the regenerative burn on soil structure. There are wide concerns over the paucity of reliable data of impacts on fauna and flora populations; the adequacy of highly fragmented conservation reserves, the effects of roading on soil compaction and the spread by logging activities of feral or pest organisms (Willis & Tonkin 1999).
Conservation groups including The Wilderness Society campaign for the development of an improved plantation sector in parallel with the preservation in reserves of remaining forests including remnant vegetation on agricultural land as a practical strategy to simultaneously protect economic, social, aboriginal, environmental and heritage values. This is the philosophical approach behind the 'One-Stop Timber Shop'.
Research commissioned by the Australian Conservation Foundation and the National Farmers Federation estimated $25,150 million investment necessary in tree establishment to address salinity and acidification across up to 30% of Australia’s arable landscape (ACF/NFF ‘Repairing the Country’ 2001), as well as a further $8,310 M for biodiversity plantings. Developing accreditation schemes for Carbon credits and Biodiversity offsets, will have profound effects on the financial viability of private forestry, but is without the scope of this paper.
A national annual gathering of Australian ENGO’s working on forest related issues, the National Forest Summit, met in Victoria earlier this year to develop among other things a combined groups position on plantation establishment and management. This meeting developed policy objectives adopted in 1999 stating that:
- The forest movement condemns the clearing of native forests to establish plantations;
- The forest movement supports the utilisation of existing plantations to ease the pressure on native forests;
- The forest movement will actively encourage improvement in environmental management practices within those plantations;
- The forest movement will undertake research to identify limits to further establishment of industrial plantations;
- The forest movement opposes the export of unprocessed plantation logs;
- The forest movement opposes the intensification of native forest management
While all groups in 2001 agree that current forest management practices in Australia do not protect ecological values, opinions vary on the long-term role of monoculture plantations in timber production, and on implementation of private forestry. Priorities differ significantly across the country, from the protection of large contiguous areas of unmodified woodlands in northern Australia, to protection of small remnant vegetation areas in the south.
Key recommendations from the Victorian Plantation Management Position Statement are indicative of concerns and priorities of Australian ENGO’s with regard to Private Forestry:
- Planning Controls: plantations not to be ‘as of right’; identification of cumulative impacts including on catchment hydrology, priority vegetation protection areas;
- Management Plans: open and consultative processes include data on soil and water values, yields, operational plans;
- Design: promote the protection, restoration and conservation of the environment and biodiversity; Wildlife corridors, streamside zones and a mosaic of stands of different ages and rotation periods shall be used in the layout of the plantation. The scale and layout of plantations shall be consistent with the patterns of forest stands found within the natural landscape; Diversity in the composition of plantations is essential, so as to enhance positive economic, ecological and social outcomes. Such diversity may include the size and spatial distribution of management units within the landscape, number and genetic composition of species, age classes and structures;
- Species: use of indigenous species, no use of GMO’s;
- Protection and Restoration: no clearing of native vegetation; 30% of area to be managed for conservation outcomes; priority for uneven aged plantations;
- Pest Management: aerial application of herbicides banned; native animals not to be killed; Chemical residues must not enter waterways especially in domestic water supply catchments. Water testing will be undertaken;
- Social, Environmental, Economic And Heritage Impact Assessment: Monitoring of plantations shall include regular, government funded, social, environmental, economic and heritage impact assessments conducted on a local and regional basis; and
- Environmental And Heritage Performance Reporting: mandatory auditing of information included in the standardised environmental reports; environmental auditing system appropriate to smaller farm forestry operations and plantation owners will be developed.
The Summit endorsed research into development of an FSC-type approach to third-party certification of plantations (subject to certain definitions) as a key to moving forward on timber management issues in Australia. There was consensus that the distance to ecologically sustainable management on either Public or Private forests was simply too great to consider Certification for the foreseeable future. The implications for Private forestry are profound. There will be no ENGO support for private forestry that seeks utilize or clear remnant indigenous vegetation, and unequivocal support for purpose established plantations in either an agricultural or industrial plantations requires bridge building on all sides.
