From next year timber companies will only be allowed to export logs from their concessions, Agriculture Minister Robert Persaud revealed yesterday.
“If you don’t have a concession you won’t be given permission to export logs”, the minister declared at the press conference at the Ministry of Agriculture Boardroom yesterday. The minister also acknowledged that production in the forestry sector had been “a bit slow” in the first half of this year but stated that this is expected to pick up within the next few months.
Over the last few years, critics of the management of the forest industry have pointed out that Barama Company Limited in particular has been allowed to access and export logs from areas outside of its concessions. The government had not decisively responded to these charges at the time.
Meanwhile, the media was further briefed about the new log export policy, announced by President Bharrat Jagdeo on Tuesday. The president had announced that the export commission on popular log species is to be increased from January next year as government moves to dissuade the exportation of logs and to allow for more value-added activities in the country.
The current export commission of 2% will increase to 7% next year then to 10% in 2010 and 12% in 2011.
Popular log species such as Greenheart, Purpleheart, Red Cedar, Letterwood, Bulletwood, Cow Wood, Crab Wood, Locust, Tatabu, Kabukalli, Shibadan, Tauroniro, Washiba, Hububalli, Tonka Bean, Darina and Brown Silverballi will see the export commission going up to 12% in 2011.
Species such as Itikiboroballi, Determa, Wamara, Hakia, Mora, Dukali, Kereti Silverballi, Wallaba, Fukadi and Futui will see the export commission on them rising to 10% in 2011.
Squares of wood eight inches X eight inches and greater from the Purpleheart, Red Cedar, Letterwood, Crabwood, Locust, Kabukalli, Shibadan, Washiba, Hububalli and Tonka Bean species will see the export commission rising to 12% by 2011. Squares of wood from greenheart have not been included in this. Consideration will be given to companies exporting squares for engineering end uses. For this purpose, contracts must be submitted to the GFC and approved, before exportation of squares is allowed.
The export commission on 140 other species will remain at 2%.
It was noted that Guyana’s State Forest allocation percentages reveal that most of the easily accessible parts of the State Forest have already been allocated. Total log production from these areas increased from 288, 500 m3 in 2000 to 330,374 m3 in 2007. Log exports however, increased even more significantly from 44,300 m3 in 2000 to 190,800 m3 in 2006 then decreasing to 157,097 m3 in 2007.
Persaud noted that discussions had been held with the various stakeholders before the new policy was arrived at. He stated that in the course of the discussions some had opted for a total ban on log exports, some had advocated unrestricted exports while a third option was for the increase in export commission for the export of logs.
He said that the policy took the middle approach and this option would carry forward the local forestry sector. The minister noted that it had been recommended that for the development of the sector, there was need for more value added production and the need to reduce log exports to engage in this. He said that after consultations, the policy, aimed at dissuading the export of logs and encouraging added value manufacturing of forest products locally, was finalized.
Documentation provided by the ministry showed that for the period January to June 2008, total log production was 119,738 m3 and the export of logs was in the vicinity of 37,404 m3 or 31% of total production. The export of these logs accounted for export earnings of US$5,365,749.
Meantime, asked about the increased revenues accruing from the higher commissions, Persaud said that this would be used in the development of the industry. He said that after the commission increases are implemented, they would look at how log exports are responding before deciding on a review.
It was also stated that declared export prices will be verified against the Guyana Forestry Commission (GFC) average export price, guided by international market prices, to guard against under invoicing or transfer pricing. This had been another area of concern raised by critics.
Meanwhile, asked about the suspension of Toolsie Persaud Limited’s (TPL) Timber Sales Agreement, the minister said that it was left for President Jagdeo to make a decision on the issue. He declared that TPL was the only company reluctant to work with the GFC to remedy the situation. GFC Commissioner, James Singh was also present at the media conference yesterday.