If Private Forestry in Australia wishes to obtain market leverage from eco-preferability then brand-building with backing of the ENGO sector is essential. Any fracturing or dilution of this will confuse the brand and destroy its value. It is looking at this time as if the only other potential eco-label, the Australian Forestry Standard being promoted by the Australian Government will be endorsed by Australian ENGO’s for a variety reasons.
The defacto position for most groups until Certification is in place is support for purpose-planted plantation timbers over timber from either public or private forests. Plantation timber herein is defined as “Trees planted and managed in an agricultural context for which wood production is the major objective”.
Market for eco-branded high-value and appearance grade timbers
Community interest in and concern about environmental issues remains very high at approx 70% of the population. While this has been on a slight decline over the last 5-10 years, it may be expected that coming ‘crunches’ particularly from salinity pressures and water availability will move this figure upwards.
Environmental awareness or concern is not reflected in buying patterns at this level however. Consumer sentiment survey and other data consistently show that about 10% of the population (the ‘dark greens’) will preference environmentally preferable products, and pay more for them. About 25% will preference, but are more price sensitive. A similar percentage will preference, if price is not a factor. International markets indicate similar figures with 8% of the European market and 14% of the US market buying Eco-Certified timber.
On this basis eco-preferred private forestry product in say, furniture, could be expected to demand a premium market for 10% of the population. With Australian’s spending approximately $11 per person per year on furniture goods this alone is a sizeable market opportunity if the product can be clearly branded, whether manufactured in Australia or, increasingly, offshore.
Similar trends can be found in another key market, the construction sector which over the last three years has experienced a sharp rise of awareness in environment and related issues. This is expected to continue flowing regulatory reforms (starting with energy efficiency) and community awareness of the high impact of the construction sector on degradation and emissions impacting on brief requirements in the public and increasingly private sectors.
Consider Architects commitment to Energy Efficient/Ecological Architecture (Whitman 1998), for example;
- 41% demonstrate in practice some commitment to EE/ESD.
- 30% consider ESD to be among the most important factors when designing.
- 31% consider ESD to form part of good design.
- 90% say ESD is very/important to them
- 19% said ESD was a most important factor in new commissions and an important factor of good design.
Smaller practices <10, particularly <5 are relatively more committed
Architects aged 51-65 are relatively more committed with the less committed being aged 31-40.
Women are more committed than men.
In focus groups with ESD-aware Architects (August 2001) carried out by the 'One-Stop Timber Shop' high levels of interest were evinced in having clear information about the environmental preferability of timber products, with the majority indicating that up to 20% of clients would pay more for clearly identified eco-preferred products.
Clearly there is a considerable market for Private Forestry products to attract premium prices in the Eco-Preferred marketplace in boutique and structural/ sawn timbers if they can be clearly differentiated.
Standing volume constraints & distribution
Volumes of mature hardwood plantation timber suitable for sawlog using mainstream technologies are extremely limited from either private or public forestry. In Victoria the only commercial volumes (and limited at that) are of Sugar Gum (Eucalyptus cladocalyx). In New South Wales and Queensland no commercial volumes are known of in hardwood timbers. In West Australia innovative work being done with E. globulus in generating sawntimber from trees as young as 10 years.
Challenges to delivering value-added product to market
The scattered and small quantities of timber available – either currently or in the foreseeable future for private forestry – make delivery of a product to manufacturers equipped for large volumes and a market undifferentiated for eco-preferred products very difficult.
Chain of custody and product eco-assurance
With no third-party Eco-Label in place, and no chain of custody documentation trails, it is difficult to see how ENGO support for eco-preferred private forestry plantation timber can be achieved.
Achieving market penetration & recognition
With a large number of small cooperatives springing up around the country, with inevitably different brands, standards and philosophies, market penetration and brand-building necessary to generate premium returns is all but impossible.
Managing growth & quality control: planning for the future
Without a clear and agreed standard and approach in place delivering a consistent and even-quality product to the premium marketplace will continue to be difficult and tested by any market uptake pushing and exceeding resource limitations. In such situations the pressure is always to lower standards, with a potentially catastrophic brand impact in this sector.
The 'One-Stop Timber Shop' was developed to address these issues and provide a brand-building marketing opportunity for eco-preferred products and services. In the absence of FSC or other ENGO recognized certification system, a different approach that learns from overseas work is required.
The 'One-Stop Timber Shop' provides an interface which:
Provides consumers with information and opportunity for the use and purchase of eco-preferred wood products.
Provides market development services to producers and users of eco-preferred wood products.
Builds brand recognition for eco-preferred wood products.
It is delivered by three channels:
Online through the 'One-Stop Timber Shop' web site
In print through the 'Forest Friendly Building Timbers' book
Via telephone through the 1300 76 77 88 service.
Technology Coming of Age
The 'One-Stop Timber Shop' has been developed at a time when online technologies are becoming truly accessible to Australian populations for B2B and B2C uses, notably in the rural sector. Sample statistics (sourced from ABS 2000 and NOI 2000, 2001) are:
- An estimated 50% of households will be online by Nov 2001. American Express research (Oct 2000) suggests 70% of Australian’s will be online by Oct 2001.
- Online access and computer use continues to grow rapidly in all sectors (number of household with PC’s increased by 22% over two years to Nov 2000)
- Regional access to online technologies increased by 76% to Nov 2000 to 40% of regional adults from all sites. Regional online uptake outstrips metropolitan growth.
- Largest increases by age groups is in older demographics, most markedly in the over 55’s.
- Over 20% of adults access the Internet from work.
- While one of the lowest users of online technologies 12 months ago, (and still with the lowest rate of own home pages) the construction sector has recorded one of the highest rates of growth at 171% over two years to Nov 2000 to over 40%.
- The construction sector was the highest user of the Internet for information searches (27%) and email.
- Buying related online transactions were at median levels with other sectors, c. 22%.
- Selling-related activities were lower (25%) leading only mining, manufacturing, health and community services.
- Property and business services are the second-highest users of the Internet
- The small and very small business sector records the highest rates of uptake, with this sector also making the most use of the Internet for email and information searches (25% for businesses with 1-4 people)
- Cost and lack of skills were considered to be more of a barrier to net uptake for small businesses.
'One-Stop Timber Shop' services
Database of Timber, Merchants and Processors
An online searchable database of current stocklists for recycled timber merchants is ideally suited to transfer to the boutique timber market. The search engine allows users to search by categories that include price, size, availability, grade and species.
Forest-Friendly Timbers - Applications Information
Recognising that most consumers do not search for a species but rather for uses, this feature takes users through an application based decision tree. Timber and non-timber alternatives may be listed, and a search for 'Flooring' will return plantation timbers, imported bamboo, and a variety of wood-based products.
Specification Guidelines & Technical Data
The challenge, once a product has been selected, is often ensuring it is used in a project, and to appropriate standards. There may be difficulties in determining details or technical information for less common products. This section targets the construction professional and address these issues.
Timbershop Classifieds is a resource whereby individuals and businesses can advertise product for sale, or wanted for purchase. Delivered to targeted businesses via fax and more broadly by the Internet.
Policy and Market Development
This section addresses the needs of Local Governments, Councils, Institutional and Corporate bodies seeking to develop a policy on the use of timber and wood products in their operations and procurement practices.
Information and Education Kits
Targeting information needs experienced by The Wilderness Society over many years, this section includes 'Designers' Client Briefing Sheets', market leaders 'Trend Datasheets', as well as University and school level ‘Infokits'.
This section, closely linked to the FAQ section discussed below, provides real-world advice on the purchase and use of forest friendly timbers.
Frequently Asked Questions (FAQ’s)
This is a wide-ranging section aimed at giving succinct responses and referrals to commonly asked questions. Responses tackle such questions as 'What is the difference between a plantation and a forest' and 'Where can I find out more about Forests in my area?'
The Timbershop Forum is an email discussion forum available though the site or as a list-based free of charge subscription service. It allows users to request advice and post news items to the email Timbershop community.
Late-breaking information on emerging products, developments and campaign updates are found at the Timbershop News page. An essential web-forum item.
Application to Private Forestry
Aggregate supplies: single desk marketing approach
Via its support by a National leading ENGO, commercial set-up and industry focus the 'One-Stop Timber Shop' offers an opportunity to aggregate producers and provide a single point of contract for manufacturer’s, consumers, or industries servicing the Private Forestry sector. With the majority of timber trading crossing state borders, a national and international interface is required. The brand-building capability of the service (by being vertically integrated) generates enormous power to assist producers and the sector in developing and identifying markets, services and outlets.
Link growers to processors and buyers
The aggregation properties of the 'One-Stop Timber Shop' approach mean that producers will be able to list volumes on the service to sale by auction or other suitable mechanism for a single point of contact for related businesses. This has tremendous potential to overcome the inertia created by distributed, small-scale producers with little or no market leverage.
Optimise returns by branding and selling to high-value markets
The brand building capacity of Timbershop via its participation in direct selling, leading ENGO backing and aggressive market focus on higher-value items provides an opportunity for the service to become a leading outlet for Eco-preferred private forestry product.
Market development and Eco-Labelling with third-party credibility
The service provides a potential circuit breaker to the problem of eco-labelling if cost-effective chain-of-custody documentation can be developed. There is some indication that this may prove to be possible.
Leveraging existing PF developments
A practical example where PF stands to gain market awareness and build profile is with the Sugar Gum timbers being marketed by Corrangamite Farm Forestry Network. Blessed with a relatively sizeable volume of clearly purpose-planted timber in a mature form, the Cooperative is in a strong position to develop and build the product in local boutique markets. The 'One-Stop Timber Shop' looks forward to developing this exciting opportunity provided key issues can be met including chain of custody documentation.
Call for expressions of interest
There is tremendous potential in the private forestry sector for commercial and environmental returns. An industry that has such potential to deliver positive returns to fundamental environmental services at the same time as building rural economies and capital capacity is a powerful agent for positive change for Australian land and resource management.
The Wilderness Society’s 'One-Stop Timber Shop' has to date concentrated its efforts on a not dissimilar boutique market – the recycled timber market – and commercial volume softwood plantation species and products. It is keen to work with parties and partners in the private forestry sector.
1. ABARE (1995) Quarterly Forest Product Statistics, March Quarter Australian Bureau of Agriculture and Resource Economics, Canberra.
2. ABS (1999a) Australian Bureau of Statistics Press Release September 7.
3. ABS (1999b) Australian Bureau of Statistics Press Release October 5.
4. Clark, J. (1995) Australia’s Plantations, Environment Victoria, Melbourne.
5. CSIRO (1996) State of the Environment Report, Department of Environment Sport and Territories Canberra.
6. Earthgarden (1999) Forest Friendly Building Timbers, Earthgarden Magazine, Trentham.
7. Graetz, R.D., Wilson, M.A. & Campbell, S.K. (1995) Landcover Disturbance Over the Australian Continent: a Contemporary Assessment. Biodiversity Series, Paper No. 7, Biodiversity Unit. Department of Environment Sport and Territories Canberra
8. Morgan (1996) Morgan Poll Finding No. 2879, The Bulleting, April 2.
9. Recher, H. (1999) The State of Australia' avifauna: a personal opinion and prediction for the new millennium, Australian Zoologist 31 (1) June.
10. VNPA (1999) Information Sheet 8: Steps in Conserving Box and Ironbark Forests and Woodlands Victorian National Parks Association, Melbourne.
11. Whitman, S. (1998) PhD study, University of Sydney, and Environment Survey 2000, Royal Australian Institute of Architects.
12. Willis, A.M. & Tonkin, C. (1999) Timber in Context, A guide to Sustainable Use. Natspec, Sydney.